Up to 38 per cent of Malaysian enterprises chose Viet Nam as their favoured expansion destination in Southeast Asia, the United Overseas Bank’s (UOB) Asian Enterprise Reports 2016 shows.
The report, released last Friday, states that 61 per cent of the surveyed Malaysian firms want to invest in Viet Nam’s manufacturing, 60 per cent are interested in healthcare and pharmaceuticals, and 38 per cent want to put money in the construction and real estate sector over the next three to five years.
The companies said the key factors influencing their choice of expansion destination were stable/improving political and economic climate (41 per cent); large and growing customer demand (40 per cent); favourable tax and regulatory environment (35 per cent); strong local business connections (32 per cent); and Government incentives (28 per cent).
Asian enterprises look to expand overseas in order to increase sales, raise competition in the domestic market, limit growth in the domestic market, diversify products and services and control costs.
Viet Nam is an attractive destination for investors because of its stable political environment, favourable economic conditions and attractive demographics, the report said.
Viet Nam is also forging ahead for international economic integration through participation in multilateral economic initiatives and free trade agreements, such as those with the European Union, Eurasian Economic Union and South Korea.
In 2016, the UOB conducted a survey of Asian enterprises in mainland China, Hong Kong, Indonesia, Malaysia, Singapore and Thailand to explore how they are capitalising on business opportunities based on global and regional economic trends and trade flows.
The research also examined the challenges Asian businesses are facing, their strategies and plans to fuel the next stage of growth, and their preferences and considerations when expanding regionally.
A total of 2,500 business leaders – key financial decision-makers of Asian enterprises – participated in the research. Businesses that were included in the survey had to be in operation for at least three years. — VNS