Vietnam has undergone a substantial change in its economic structure in the last decade, shifting from agriculture to the industry and services sector. Since 2006, the service sector has had the highest share in the GDP distribution, followed by industry and construction, and agriculture.
The supporting industries focus on the supply of raw materials, spare parts, and components to manufacturing industries, thus becoming a substantial determinant of the industrialization process of Vietnam. With the potential of becoming "the next Asian manufacturing hub", driven by an abundant labour force and low labour cost, the FDI capital inflow into Vietnam in 2021 reached US$31.15 billion, with 58.2% going towards the manufacturing and processing sector.
However, to maintain the FDI interest in middle and long-term local investments, it is crucial to develop a sustainable supporting industry system by increasing the localization rate and maintaining a stable supply of raw materials, components, and spare parts for the industrial sectors. High dependence on imports for the supporting industries, will lead to higher risks and increase the costs for enterprises.
Join us on another episode of our Sector-focused Webinar Series: Vietnam Supporting Industry to have an overview of the supporting industry in Vietnam and what to expect from changes in regulations and tax incentives for companies within the industry itself.