Doing Business in India VS Vietnam: Which One Is the Best for You?

India vs Vietnam- which country would you choose if you want to make an investment?

Since we’re talking about money the moment we invest, it’s just wise to gather information first before coming up with a decision. We can use our assumption at the initial stage but we still have to know the facts when finalizing our business decisions. The money on investment could go right or wrong, depending on where and when we invest it.

Let’s examine the two countries fighting for business investors, India VS Vietnam, and let’s find out which one is the best.

 

India Has the Following Economic Profile

Country Description

India is considered as one of those old countries in the world. It’s the birthplace of the 4 major religions namely Hinduism, Buddhism, Jainism, and Sikhism. Because of this, India has a rich culture and philosophies.

There are certain countries near India and they share a border with them. These include Pakistan, China, Nepal, Bhutan, Bangladesh, and Myanmar. Being the second-most populous country in the World, registering at 1.3 Billion, it could surpass China and become number one within the next 10 years.

Interest Rate on Business Loans

One of the good things that India Offers to businesspersons is its competitive interest rate for business loans that would range from 11-20% and a processing fee ranging from 1-3% of the loan amount. Business loans are important to startups especially when they are just about building up the office, furniture and fixtures, and other assets of the company. Fortunately in India, these services are available and accessible.

Area of Investment

The big population in India provides them with certain advantages like focusing on providing services. Certain businesses like IT, Business Outsourcing Services, and Software Development are just some of the fields where India serves best.

Aside from those things mentioned above, India is known also for agriculture and fishing. It will be advantageous for businesspersons if they capitalise on these.

Last but not least, India is also looking for investments on fast-moving consumer goods, housing finance, automobile, infrastructure, and pharmaceutical stocks.

Incentives and Attractions of India to Foreign Investors

There are several reasons why you should invest in India. The following are some of them:

• Labor Cost – The monthly minimum wage for an 8-hour work in India is 5280 INR or almost 70 USD while the labour cost in Vietnam is 3,500,000 VND, amounting to 148 USD when converted. The labour cost in India is still low compared to Vietnam.
• Large Market – India has a huge population of 1.3 billion while Vietnam has almost only 98 million. A lot of products and services can be created and sold in India with different prices, sizes, and colours to serve the different preferences of the customers.
• Buying Power – There is power in numbers. India has a lot of workers who generate income. When people have more money, economic activities are good as people need to buy basic commodities and some other things in order to survive.
• Special Economic Zones (SEZ) – Foreign companies who invest and operate in Special Economic Zones in India enjoy certain tax exemptions for the next 10 years.

 

Vietnam Has the Following Economic Profile

Country Description

Vietnam is a country in Southeast Asia. Its neighbouring countries include China, Laos, and Cambodia. The country is densely-populated and is currently gaining popularity as a tourist destination in the region. In 2007, Vietnam joined the World Trade Organization modifying its centrally-planned economy to a more open economy.

Economic Strategies

The economic strategy that the government of Vietnam employed was primarily a mixed economy. The government has high control on the basic commodities, prices, and movement of goods but it also allows the participation of limited private companies. Although the country has already joined some economic unions like Asia-Pacific Economic Cooperation (APEC), the Association of Southeast Asian Nations (ASEAN), and the Trans-Pacific Partnership (TPP), the economy is still not liberal.

Area of Investment

No matter how the Vietnamese government controls its economy, it will still need products and services that the country can’t provide for itself. The country needs investments, particularly in construction and building.

As the economy of Vietnam progresses, good roads must be provided for the movement of products and services. Aside from this, infractructions like business buildings, internet, and telecommunications must be provided and upgraded as well.

Last but not least, Vietnam is also calling for investors who can provide different products and services such as beauty and cosmetics, real estate, agriculture, and car business.

Incentives and Attractions of Vietnam to Foreign Investors

There are several reasons why you should invest in Vietnam. The following are some of them:

• Steady and stable growth – The economic review for Vietnam has a positive outlook. Last 2017, the country’s GDP registered at 6.3% With the growing economy of Vietnam, some related businesses are expected to flourish like those related to providing infrastructures, real estate, and car business and accessories.
• Socio-Political Stability – The socio-political aspect of Vietnam is good, with not too many anti-government protesters.
• Composition of young workers – Just like any other countries that have a good profile of workers, Vietnam has skilled and young workers that are productive at their age.
• A government willing to liberalise the economy – Although the economy of Vietnam is more controlled by the government, lawmakers in the country recognise that some changes must be done eventually if they want to be globally competitive. They are aware of this and are willing to change.

 

The Call to Make a Decision Is Up to You

Who is the winner between India VS Vietnam? Well, it depends on the current situation of the investor. The market in India is big. It’s considered a Super Economy. It also offers the best option for your business like cheap labour, good support from the government, good infrastructure, and a competitive business loan interest for those who need it. However, Vietnam is not yet saturated and you are not limited as to what type of business to open.

In the economic battle between India VS Vietnam, are you having difficulty to choose who is the winner for you? We at 3E Accounting would like to help. We’re among those known Company setup specialists on the planet and we will assist you in aspects where you’re having difficult decisions.