Introduction: Vietnam — Southeast Asia’s Economic Powerhouse in the Making
In the last two decades, Vietnam has transformed from a developing economy into one of the most dynamic markets in Southeast Asia. With a population of over 100 million, a young, educated workforce, and sustained GDP growth averaging 6–7% annually, Vietnam has emerged as a magnet for global investors and businesses seeking expansion in Asia.
For Singaporean companies, Vietnam represents a logical and strategic next step. The two nations share strong diplomatic relations, robust trade ties, and mutual participation in ASEAN. More importantly, Singapore’s strengths in innovation, finance, governance, and technology complement Vietnam’s cost competitiveness, growing consumer base, and hunger for modernisation.
As Singapore’s domestic market reaches maturity, expanding into Vietnam is not merely an option—it’s a forward-thinking move toward regional leadership and sustainable growth.
1. A Strong Bilateral Relationship and Investment Track Record
Singapore and Vietnam enjoy one of the most successful economic partnerships in the ASEAN region. Since the establishment of diplomatic ties in 1973, both countries have worked hand-in-hand to promote trade and investment.
Singapore consistently ranks among Vietnam’s top foreign investors, with total registered investment exceeding US$70 billion as of 2024. The success of the Vietnam-Singapore Industrial Parks (VSIPs)—a joint initiative launched in 1996—demonstrates the deep collaboration between both nations. There are now 14 VSIPs across the country, hosting hundreds of multinational and Singaporean companies involved in manufacturing, logistics, and services.
These industrial parks have become symbols of trust and partnership, showing how Singaporean businesses can thrive in Vietnam through structured, government-supported cooperation.
2. Vietnam’s Booming Economy and Demographic Advantage
Vietnam’s economy continues to grow at one of the fastest rates in Asia, driven by strong exports, a young labour force, and increasing foreign direct investment (FDI). Its population offers a demographic sweet spot—more than 60% are under the age of 35, and literacy rates exceed 95%.
This youthful population translates into:
- A vibrant consumer market with increasing spending power
- A skilled and adaptable workforce ready for upskilling
- A thriving digital economy driven by mobile and internet adoption
For Singaporean companies, these factors create opportunities across sectors such as technology, education, finance, healthcare, retail, and logistics. As Vietnam’s middle class grows, so does demand for high-quality products and services—an area where Singapore excels.
3. Strategic Location and Growing Infrastructure
Vietnam’s geography makes it a strategic hub in Southeast Asia. Stretching along the South China Sea, it offers easy access to key regional markets including China, Thailand, Malaysia, and Indonesia. Its major cities—Hanoi, Ho Chi Minh City, and Da Nang—serve as thriving commercial centres with world-class ports and airports.
Vietnam’s government is also heavily investing in infrastructure development. Massive projects in highways, logistics, ports, and industrial zones are enhancing connectivity and reducing business costs.
Singaporean companies involved in infrastructure, construction, or logistics can capitalise on this wave of development by offering expertise in smart city design, green construction, and efficient transport solutions.
4. Political Stability and Pro-Business Policies
Vietnam’s one-party political system provides stability and consistent long-term economic planning—an important consideration for foreign investors. Over the years, the government has implemented numerous reforms to attract and retain foreign investment, such as:
- Simplifying business registration processes
- Offering tax incentives for foreign-owned enterprises
- Strengthening intellectual property (IP) protection laws
- Streamlining import-export procedures
These pro-business policies, coupled with Vietnam’s openness to international trade, make it easier for Singaporean companies to operate and invest with confidence.
5. Competitive Costs and Rising Productivity
One of Vietnam’s biggest advantages is its cost-competitive environment. Labour, rental, and operating expenses are significantly lower than in Singapore—often by as much as 50–70%. This allows Singaporean companies to:
- Lower production costs while maintaining product quality
- Expand faster with smaller capital requirements
- Build efficient regional supply chains
In addition, Vietnam’s workforce is becoming increasingly skilled thanks to government-driven education initiatives and partnerships with international training institutions. Many local workers are fluent in English and familiar with international business practices, which reduces communication barriers.
For Singapore manufacturers and service providers facing rising domestic costs, Vietnam provides the perfect balance between cost efficiency and productivity.
6. A Rising Digital and E-Commerce Market
Vietnam’s digital economy has exploded in recent years. With over 80 million internet users and high smartphone penetration, it is one of the largest online markets in Southeast Asia.
E-commerce platforms like Shopee, Lazada, and Tiki dominate the market, while digital payment solutions and fintech services are gaining traction rapidly. Singaporean companies with expertise in technology, cybersecurity, e-commerce, or fintech can bring proven solutions to help Vietnam’s businesses scale and digitise.
Moreover, the Vietnamese government’s National Digital Transformation Programme (2021–2030) aims to make the country a digital-driven economy by 2030, creating opportunities for Singapore firms specialising in digital infrastructure, data analytics, and software development.
7. Key Sectors with High Potential for Singaporean Firms
(a) Manufacturing and Industrial Services
Singapore firms can collaborate with Vietnamese partners in high-value manufacturing, precision engineering, or automation. With Vietnam’s growing role in global supply chains, many companies are relocating production from China to Vietnam—a trend known as the China+1 strategy. Singaporean expertise in quality control, logistics, and sustainability can add tremendous value.
(b) Education and Training
Vietnam’s population places great emphasis on education and language proficiency. Singaporean institutions and training centres can establish franchised schools, online learning platforms, or skills-based training centres catering to Vietnam’s growing middle class.
(c) F&B and Lifestyle Brands
Vietnamese consumers are increasingly drawn to international brands. Singaporean F&B chains and lifestyle retailers such as BreadTalk and Ya Kun Kaya Toast have successfully entered the market by adapting to local preferences.
(d) Financial and Professional Services
With Vietnam’s growing corporate landscape, there is increasing demand for accounting, auditing, HR, and legal services. Singapore’s reputation for governance and transparency gives its service providers a strong edge.
(e) Renewable Energy and Sustainability
As Vietnam commits to reducing carbon emissions, opportunities abound for Singaporean firms in solar, wind, and waste-to-energy solutions. Singapore’s leadership in green technologies can help Vietnam achieve its sustainability goals.
8. Overcoming Challenges in the Vietnamese Market
Despite its opportunities, Vietnam also presents challenges that Singaporean companies must prepare for:
- Complex bureaucracy: Administrative procedures can be time-consuming, though reforms are improving efficiency.
- Regulatory diversity: Laws may differ by region, and foreign companies must stay updated on compliance changes.
- Cultural nuances: Building trust with local partners is essential; business relationships often develop over time.
- Competition: Global players are eyeing Vietnam, especially in fast-growing sectors like retail and tech.
To mitigate these challenges, companies should:
- Conduct thorough market research
- Partner with local consultants or distributors
- Seek support from Enterprise Singapore (ESG) or the Singapore Business Federation (SBF)
- Use available funding schemes such as the Market Readiness Assistance (MRA) Grant
9. Leveraging the MRA Grant for Vietnam Expansion
The MRA Grant by Enterprise Singapore is designed to help SMEs expand overseas. It covers up to 50% of eligible costs, capped at S$100,000 per new market.
For Vietnam, the grant can fund:
- Market research and feasibility studies
- Branding and marketing activities in Vietnamese markets
- Overseas business development such as partner search and trade missions
- Legal and incorporation services for establishing a local presence
Using the MRA Grant reduces financial risk and allows Singapore businesses to take calculated steps in market entry. Partnering with professional advisors—such as GrantConsultant.sg—can further simplify the application and execution process.
10. Success Stories of Singapore Businesses in Vietnam
CapitaLand Development
CapitaLand has been operating in Vietnam for more than 25 years, developing residential and commercial projects. The company’s success highlights how long-term commitment and local partnerships lead to sustainable growth.
Mapletree Investments
Another Singapore success story, Mapletree manages several logistics and office developments across Vietnam, capitalising on the country’s expanding e-commerce and warehousing needs.
Ya Kun Kaya Toast
By localising its offerings and pricing, this iconic Singaporean F&B brand has found a loyal following in Vietnam’s urban centres.
These examples show that when companies combine Singapore’s professionalism with Vietnam’s growth potential, they can achieve impressive results.
11. Steps for Singaporean Companies to Enter the Vietnam Market
- Conduct Market Research – Identify target cities, demand trends, and competitor positioning.
- Develop a Market Entry Strategy – Choose the right business model (joint venture, distributor, or wholly-owned subsidiary).
- Localise Offerings – Adapt products and pricing to local tastes and income levels.
- Leverage Government Grants – Tap into schemes like MRA for funding and ESG for advisory support.
- Establish Strong Local Partnerships – Engage trusted Vietnamese partners for logistics, compliance, and customer acquisition.
- Build Brand Awareness – Invest in digital and offline marketing tailored to Vietnam’s culture.
Taking a structured and well-researched approach ensures smoother entry and sustainable long-term success.
12. The ASEAN Advantage
Vietnam’s membership in ASEAN makes it an especially strategic choice for Singaporean companies. The ASEAN Economic Community (AEC) promotes free trade, investment, and movement of goods and services within the region.
This integration gives Singapore firms entering Vietnam access not only to Vietnam’s domestic market but also to a larger regional network of 680 million consumers. Once established in Vietnam, companies can easily expand further into Cambodia, Laos, or Myanmar.
Conclusion: A Future-Ready Partnership
Vietnam’s rise is one of Southeast Asia’s most remarkable success stories—and Singaporean companies are perfectly positioned to be part of it. The two nations share a foundation of trust, complementary strengths, and an ambitious vision for regional growth.
By combining Singapore’s innovation, governance, and financial stability with Vietnam’s dynamism, scale, and energy, businesses can create a powerful synergy that drives long-term success.
Whether through manufacturing partnerships, digital ventures, education collaborations, or green energy projects, Vietnam offers fertile ground for growth. For Singaporean SMEs, the time to explore Vietnam is now—before the market becomes too crowded.
With strategic planning, local partnerships, and the right government support—such as the MRA Grant—Singapore businesses can transform opportunity into sustainable success in Vietnam.
Find out more at https://grantconsultant.sg/market-readiness-assistance-mra-grant-singapore/