8 Reasons to invest

There are many great reasons to invest in the Mekong Delta. Below are eight of the region’s most compelling advantages.

  • 1 Strong Economic Growth

    Foreign direct investment (FDI) is increasing at more than double Vietnam’s national average, and flowing towards a more diverse range of projects than ever before. Economic growth and activity is increasing across all sectors, presenting opportunities across the entire business spectrum.

  • 2 Excellent Investment Climate

    Three of the Mekong Delta provinces have managed a top-ten ranking in investment climate among the 63 Vietnamese provinces, according to the Vietnam Provincial Competitiveness Index (PCI). Nearly all Mekong Delta provinces rank above the national average, and more than 50 industrial parks offer highly competitive prices.

  • 3 Direct Transport Links and Excellent Infrastructure

    Due to substantial investments in transport infrastructure, access to the Mekong Delta has improved significantly. The average travel time between HCMC and Can Tho has declined from more than six hours in 2010 to less than three hours in 2015. Meanwhile communications and energy infrastructure are improving rapidly. With 50 existing industrial parks and about 45 in the pipeline, the options for investment are expanding. Prices are sometimes as low as 1 USD per m2 per year.

  • 4 17 Million Consumers

    With over 17 million people, the Mekong Delta has a bigger population than the Netherlands or neighboring countries like Cambodia or Laos. This large consumer base is gaining purchasing power. Between 2002 and 2012, per capita income in the Mekong Delta provinces increased nearly five times, especially in the growing urban centers.

  • 5 Strong Workforce and High Social Standards

    While labor costs in the Mekong Delta are competitive compared to the rest of the country, strong social standards such as minimum wages, labor protection and labor rights ensure a solid and reliable framework for international businesses.

  • 6 A Booming Agriculture and Aquaculture Industry

    With highly fertile land and good access to water for irrigation, the Mekong Delta is a highly productive agriculture zone. Progressing professionalization of the industry as well as advancing agro-processing are providing ample opportunities for investors. Meanwhile, the aquaculture industry has risen by around 500 % in the past ten years. Both industries are now moving from quantity to quality, which significantly increases the demand for better-quality input materials, including agricultural equipment, seeds, fertilizers and pesticides.

  • 7 Climate Change as a Business Opportunity

    The Mekong Delta is one of the regions worldwide most affected by climate change. This is why in the coming years, billions of USD will be invested in resilient infrastructure such as roads, bridges, water and energy facilities, embankments and dykes.

  • 8 Ample Runway for Further Progress

    Despite all these advantages, the Mekong Delta remains an underrated destination. Although FDI is growing by nearly 20 % per annum, the Mekong Delta still attracts less FDI than many other regions in Vietnam. The results are highly competitive conditions for those who decide on the Mekong Delta as an investment destination.

Key Challenges

Despite offering many great investment opportunities, the Mekong Delta presents five major challenges that investors must heed.

  • 1 Limited Options for Heavy Industry

    Much of the Delta is alluvial land with sandy soil that is unsuitable for heavy industries, so many areas can only handle light manufacturing. Climate-related risks may exacerbate this challenge.

  • 2 Remaining Infrastructure Challenges

    While many parts of the Mekong Delta are now well connected to HCMC and other regions in Asia and worldwide, some remote areas of the Delta still lack strong transport links. The port system in the Mekong Delta remains weak, in particular for container handling and for large vessels. Yet massive infrastructure programs are underway and improving the situation rapidly.

  • 3 Skilled Labor Shortages

    Well-trained technicians and managers are hard to find in the Mekong Delta, though reforms and public investment in education have more than doubled the percentage of trained workers in the Delta provinces in the past 10 years. In the provinces near HCMC, firms can attract experts from HCMC as they do in the provinces north of the city.

  • 4 Environmental and Climate Risks

    With an average elevation of just about 1 m above sea level, the Mekong Delta is susceptible to rising sea levels and other risks from climate change. Some parts are more at risk than others, so it is critical that investment locations are chosen wisely.

  • 5 Weak Supporting Services

    Since the Mekong Delta is just beginning to urbanize and industrialize, there are few local suppliers and service providers for most industries other than agriculture and aquaculture.

“The Mekong Delta has made great strides towards becoming a core area in Vietnam for industrial manufacturing and labor-intensive industries. The supportive approach of local government and good investment climate, as well as the motivated and cheap labor force, make it a very attractive location for foreign investment.”

Christian Schaefer, international lawyer and Managing Partner of Asia Counsel Vietnam