2024-04-09 05:23:25
[창간 104주년]
Median age is 32, young and low labor costs.
As the proportion of the middle class increases, spending power also increases.
Possibility of corporate tax increase for foreign companies
Vietnam, which promotes so-called ‘bamboo diplomacy’ that balances powerful countries like a bamboo with flexible branches on strong roots, is increasing its presence in the US-China conflict. Geographically, it is located in the center of Southeast Asia and has a long coastline, making it advantageous for imports and exports.
Vietnam has 16 free trade agreements (FTAs) with 52 countries around the world, including Korea. Vietnam’s number of FTAs is the second highest in the Association of Southeast Asian Nations (ASEAN) region, after Singapore. Vietnam’s top three trading partners are China, the United States, and South Korea, with more than half of Vietnam’s total trade coming from these countries. Last year, Korea exported $53.489 billion (about 72 trillion won) worth of trade with Vietnam, recording a trade surplus of $27.55 billion.
If you line up Vietnam’s 100 million people, the median age, which is the age in the middle, is 32 years old, which is relatively young. The proportion of the working age population (ages 15 to 64) also amounts to 70% of the total population. Although there has been a rapid trend of wage increase, with the minimum wage rising by an average of 7.4% per year over the past five years, the average monthly minimum wage for workers is 3.25 to 4.68 million dong (about 170,000 to 250,000 won), which is much lower than in Korea.
According to the United States Geological Survey (USGS), Vietnam is a powerhouse rich in resources such as rare earth elements and bauxite (2nd in the world), tungsten (3rd), tin (10th), and titanium (12th). Recently, the Vietnamese government changed its policy to encourage the participation of private and foreign investors instead of developing its own mineral resources. It is expected that resource development will begin in earnest in the future.
Its importance is also growing in the consumer market. As of 2022, the urbanization rate was 41.7%, entering the 40% range for the first time. This means that 4 out of 10 people live in cities. The proportion of the middle class (able to spend more than $11 per day based on consumer purchasing power parity) was less than 10% of the total population in 2000, but increased to 40% in 2022. It is expected to increase to 75% by 2030.
However, the decline in the youth population due to aging is a worrying factor. The Education and Culture Committee of the National Assembly of Vietnam predicted that the ‘population golden age’ (the period when the working-age population is more than 55% of the total population) will end in 2038 due to the aging population.
Vietnam’s corporate tax rate is 20%, but foreign companies investing in Vietnam have been subject to an average corporate tax rate of 12.3%. Some large projects provided benefits of less than 5%. However, if Vietnam introduces the global minimum tax (15%), which is being discussed internationally, the attractiveness of tax benefits will inevitably decline.
Hanoi = Reporter Hong Seok-ho [email protected]
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2024-04-09 05:23:25