Doha:Seoul More than 90 percent of South Korean companies with operations in Vietnam have expressed their intent to maintain their presence in the country despite the challenges posed by increasing labor costs and regulatory burdens, as revealed by a recent survey.
According to Yonhap News Agency, the Korea International Trade Association (KITA) conducted the survey which found that 92 percent of South Korean companies in Vietnam have no plans to withdraw. A significant 87.5 percent of these companies cited the "cost advantage relative to other countries" as the primary reason for their decision to stay.
The survey results come in the context of a significant rise in wages in Vietnam over recent years. KITA noted that the monthly minimum wage in Vietnam has increased from US$45.4 in 2010 to $205.3 in 2024, representing an average annual increase of 11.4 percent over 14 years. This pace of wage growth is noted as the fastest among major Asian economies.
Despite these rising labor costs, the companies surveyed maintain a positive outlook on the Vietnamese market's future. Nearly 60 percent of the respondents expect their operations in Vietnam to improve over the next three to five years, while only 12.4 percent expressed a pessimistic view. Additionally, 72 percent of the companies view Vietnam as continuing to serve as a global business hub in the future.
KITA has advised these companies to reassess their cost structures and adapt their operations to align with the evolving business landscape in Vietnam.