Vietnam’s rapid economic growth, strategic location, and business-friendly reforms have made it an attractive destination for US firms looking to expand in Southeast Asia. As a member of multiple free trade agreements and a rising hub for global supply chains, Vietnam offers opportunities across sectors like manufacturing, technology, agriculture, and services. However, navigating the local regulatory framework and understanding cultural nuances are crucial for success.
Establishing a business in Vietnam requires a solid understanding of its legal system, investment policies, and market dynamics. From company registration to tax incentives, Vietnam’s evolving landscape provides both opportunities and challenges for US firms. Businesses must consider factors such as local partnerships, compliance requirements, and the advantages of key industrial zones to ensure a seamless entry into the market.
With this in mind, this guide provides US firms with a broad overview of the current state of trade and investment between Vietnam and the United States.
Vietnam trade with US in numbers
Vietnam and the United States have developed a robust trade relationship, with significant growth in both exports and imports over recent years.
Vietnam exports to the US, November 2024, US$billions
| November | October | MoM | YTD | |
| Total | 10.15 | 10.55 | -3.84% | 108.97 |
| Other | 1.18 | 1.28 | -8.28% | 13.39 |
| Machine, equipment, tools and instruments | 2.22 | 2.49 | -10.54% | 20.22 |
| Computers, electrical products, spare-parts and | 1.80 | 1.81 | -0.65% | 20.98 |
| Textiles and garments | 1.31 | 1.29 | 1.68% | 14.62 |
| Wood and wooden products | 0.83 | 0.85 | -2.64% | 8.17 |
| Footwear | 0.71 | 0.69 | 4.11% | 7.57 |
| Other products | 0.68 | 0.75 | -8.68% | 7.34 |
| Telephones, mobile phones and parts thereof | 0.64 | 0.70 | -7.68% | 9.35 |
| Plastic products | 0.31 | 0.29 | 5.27% | 2.74 |
| Other means of transportation, parts and | 0.30 | 0.27 | 12.34% | 2.97 |
| Handbags, purses, suit-cases, headgear and | 0.17 | 0.15 | 11.85% | 1.63 |
Source: Vietnam Exports Tracker
Vietnam imports from the US, November 2024, US$ billions
| November | October | MoM | YTD | |
| Total | 1.27 | 1.25 | 1.77% | 13.56 |
| Other | 0.25 | 0.30 | -14.96% | 3.33 |
| Computers, electrical products, spare-parts and | 0.36 | 0.41 | -14.19% | 4.03 |
| Other products | 0.12 | 0.14 | -13.74% | 1.38 |
| Machine, equipment, tools and instruments | 0.10 | 0.09 | 5.34% | 0.99 |
| Fruits and vegetables | 0.09 | 0.03 | 180.75% | 0.42 |
| Animal fodders and animal fodder materials | 0.08 | 0.04 | 98.60% | 0.89 |
| Soya beans | 0.07 | 0.03 | 165.20% | 0.37 |
| Plastics | 0.06 | 0.06 | 2.69% | 0.71 |
| Other means of transportation, parts and | 0.05 | 0.05 | 9.95% | 0.41 |
| Chemicals | 0.05 | 0.06 | -11.14% | 0.61 |
| Textile, leather and foot-wear materials and | 0.04 | 0.04 | 2.36% | 0.43 |
Source: Vietnam Imports Tracker
US foreign direct investment in Vietnam
In November 2024, the United States registered 9 new projects with US$35.9 million in newly registered capital, according to Vietnam’s Ministry of Planning and Investment. This represents an increase compared to October, which recorded 24 new projects and US$44 million in newly registered capital.
Year-to-date, the USA has invested in 106 new projects with US$259.6 million in newly registered capital, showing strong and sustained growth in foreign direct investment in Vietnam.
US trade bodies in Vietnam
There are a number of key US trade bodies in Vietnam that provide assistance and advice to US firms as well as advocate and work at a policy level with respect to developing the trade and investment relationship between Vietnam and the US.
The American Chamber of Commerce in Vietnam (AmCham Vietnam)
AmCham is a prominent U.S. trade body dedicated to promoting trade and investment between the United States and Vietnam. As one of the largest business organizations in the country, AmCham Vietnam serves as the voice of American businesses operating in Vietnam, offering a platform for networking, advocacy, and information exchange.
AmCham Vietnam is a member of the Asia-Pacific Council of American Chambers of Commerce (APCAC) and the U.S. Chamber of Commerce. Through these affiliations, it connects with a broader network representing thousands of businesses and executives across the Asia-Pacific region. This extensive network facilitates collaboration and supports the interests of U.S. companies in Vietnam and the wider region.
US-ASEAN Business Council
The US-ASEAN Business Council plays a significant role in Vietnam. This organization advocates for U.S. corporations operating within the Association of Southeast Asian Nations (ASEAN), promoting mutually beneficial trade and investment relationships between the United States and Southeast Asia.
US-Vietnam Trade Council
The US-Vietnam Trade Council is a cornerstone institution in strengthening economic and trade relations between the United States and Vietnam. Established in 1989, the council emerged as a vital player during the post-embargo period, contributing to the normalisation of diplomatic and economic ties between the two nations. Its efforts have significantly shaped the trajectory of bilateral trade, paving the way for Vietnam’s economic growth and integration into global markets.
The council’s primary mission is to facilitate and promote bilateral trade and investment between the United States and Vietnam. It advocates for policies that improve market access, foster transparency, and create a favourable business environment for US companies operating in Vietnam. Additionally, the council has been instrumental in supporting Vietnam’s integration into the global economic system, including its accession to the World Trade Organization (WTO) in 2007.
Vietnam trade agreements with US
Vietnam and the United States have established a range of trade agreements and frameworks to strengthen their economic and trade relations.
Vietnam-US bilateral trade agreement
The bilateral trade agreement between Vietnam and the United States, established in 2001, was a significant milestone in their economic relationship. It granted Vietnam normal trade relations status, reduced tariffs, and opened markets for goods and services, laying the groundwork for Vietnam’s global economic integration.
Vietnam’s accession to the World Trade Organization
Vietnam’s membership in the World Trade Organization, which was confirmed in 2007, further deepened its trade ties with the United States. This alignment with global trade rules provided better access for US companies to the Vietnamese market and ensured stronger legal protections.
Trade and investment framework agreement
The trade and investment framework agreement established in 2007 is a platform for dialogue on trade and investment issues. It allowed both nations to address challenges, resolve disputes, and explore opportunities to enhance economic cooperation.
Generalised system of preferences
Under the generalised system of preferences, certain Vietnamese products receive duty-free access to the United States. This has supported the growth of exports like textiles, footwear, and agricultural goods.
See also: List of Vietnam’s Free Trade Agreements
Business structures for US firms
US firms looking to establish operations in Vietnam have several business structure options to suit their needs. A representative office is a common choice for firms testing the market, focusing on market research or liaison activities without engaging in direct business operations. For firms ready to operate fully, a wholly foreign-owned enterprise (WFOE) is a popular option, allowing complete ownership and control.
Alternatively, businesses may choose a joint venture to partner with a local company, which can be advantageous for navigating regulatory requirements and cultural nuances. Branch offices are another option, allowing companies to conduct business activities such as trading or providing services. Each structure has unique benefits and regulatory considerations, making it essential for firms to carefully assess their goals and compliance requirements before proceeding.
For more information see: How to Set Up a Company in Vietnam: Technical Guide
US firms in Vietnam
There are a number well known US firms with operations or a significant presence in Vietnam already putting new US firms in good company. Some of the more well known firms include:
Intel
Semiconductor manufacturing facility in Ho Chi Minh City. Intel’s facility in Vietnam is its largest assembly and test site globally, playing a critical role in its supply chain. The company’s presence also supports the development of Vietnam’s tech industry and skilled workforce.
Apple
Supplier network and assembly operations in Vietnam. Apple works closely with Vietnamese manufacturers to assemble key products such as AirPods. Its investments are boosting Vietnam’s position as a major hub in the global supply chain.
Microsoft
Expanded operations supporting Vietnam’s growing tech sector. Microsoft collaborates with local businesses and governments to enhance digital transformation. Its cloud services and software solutions are widely used by Vietnamese enterprises.
Investments in Vietnam’s digital and IT ecosystem. Google provides training programmes to boost digital skills for Vietnamese entrepreneurs and students. The company also focuses on supporting Vietnam’s growing e-commerce and startup ecosystem.
See also: What to Watch Now Google Has An Office in Vietnam
Nike
Major footwear production through local manufacturers. Nike sources a significant portion of its products from Vietnamese factories, which are among the most advanced globally. The company’s operations contribute to job creation and economic growth in Vietnam.
See also: Where are Nikes Made in Vietnam 2024?
Adidas
Utilises Vietnam as a key hub for its footwear and apparel production. Adidas benefits from Vietnam’s skilled workforce and efficient production processes. The company’s partnerships with local suppliers ensure high-quality output.
See also: Where are Adidas made in Vietnam 2024?
Cargill
Operates in animal nutrition, grain trading, and feed production. Cargill’s operations in Vietnam include several factories and training centres for farmers. The company also invests heavily in community development and sustainability initiatives.
Citibank
Provides financial services to businesses and individuals. Citibank offers a wide range of corporate banking solutions tailored to Vietnam’s growing economy. It also plays a key role in facilitating trade finance and cross-border transactions.
Coca-Cola
Bottling plants and extensive market presence. Coca-Cola’s operations include multiple production facilities and a strong distribution network. The company supports local communities through programmes in education and clean water.
Chevron
Operations in the energy and petroleum sector. Chevron is involved in oil and gas exploration projects in Vietnam. The company also contributes to local energy infrastructure development.
US firms that have exited Vietnam
There are a number well known US firms that have entered the Vietnam market but left not long after for a variety of reasons. Some of these include:
Uber
Uber exited Vietnam in 2018 when it sold its Southeast Asia operations, including its Vietnam division, to Grab. The decision was part of a regional strategy to consolidate losses in a highly competitive ride-hailing market.
Chevron
Chevron withdrew from its gas exploration projects in Vietnam in 2015, selling its stakes to a subsidiary of PetroVietnam. This exit was attributed to Chevron and the Government of Vietnam being unable to come to an agreement on a gas price.
See also: Mining in Vietnam: Industry Overview
ConocoPhillips
US energy giant ConocoPhillips exited Vietnam in 2012, selling its assets to Perenco. The decision was part of a broader strategy to focus on core markets and optimise its global portfolio.
Metro Cash & Carry
Metro Cash & Carry, previously part of a US-based retail group, sold its Vietnam operations to Thailand’s TCC Group in 2014. This marked an exit from Vietnam’s cash-and-carry retail market.
See also: Retail Industry in Vietnam
Tax for US firms in Vietnam
Vietnam and the United States have not signed a comprehensive bilateral tax treaty to avoid double taxation. However, the two countries engage in tax cooperation under other frameworks and agreements that indirectly affect their economic relationship.
Taxation of US businesses in Vietnam
US businesses operating in Vietnam are subject to Vietnam’s local tax regulations, including corporate income tax, value-added tax (VAT), and personal income tax for employees. The lack of a bilateral tax treaty means that these firms may face double taxation, although Vietnam offers foreign tax credits for taxes paid in the US on Vietnamese income.
Transfer pricing
Vietnam enforces transfer pricing regulations to prevent tax evasion through intercompany transactions. US companies operating in Vietnam must comply with these rules by maintaining detailed documentation and filing transfer pricing reports.
Double taxation
While there is no direct treaty, both nations follow the principles of the Foreign Tax Credit mechanism. This allows businesses and individuals to offset taxes paid in one country against tax liabilities in the other, reducing the double taxation burden to some extent.
Trade and Investment Framework Agreement (TIFA)
The TIFA serves as a platform for addressing tax and trade-related issues between Vietnam and the US. While it is not a tax treaty, the agreement fosters dialogue on tax concerns affecting businesses in both countries.
Potential future tax agreements
Given the growing trade and investment ties between Vietnam and the United States, there is ongoing discussion about negotiating a formal double taxation agreement (DTA). Such an agreement would reduce tax barriers for businesses, enhance cross-border investments, and improve economic collaboration.
What’s next?
Vietnam is an attractive destination for US firms due to its rapid economic growth, strategic location, and business-friendly reforms. The country’s membership in multiple free trade agreements and its role in global supply chains offer opportunities across sectors like manufacturing, technology, agriculture, and services. However, successfully entering the Vietnamese market requires understanding local regulations, investment policies, and cultural nuances.
US businesses have several options for structuring their operations in Vietnam, such as representative offices, wholly foreign-owned enterprises (WFOEs), joint ventures, and branch offices. Each structure has unique advantages and regulatory considerations, depending on the firm’s goals and market strategy. Additionally, navigating Vietnam’s tax framework, compliance requirements, and industrial zones is essential for a smooth market entry.
That said, Vietnam is an emerging economy that is incredibly dynamic. With this in mind, US firms looking to do business in Vietnam should make sure to keep up with the latest developments by subscribing to the-shiv.