Illustrative photo. (Photo: VOV)

The surge in multinational corporations’ (MNC) interest in Vietnam stems from a variety of factors, including competitive costs and FDI-friendly policies, the report said.

Vietnam has also made significant progress in setting up economic agreements with major trading partners, such as the EU-Vietnam FTA (EUVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In turn, these developments have facilitated and enabled foreign investment.

Vietnam’s favourable investment environment can be attributed to the government’s active support through its tax system, which, with a statutory corporate income tax rate of 20%, places the country in a more competitive position than many others.

Some enterprises can take advantage of extended tax exemptions and reductions to further lower the effective tax rate, HSBC Global Research Department said.