92% of South Korean Firms in Vietnam Wish to Stay Despite Rising Labor Costs

A survey conducted by the Korea International Trade Association (KITA) revealed that 92% of South Korean firms operating in Vietnam intend to continue their presence in the country, despite rising labor costs and regulatory challenges.

The survey indicates that a significant majority of these companies, approximately 87.5%, cite the cost advantages of operating in Vietnam compared to other countries as a primary reason for their decision to stay. This sentiment persists even as the monthly minimum wage for Vietnamese workers has surged from $45.4 in 2010 to $205.3 in 2024, marking a 4.5-fold increase.

Additionally, the average annual wage increase of 11.4% over the past 14 years positions Vietnam as one of the fastest-growing economies in Asia regarding labor costs. Despite these challenges, nearly 60% of the surveyed companies expressed optimism about their operations in Vietnam over the next three to five years.

KITA has advised these firms to reassess their cost structures and adapt their operations to align with the evolving business landscape in Vietnam, which is expected to maintain its role as a global business hub in the future.