Some advantages of logistics investment

The role of logistics is to get goods where they are needed to meet consumer demand. This requires a complex series of supply chain management processes that must be coordinated to ensure efficiency and timely delivery. In today’s business, logistics is more important than ever. Investing in logistics can be an option for many investors. Vietnam is ranked 11/50 global emerging logistics markets thanks to the transformation of businesses providing and using this service.

The following article of Siglaw will give the advantages of investing in logistics, and advantages when investing in logistics in Vietnam:

Advantages of logistics investment today

The demand for logistics services is growing rapidly

The global logistics industry is worth $4 trillion and is expected to grow to $15 trillion by 2050. This growth is driven by the growth of e-commerce and the increasing globalization of trade. Investing in logistics has been a trend today. Logistics companies can offer investors a high return on investment and a steady source of income.

Logistics companies are generally very profitable

One of the main reasons is that they provide essential services to businesses and consumers. Without logistics companies, businesses will find it difficult to get their products to market and it will be difficult for consumers to get the items they need.

Another reason why logistics companies are highly profitable is that they often have exclusive contracts with large corporations. This gives them a steady source of business and helps protect them from competition.

Finally, logistics companies tend to be based in areas with a lot of infrastructure. This makes it easier for them to set up shop and get started quickly. All of these factors combine to make investing in logistics a great financial move.

Logistics is a relatively low-risk investment

There are a number of reasons why logistics is a relatively low-risk investment.

First, the industry is generally resilient to economic downturns. Companies still need to ship goods even when economic conditions are difficult.

Second, there is always a need for logistics services. Even as e-commerce grows, businesses still rely on brick-and-mortar stores and need to get their products to those locations.

Third, the barrier to entry in the logistics industry is relatively low. Anyone with a truck and some basic equipment can start a logistics business. And finally, profit margins in the logistics industry are usually very good. Since logistics companies usually have fixed costs, they can make a lot of money when business booms and remain profitable when business slows down.

Investing in logistics can offer significant tax advantages

Investing in logistics can offer a number of tax advantages, depending on the jurisdiction where the investment is made. For example, many jurisdictions offer incentives for investments in infrastructure projects such as toll roads, bridges, and airports. In addition, many governments offer tax incentives for investing in businesses that provide job opportunities in disadvantaged areas.

Investing in logistics can help diversify portfolios

Most portfolios focus primarily on stocks and stocks, which can be volatile and prone to unexpected shocks. In contrast, investments in logistics tend to be more stable and yield more stable returns. This makes them an ideal way to balance portfolios and reduce overall risk.

Investing in logistics also offers strong growth potential. The global logistics services market is expected to reach $15.5 trillion by 2023. This represents an annual growth rate of 7.4%, which is much higher than the average of other sectors.

Advantages of logistics investment in Vietnam

• In Vietnam, the system of road transport infrastructure, airports, seaports, warehouses, commercial infrastructure, and logistics centers is constantly expanding on a large scale and widely spread. Along with that, the accompanying services have been timely meeting the very diverse requirements of the market. Customs clearance procedures and time for exports have also been significantly improved. This helps attract foreign investors to invest more in the sector.
• In addition, the work of completing legal regulations on logistics has been concerned by the Government of Vietnam recently. The reality of Vietnam’s deepening international economic integration, especially the implementation of new-generation Free Trade Agreements (FTAs), requires appropriate regulations, creating favorable and open conditions for the logistics service industry to develop, promoting domestic investment and international cooperation.
• Specifically, Decision No. 200/QD-TTg dated February 14, 2017 was born, the Government has approved the Action Plan to improve competitiveness and develop Vietnam’s logistics service industry until 2025, in which, setting out 06 goals, 60 specific tasks with many comprehensive solutions, in order to help this industry overcome difficulties and challenges, reach the advanced level of the region and the world, and meet the economic development requirements of the country.

Solutions to develop the logistics service industry in Vietnam

In the coming time, in order to promote the development of the logistics service industry, Vietnam needs to focus on implementing some of the following solutions:

Continue to improve policies and laws on logistics services: amend a number of regulations and supplements on logistics services in the Commercial Law, creating a favorable legal basis for logistics activities; amend and promulgate new policies and laws governing logistics services, multimodal transport and cross-border transport.

Promulgate support policies to promote the development of the logistics service industry: develop policies to support the development of logistics services in the locality effectively, suitable to the socio-economic characteristics of each locality. Support logistics service enterprises to access domestic and foreign capital, develop markets, train and access information.

Prioritize budget allocation to support research, application and technology transfer for logistics service development, contributing to improving the capacity and competitiveness of logistics service providers. Building strong corporations in logistics, promoting overseas investment and exporting logistics services, creating orientation and driving force for market development.

Complete the logistics infrastructure, ensure the synchronization of transport infrastructure and transport services with the goal of developing the logistics service industry; Reviewing and adjusting the master plan and linking the planning on logistics centers, dry ports and bonded warehouses in a unified whole.

Development of the logistics services market. Hosting and organizing international seminars, fairs and exhibitions on logistics; Learn foreign experiences to exchange investment opportunities, cooperate in developing logistics services;

Focus on improving logistics infrastructure associated with e-commerce, Focus on training human resources for both businesses and management agencies to serve the rapid development of logistics services.

Promote international cooperation in the field of logistics. Continue to expand logistics infrastructure connectivity with countries in ASEAN, Northeast Asia and other regions of the world to promote the effects of multimodal transport, cross-border transport and transit; Construction of transport works, warehouses, logistics centers on roads and corridors connecting Vietnam’s ports with Laos, Cambodia, Thailand and South China.

For a comprehensive free consultation when establishing a 100% foreign-owned logistics company in Vietnam, please contact Siglaw Law Firm

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