92% of South Korean firms in Vietnam plan to stay despite rising labour costs
Synopsis
Despite Vietnam's minimum wage rising more than 4.5 times since 2010 — the fastest pace among major Asian economies — 92% of South Korean companies there are staying put. Cost advantage still wins, and 60% expect their Vietnamese operations to improve over the next three to five years, cementing Vietnam's status as a preferred manufacturing hub for Korean capital.
Key Takeaways
92 percent of South Korean companies in Vietnam have no plans to exit, per a KITA survey released on 8 November 2026 .
87.5 percent cited 'cost advantage relative to other countries' as the main reason for staying.
Vietnam's monthly minimum wage surged from $45.4 in 2010 to $205.3 in 2024 — a rise of more than 4.5 times at an annual average of 11.4 percent .
Nearly 60 percent of respondents expect their Vietnam operations to improve over the next three to five years , against only 12.4 percent with a pessimistic view.
72 percent believe Vietnam will continue to serve as a global business hub .
KITA advised firms to review cost structures and adapt to Vietnam's changing regulatory environment.
More than 9 out of 10 South Korean companies operating in Vietnam intend to maintain their presence in the country despite mounting labour costs and regulatory pressures, according to a survey released on Sunday, 8 November 2026. The findings, from the Korea International Trade Association (KITA), underscore Vietnam's enduring appeal as a manufacturing and investment destination for Korean businesses.
Key Survey Findings
The KITA survey found that 92 percent of South Korean companies in Vietnam have no plans to withdraw from the Southeast Asian nation. Among those choosing to stay, 87.5 percent cited 'cost advantage relative to other countries' as the primary reason — a notable finding given that Vietnamese wages have risen sharply over the past decade and a half.
Looking ahead, nearly 60 percent of respondents expected their Vietnamese operations to improve over the next three to five years, far ahead of the 12.4 percent who held a pessimistic outlook. Additionally, 72 percent assessed Vietnam as continuing to function as a global business hub in the future.
Vietnam's Rising Wage Trajectory
The survey results arrive against the backdrop of a dramatic wage increase in Vietnam. The monthly minimum wage for Vietnamese workers surged more than 4.5 times — from $45.4 in 2010 to $205.3 in 2024, according to KITA data. Over the 14-year period, monthly wages rose at an annual average rate of 11.4 percent, reportedly the fastest pace of increase among major economies in Asia.
This comes amid a broader global trend of manufacturers diversifying supply chains away from China, with Vietnam emerging as a preferred alternative. South Korean conglomerates in electronics and consumer goods have been among the most active investors in the country, making Korean firms a bellwether for Vietnam's overall investment climate.
KITA's Recommendations
Despite the largely optimistic outlook, KITA advised South Korean companies operating in Vietnam to review their cost structures and adapt their operations in line with the country's evolving business environment. The association flagged that regulatory compliance burdens have grown alongside wage pressures, and firms must proactively adjust to remain competitive.
What's Next for Korean Investment in Vietnam
The survey signals that South Korean capital is unlikely to pivot away from Vietnam in the near term, even as labour arbitrage gradually narrows. The question for businesses will be whether productivity gains and market-access advantages can continue to outweigh the rising cost base. Vietnam's government has also been active in offering incentives to retain major foreign investors, adding another layer of stability to the equation.
Point of View
India, or Indonesia in the manufacturing segments Korean firms occupy. The more telling data point is the wage growth rate: 11.4 percent annually over 14 years is unsustainable as a cost-advantage story forever. Korean firms appear to be buying time, betting on Vietnam's market-access advantages and infrastructure investments rather than pure labour arbitrage. The real test will come in the next five years as wages continue to converge with regional peers — and whether Vietnam's regulatory environment matures fast enough to retain these investors on fundamentals rather than cost alone.
NationPress
8 Nov 2026
Frequently Asked Questions
What did the KITA survey find about South Korean companies in Vietnam?
The Korea International Trade Association survey found that 92 percent of South Korean companies in Vietnam have no intention of withdrawing from the country. Among them, 87.5 percent cited cost advantage relative to other countries as the primary reason for staying.
How much have wages risen in Vietnam in recent years?
Vietnam's monthly minimum wage rose from $45.4 in 2010 to $205.3 in 2024 — an increase of more than 4.5 times over 14 years. The annual average wage growth rate of 11.4 percent is reportedly the fastest among major economies in Asia.
What is the business outlook of South Korean firms in Vietnam?
Nearly 60 percent of surveyed South Korean companies expect their Vietnam operations to improve over the next three to five years, compared to only 12.4 percent with a pessimistic view. Additionally, 72 percent believe Vietnam will continue to serve as a global business hub.
What did KITA recommend to South Korean companies in Vietnam?
KITA advised companies to review their cost structures and improve their operations in line with Vietnam's changing business environment. The association flagged growing regulatory compliance burdens alongside wage pressures as key areas requiring attention.
Why do South Korean companies continue to view Vietnam as attractive despite higher wages?
Companies maintain that Vietnam still holds a cost advantage relative to other potential locations, even after years of wage increases. Vietnam's role as an alternative manufacturing hub to China, combined with its market-access benefits and government investment incentives, sustains its appeal for Korean investors.
