Cambodia, Laos and Myanmar (the CLM countries) appear in almost every “Vietnam plus one” — or even “instead of Vietnam” — discussion whenever investors compare wages and land prices. But cheaper on a spreadsheet is not cheaper in operations. Myanmar after the 2021 coup carries political and sanctions risk of a completely different order; Laos is cheap on power and land but landlocked, dependent on transit transport routes and under public-debt and currency pressure; Cambodia has low labour costs and a flexible qualified investment project (QIP) regime but thin infrastructure and management depth. This article analyses when CLM is genuinely cheaper than Vietnam and what price comes with the difference.
Short answer
CLM is cheaper than Vietnam mainly in unskilled labour for labour-intensive industries and in certain project-based tax incentives. Once total cost of ownership is counted — logistics, power, disruption risk, compliance cost and scalability — Vietnam usually wins in industries that need deep supply chains, exports under free trade agreements or stable long-term governance. Cambodia is the most viable CLM option for mid-scale garments and footwear; Laos suits resource- and energy-linked projects; Myanmar today suits only investors willing to accept very high risk.
When CLM is genuinely cheaper than Vietnam
In Cambodia, the garment-sector minimum wage has recently been around USD 208 per month as a reference level — below Vietnam’s regional minimum wages under Decree 293/2025/ND-CP in many manufacturing areas on a converted basis. On tax, a QIP approved by the Council for the Development of Cambodia (CDC) may receive corporate income tax exemption for roughly 3 to 9 years depending on project type, against a standard 20 percent rate. In Laos, hydropower electricity and land outside the capital are materially cheaper than in Vietnam’s industrial provinces. In Myanmar, nominal wages are among the region’s lowest, but the advantage is eroded by low productivity and operational disruption. The common caveat: the “cheap” part concentrates in two cost lines — unskilled labour and tax incentives — while international transport, production electricity in Cambodia, buffer inventory and expatriate management usually cost more than in Vietnam.
Country risk — three entirely different profiles
Myanmar: risk at the level of “can we operate at all”
The February 2021 coup brought prolonged armed conflict, Western sanctions targeting military-linked entities, foreign-exchange controls with mandatory conversion requirements, and the risk of trade preference reviews. For exporters to the EU and the US, sanctions-compliance risk and ESG reputation risk can lead banks to refuse payments or buyers to cancel orders. This is no longer a cost risk; it is a project-survival risk.
Laos: public debt, currency and the landlocked problem
Laos faces high public debt pressure, a depreciated kip and elevated inflation in recent years, making imported materials and equipment costs hard to predict. Being landlocked, exports must transit Thailand or Vietnam, adding cost and time to every shipment. The Lao investment framework offers project-based incentives, but local implementation is uneven and land-concession disputes require careful due diligence before signing.
Cambodia: the most feasible of the three, with trade-offs remaining
Cambodia is politically more stable, the QIP channel through the CDC is relatively centralised and the garment industry is long established. However, production electricity prices are among the region’s higher ones, Sihanoukville port capacity is limited so much cargo still tranships via Vietnam or Singapore, skilled labour and middle management are scarce, and the EU’s Everything But Arms preferences for Cambodia were partially withdrawn in 2020 — a reminder that preferences granted unilaterally by a destination market can change faster than treaty-based ones.
Against Vietnam: the win is in total cost
Vietnam operates under the Investment Law 143/2025/QH15 effective from 1 March 2026, holds a free trade network including the EVFTA, CPTPP and RCEP that CLM has no equivalent of, and recorded disbursed FDI of USD 27.62 billion in 2025, showing a supplier ecosystem of real depth. The trade-off is steadily rising wages and industrial land rents — reference rents of about USD 143 per square metre in the South and USD 185 per square metre in the North per lease cycle in second-quarter 2026 market data. The practical allocation many groups choose is a combined model: labour-intensive, simple stages in Cambodia, and technical, speed-sensitive, FTA-export stages in Vietnam — rather than picking one country only.
Risks and practical notes
First, profit-repatriation and foreign-exchange risk in Laos and Myanmar is materially higher than in Vietnam: test the actual ability to buy foreign currency and remit funds with a concrete transaction scenario, not just by reading the rules. Second, none of the three countries has an investment-guarantee mechanism against adverse legal change equivalent to Vietnam’s Investment Law regime, so incentives negotiated with an investment promotion agency must be institutionalised as far as possible in the project approval itself. Third, CLM factories still depend on materials from China and Vietnam, so border or transport disruption transmits directly into the production line. Fourth, for Myanmar, screen the current sanctions lists and the compliance clauses in contracts with end buyers before any capital commitment.
Action checklist
- Compute five-year total cost of ownership including logistics, power, buffer inventory and management cost — not wages and tax incentives alone.
- Run a separate political and sanctions due diligence for Myanmar, including whether banks will process payments.
- Test foreign-currency purchase and profit-remittance mechanics in the target country with a concrete transaction case.
- Survey power, water, wastewater treatment and export transport routes at the intended site, including the transit plan.
- Require incentives to be recorded in the project approval of the competent authority, not left in a letter of intent.
- Build a fallback plan to shift part of production back to Vietnam if host-country risk exceeds your threshold.
- Review end buyers’ ESG requirements before choosing a site in Myanmar or Laos.
Frequently asked questions
When is investing in Cambodia, Laos or Myanmar cheaper than Vietnam?
When the product is simple, relies on unskilled labour, benefits from unilateral tariff preferences at the destination market and operates at moderate scale — clearest in garments, footwear and simple assembly in Cambodia. When a project needs EVFTA or CPTPP exports, a deep supply chain or fast scaling, Vietnam is usually cheaper on total cost despite higher wages and land prices.
What are the political and infrastructure risks in these three countries?
Myanmar: coup, conflict, international sanctions and foreign-exchange controls — the highest risk level. Laos: public debt, kip exchange-rate pressure and landlocked geography forcing transit for every shipment. Cambodia: high electricity prices, limited port capacity, scarce skilled labour and the precedent of partial EBA withdrawal.
Which industries suit these three countries?
Cambodia suits garments, footwear, bags and light assembly. Laos suits energy, responsible mining, agro-processing and services along transit corridors. Myanmar currently suits only essential goods for the domestic market, and only for investors accepting a very high level of risk.
FLAT Law Firm accompanies investors
FLAT Law Firm helps investors compare locations in the region on total cost and legal risk profile, and structures “Vietnam plus one” models so that production stages in a third country do not destroy the origin status and preferences of the finished product. If you are weighing Cambodia, Laos or Myanmar alongside Vietnam, contact FLAT to build a decision matrix before your site visits.
This article has been quality-reviewed by the FLAW AI Legal Council
