- News in Vietnam
- 12 August 2022
Expecting a new surge of investment from Korean businesses
Korean investors have considered Vietnam as an attractive destination with strong cooperation potentials in many sectors. Vietnam needs a transparent policy to welcome new wave of investment from Korea.
Vietnam is still an attractive magnet.
Mr. Kwon Seung Taek, Vice Chairman of the Korea-Vietnam Economic and Cultural Association (KOVECA) delivered a speech at the Conference to attract Korean FDI into Ho Chi Minh City and the southern provinces. Vietnam is one of the countries with a fast-digital transformation speed and a young population that is considered an attractive investment destination for Korean enterprises.
That attractive point is demonstrated by the fact that 30 Korean associations and 50 enterprises attended the Conference to seek investment opportunities in Vietnam with a vast array of fields such as infrastructure, urban areas, hospitals, schools, renewable energy, high technology, and vocational training.
If strengthen the investment cooperation between Korean enterprises, which have modern technology, techniques, and significant investment capital, and Vietnam’s booming market, young, and ample human resources, the trade scale would constantly widen, especially in the current global trade fluctuations. This would also be an opportunity to increase the achievable bilateral trade turnover to 100 billion USD in 2023 and 150 billion USD in 2030, according to Mr. Kwon Seung Taek.
Leaders of Long An, Dong Nai, and Khanh Hoa localities said that they are willing to welcome and create all favorable conditions for Korean investors to seek investment opportunities.
Investors have assessed that the two countries still have growth prospect and potential for cooperation in many fields. Previously, Korean businesses have only focused on investing in big cities such as Hanoi, Ho Chi Minh City, and neighboring provinces. Now Korean companies have expanded their investment to other localities.
According to statistics, Korea has always remained as top investor in the southern provinces. As shared by Mr. Le Huu Hoang – Vice Chairman of Khanh Hoa Provincial People’s Committee, the province has attracted 30 projects from Korea with a total investment capital of 300 million USD and the country has also ranked third among those investing in Khanh Hoa. Khanh Hoa is seeking for investment capital for a sewage and waste treatment projects in Cam Lam district and Nha Trang city.
According to Mr. Nguyen Minh Lam, Vice Chairman of Long An Provincial People’s Committee, South Korea currently has 209 investment projects in Long An with a total investment value of 900 million USD and has ranked second in direct investment country group of Long An.
Mr. Lam also addressed that Long An is expanding traffic routes connecting industrial zones to attract foreign investment. In addition, the province also focuses on site clearance to prepare 1000 hectares of clean land fund for investment attraction.
In the future, Korean businesses will change their investment strategy by redirecting and expanding their investment locations to suit each local advantages, according to Mr. Kwon Seung Taek. If Korean businesses in the past, invested in Vietnam with plenty of labor-intensive industries, in the coming time, manufacturing and high-tech sectors will attract investors to pour capital into Vietnam.
Wishing for more transparent investment policies
Although Vietnam is a potential investment evironment, investment policies have still greatly concerned the Korean investors.
Mr. Choi Jeong Pil, General Director of JP Investment Fund Management Company, suggested that Vietnam should bolster the projects enlisted for calling investment capital until 2025 in the most detailed way so that investors and investment funds can assess the project’s potential and make investment decisions. In national investment list, it is necessary to specify legal procedures, permits, and site clearance conditions.
If the investment inflow halts or the projects are delayed, the plan will be disrupted and investor’s loss of faith, according to Mr. Choi Jeong Pil.
He has suggested creating conditions for funds to participate in the state-owned enterprise equitization. Foreign funds will contribute to capacity heightening and help businesses participate in the global supply chain. When the pandemic occured, businesses could swiftly stabilize and navigate the direction to effectively access experience, techniques, technology, and management platforms, thereby leading the development of the medium and small business community to initiate the impetus for growth. Mr. Choi Jeong Pil emphasized that they want to be involved in technical and technology support, digital transformation, and digital economic development in Vietnam.
A representative of a Korean investment enterprise investing in the environment in Vietnam said that this is an indispensable field, in which waste treatment projects require a long-term investment of 20-30 years with a lot of government support. For this field, the State needs to build infrastructure in combination with businesses’ investment in technology.
Enterprises wish that Vietnamese Government could have a more transparent and consistent policies, therefrom it will be easier to attract investors to this field.