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The investment situation from Singapore in Vietnam
Singaporean investment spans across most economic sectors in Vietnam, including oil and gas exploration, industrial production, and the processing of agricultural, forestry, and fisheries products. However, the majority of this capital is concentrated in the services sector. This article will provide a detailed analysis of the investment contributions made by Singapore in various sectors of Vietnam’s economy.
Latest investment data from Singapore in Vietnam in 2023
Singapore is one of the four ASEAN countries that have taken the lead in exploring investment opportunities in Vietnam since the 1990s. Subsequently, the investment capital from Singapore to Vietnam has increased rapidly, even during the Asian financial crisis of 1997, when most other countries experienced significant declines.
Experts assert that Vietnam continues to be an attractive destination for Singaporean investors due to several factors: the similarities in market openness, shared aspirations for sustainable development, and mutual participation in free trade agreements.
The Foreign Investment Agency (under the Ministry of Planning and Investment) announced the latest figures indicating that in the first seven months of this year, 44 new investment projects from Singapore were licensed in Vietnam, with a total capital exceeding $1.3 billion USD. During the same period, 8 projects from Singaporean investors received approval for capital increases, totaling over $13.3 million USD. Singapore ranked second among 39 countries and territories investing in Vietnam.
Recently, Singaporean investors have been showing great interest in Vietnam’s infrastructure sector, with a substantial amount of capital being invested in projects to build residential complexes, office buildings, and hotels.
2023 marks the 50th anniversary of the establishment of diplomatic relations between the two countries and the 10th anniversary of the Vietnam-Singapore strategic partnership. Singaporean enterprises’ investment projects in Vietnam are primarily concentrated in the processing industry, which accounts for about 40% of the total investment capital. The second-largest sector is real estate, followed by the electricity production sector. Most of Singapore’s investment projects are large-scale. For example, three significant projects from Singapore in Vietnam include the Bac Lieu liquefied natural gas (LNG) power plant (licensed in 2020, with a registered capital of $4 billion), the Nam Hoi An resort in Quang Nam (licensed in 2010, with a registered capital of $4 billion), and the Long An I and II LNG power plant project (licensed in 2021, with a registered capital of $3.12 billion).
Benefits of Foreign Investment from Singapore in Vietnam
- Clear and Transparent Legal System: The legal system of Vietnam is progressively being constructed and refined, contributing significantly to the establishment and development of a socialist-oriented market economy. This process aids in enhancing the political system and creating a legal environment conducive to international integration. Efforts are being made to reform administrative procedures, simplifying processes and reducing the time required to resolve applications.
- Stable and Attractive Business Environment for Foreign Investors: The business environment fosters conditions for enterprises, enabling them to operate more efficiently if they capitalize on these advantages. Conversely, it also poses challenges that can hinder a business’s development if it fails to adapt to the environment. Therefore, the business environment significantly impacts enterprises. Currently, the business environment in Vietnam is developing positively, which is one of the factors attracting investment from Singapore into Vietnam.
- Political Situation: The stability and sustainable development of a political regime depend on various factors, including economic, political, cultural, social, defense, security, and foreign relations. Vietnam is recognized by the international community as one of the countries with a stable political situation. This stability ensures a favorable business environment for enterprises.
- Abundant Human Resources: Human resources are a crucial production factor that is indispensable in current economic activities. This resource is continually trained, improved, and emphasized, leading to an enhancement in quality. In enterprises, a high-quality labor force undoubtedly contributes to sustained development.
- Modern and Synchronous Infrastructure: A well-developed and modern infrastructure will promote economic growth and enhance the productivity and efficiency of the economy.
- Political Advantages and Economic Growth: Vietnam benefits from political stability, high and consistent economic growth over several years, competitive production costs, and abundant human resources, particularly during its demographic dividend. Additionally, Singaporean investors regard Vietnam as a potential market with a population of 90 million, coupled with extensive economic and international integration processes. By investing in Vietnam, Singaporean enterprises, as well as foreign investors in general, will have numerous opportunities to expand their export markets to countries with which Vietnam has signed Free Trade Agreements.
Some Notable Projects with Singaporean Investment in Vietnam
The Bac Lieu Liquefied Natural Gas (LNG) Power Plant Project is part of the Bac Lieu LNG Power Center, licensed on January 16, 2020. The investor is Delta Offshore Energy Pte. Ltd. The total investment from Singapore in this project is USD 4 billion.
The Nam Hoi An Development Company Project (Nam Hoi An Resort) was licensed on December 10, 2010. The investor is Genting VinaCapital Investment Pte. Ltd. The total investment from Singapore in Vietnam amounts to USD 4 billion, located in Quang Nam Province.
The Long An LNG Power Plant I and II Project was licensed in 2021, with a registered investment capital of USD 3.12 billion.
In addition to the energy sector, Singaporean investors are also interested in the industrial real estate sector in Vietnam. A notable project in this area is the Vietnam-Singapore Industrial Park (VSIP). This is a joint venture between the Vietnamese company Becamex IDC and a consortium of Singaporean investors led by Sembcorp Development Group.
If have any questions regarding investment from Singapore in Vietnam, please contact Siglaw Law Firm for detailed answers!
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