South Korea's Investment to Boom

According to a report by the Korea Trade Investment Promotion Agency (KOTRA), investment from South Korea to Vietnam will boom after the ASEAN-South Korea Free Trade Agreement took effect from June 1.

 

KOTRA said that, in 2007, the first year of validity for the FTA, South Korean investment into Vietnam is estimated at US$1.5 billion, mainly for projects of infrastructureconstruction and metallurgy. Although the figure is lower than the record in 2006 with US$2.68 billion, the investment average is predicted to increase about 10 per cent annually. The Vietnamese market will lure many more South Korean businesses in upcoming time thanks to the reduction of both the import tariff rates on materials and equipment to serve production in Vietnam, and the export tariff to the foreign market.   

 

In the first quarter this year, South Korea is the largest investor in Vietnam among 30 nations and territories investing in the country, with US$486 million. South Koreans are also keen on the information communication and technology field, in addition to construction, steel and iron, electronic goods, and equipment.

 

Last year, South Korea was the largest foreign investor in Vietnam with 207 investment projects worth of US$2.78 billion. Heavy industry attracted most South Korean capital, accounting for 55 per cent, followed by property with 20 per cent, and housing and hotel construction with 10 per cent. Thanks to sharply increasing capital in recent years, South Korea’s investment in Vietnam had, by the end of 2006, reached US$7.8 billion, making up 18.5 per cent of total foreign investment in Vietnam. Thus, South Korea has become Vietnam’s third big investor, devoting 8 per cent of its overseas investment to Vietnam.