With Vietnam’s opening policy that suits international business and investment practices, and good Vietnam - Singapore bilateral traditional cooperation, Singapore investors have carried out many investment projects in Vietnam in recent years, becoming the second largest investor there. The Vietnam Business Forum interviewed Dr Phan Huu Thang, Director of the Centre for Foreign Investment Studies, on this matter. Giang Tu reports.
At present, Vietnam is welcoming a lot of so-called investment waves. What is your opinion about the business environment in Vietnam as well as the opportunity for foreign investors in the country?
Though world economies are facing numerous difficulties and global FDI inflows are declining, the value of disbursed FDI capital in first 10 months of 2011 in Vietnam rose 1 percent year on year to US$9.1 billion. So, it can be said that Vietnam remains a favourite destination for foreign investors.
Singaporean investors can find plenty of economically profitable projects because Vietnam is a developing country and is striving for the goal of national industrialisation and modernisation. The Government and people of Vietnam, with an opening policy in line with international business and investment practices, always respect, appreciate and support true investors doing long-term business in Vietnam. And, from Vietnam, they will have sufficient conditions to develop their business into other regions.
Is this the reason why many Singapore companies are interested in investing in Vietnam, making Singapore a top investor in the country?
As of October 20, 2011, Singapore had 968 valid projects with a total registered capital of US$23.3 billion, ranking third among 94 countries and territories with direct investment in Vietnam. In general, Singaporean enterprises strictly abide by Vietnamese investment laws and live in harmony with the business community. Their successful investments have contributed to the development of many economic sectors like real estate, accommodation service, catering service, manufacturing, processing and construction. These are also major interests of Singaporean companies in Vietnam.
Which investment field is Singapore’s strongest? What fields remain untapped?
Based on the registered investment capital and projects, Singapore enterprises are now investing heavily in five major fields: real estate (50 projects and over US$7.6 billion), processing and manufacturing (329 projects and US$6 billion), construction (80 projects and over US$3.5 billion), arts and entertainment (12 projects and US$1.7 billion) and hotel and restaurant (25 projects and over US$1.7 billion). Other fields are also attractive to Singaporeans, including warehousing (60 projects and US$707million), and health and social aid (11 projects and US$537 million).
In addition, Singapore is very famous for its strengths in financial, banking, insurance, education, wholesaling, retailing, and information and communication services. However, these fields have not been satisfactorily invested in Vietnam since Singapore companies have not found projects suitable for their capacity and targets in Vietnam, or they have different investment options. To make a change, we should step up effective investment promotion on the basis of matching investors with appropriate projects, in terms of financial capacity and technology that Singapore has and Vietnam needs.
How do you assess the investment prospects of Singapore companies in Vietnam?
In the first 10 months of 2011, Singapore invested in 81 fresh projects and increased investment capital in 20 existing projects with a combined registered capital of US$1.5 billion, ranking second among foreign investors in Vietnam (one place ahead of overall ranking). This fact shows that Singapore companies are still very interested in the Vietnamese market where they can promote their strengths and take advantage of the Vietnamese investment environment to reap success in their investments. In 2005, Vietnam and Singapore signed a framework agreement on economic connectivity for the following fields: finance, education, transportation, ICT, investment, trade and service. Annually, both parties alternately organise the Ministerial Conference on Vietnam - Singapore economic connectivity.
With the care and support of the two countries’ governments and from investment and business successes of Singaporean companies in the past time, the two-way investment relations are expected to keep thriving to contribute to the economic development of each country and the entire region in general.
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