Vietnam - Singapore Investment Cooperation: On Steady Rise

Vietnam and Singapore have established diplomatic relations since August 1, 1973. The two sides have signed many documents, namely Shipping Trade Agreements (4 /1992); Agreement on Air Transport (4 /1992); Trade Agreement (9/1992); Agreement on the Promotion and Protection of Investments (10/1992); Agreement on Cooperation in the field of management and environmental protection (14/05/1993); Agreement on avoidance of double taxation (3 /1994); Agreement on tourism cooperation (8 /1994).

 

More importantly, the Singapore-Vietnam Connectivity Framework Agreement which was signed on 6 December 2005 and came into force in January 2006, is an overarching bilateral economic cooperation framework between Singapore and Vietnam. The Agreement’s objectives were for both countries to work together to implement policies of mutual benefit, which will promote, facilitate and enhance trade and investment flows, and develop a skilled workforce to achieve high economic growth for the respective countries. It covers six sectors of cooperation, including Education and Training, Finance, Information Technology and Telecommunications, Investment, Trade and Services, and Transportation. 

 

In the almost five years of cooperation, there has been a steady deepening of both countries’ bilateral economic cooperation. 7 joint ministerial meetings co-chaired by Singapore’s Minister for Trade and Industry Lim Hng Kiang and Vietnam’s former Minister for Planning and Investment Vo Hong Phuc have been convened, with the most recent meeting held in August 2011. Officials from both sides have also engaged each other on a regular basis. Singapore’s strong commitment to the provision of capacity building for all six sectors has also enhanced Vietnam’s workforce skills. 

 

Currently, Singapore is the 3rd biggest foreign investor in Vietnam in terms of cumulative FDI capital, including 968 projects with registered capital of US$23.34 billion, covering 17/21 sectors of the economy, including real and estate, construction; healthcare and social work; transportation and storage; manufacturing; information and communication, .. etc as well as 39/63 provinces of Vietnam, first rank is in HCM city, second in Binh Duong, and the third in Hanoi.

 

Vietnam - Singapore Industrial Park - VSIP - is considered a model for developing industrial parks in Vietnam and has contributed to the provision of infrastructure for foreign investors in Vietnam, including The Vietnam-Singapore Industrial Park VSIP I, VSIP II (in Binh Duong Province), VSIP III (Bac Ninh Province) and VSIP Hai Phong.

 

In addition, there have been many Singapore typical projects, namely, Genting Vina Capital Investment Pte. LDT with its objective is to develop south Hoi An with registered capital of USD 4 bil; Nam Thang Long New Urban Area - Project of TA Associates International, Pte.,Ltd, Singapore. Registered capital of US$1.96 bil in Ha Noi; Project of First Solar Vietnam Holding Pte., Ltd with US$1.005 billion in HCM city producing solar photovoltaic modular.

 

It is clearly seen that Vietnam has a wide range of advantages for attracting Singapore FDI, such as contingent of young labor and low labor cost, large free land with rich natural resources, long coastline, located close to Singapore. Meanwhile Singapore investors are facing limitation of labor force, land for production, those advantages could make Vietnam to become potential destination for all Singapore investors.

Furthermore, the industrial sectors for calling FDI in Vietnam are the ones that Singapore has advantages, concretely electronics, computing and information technology; the industrial and service projects with high value added rate as hotel-tourism, real estate, projects of processing agricultural and aquatic products.

 

Moreover, education or human resource plays an important role in investment cooperation between both sides. Singapore has assisted Vietnam to educate officers in the field of Social administrative, science and technology R&D. Also, it is estimated that about Vietnamese 3000 students are studying in Singapore.

 

For promoting Singapore investment, it is crucial important to strengthen the implementation of Vietnam – Singapore Connectivity Framework Agreement as well as the operation of the task force for implementing the Vietnam – Singapore Connectivity Framework Agreement. On the other hand, assisting Singapore investors to solve difficulties of completing procedures is also a key issue for us to attract more Singaporean investors.