Singapore Increases Investment into Vietnam
HCMC – Singapore has become the third largest investor in Vietnam. According to Vietnam’s Foreign Investment Agency, at the end February, Singapore had poured US$33 billion worth of investment capital into the country. In the first two months of 2015, Singapore implemented 12 newly-invested projects and increased investment levels at a further eight projects.
Singapore has invested in 1,379 effective investment projects in Vietnam. Not only has it upped the number of projects it is conducting, but also the level of its investment into these projects, which is much higher than other investors. The average capital scale for Singapore’s projects is US$24 million, significantly higher than the average capital scale (US$14 million) for other investment projects.
While these investments have been scattered throughout Vietnam, the vast majority have been centered on Hanoi and Ho Chi Minh City, with US$4.17 billion and US$9 billion respectively in total registered capital.
Investors from Singapore have put money into 18 out of 21 economic sectors in Vietnam. The top investment areas include the following:
- Processing and manufacturing – with 426 projects and a total registered capital of US$13.37 billion (40.5 percent)
- Real estate – with 74 projects and a total registered capital of US$10 billion (30.1 percent)
- Accommodation and catering – with a total registered capital of US$1.88 billion
- Construction – with a total registered capital of US$1.86 billion
- Entertainment – with a total registered capital of US$1.78 billion
Vietnam offers a range of investment vehicles, however, 63 percent of total Singaporean registered capital has been in the form of wholly foreign owned projects – 995 projects worth a total of US$20.75 billion. A further 27 percent of Singaporean investment has been in the form of joint ventures, joint stock companies, and business cooperation contracts.
Vietnam and Singapore have been working to build up bilateral trade for some time now. In 2014, trade between the two countries was up 20.3 percent year on year. Vietnam’s strategic location, low-cost labor, burgeoning consumer class, and plentiful financial incentives for foreign investors have made the country an attractive destination for Singaporean foreign direct investment. In turn, Singapore, with the highest GDP per capita in ASEAN, remains a prime market for Vietnamese exporters.
South Korea and Japan remain Vietnam’s largest foreign investors, with 4,240 projects worth US$37.84 billion in total and 2,556 projects worth US$37.37 billion respectively. Over 100 countries and territories have investments in Vietnam.
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