Welcoming the new wave of Korean investment in Vietnam

• South Korean President begins state visit to Vietnam

• South Korea and Vietnam launch new chapter in bilateral cooperation

The beginning of the wave of migration to Vietnam ?

During the 3 days (June 22-24), President of the Republic of Korea Yoon Suk Yeol and his wife paid a state visit to Vietnam at the invitation of President Vo Van Thuong. Notably, accompanying the Prime Minister of the Republic of Korea was a delegation of 205 Korean enterprises in many fields such as distribution, finance, law, healthcare, information technology and services. Among them, there were presidents and senior leaders of leading Korean corporations that have invested in Vietnam such as: Samsung Electronics, SK, Hyundai Motor, LG, Lotte, Hyosung, Hanwha, Hanjin...

Samsung will mass produce semiconductor chip grids in Vietnam

Korean Ambassador to Vietnam Oh Young Ju said this was the largest business delegation in President Yoon Suk Yeol's recent overseas visits. This shows that the economic, investment and trade cooperation between Korea and Vietnam has been developing rapidly and impressively.

Associate Professor, Dr. Nguyen Thuong Lang, Institute of International Trade and Economics, expressed his impression of the number of more than 205 Korean enterprises coming to Vietnam on this occasion. He said: The most impressive thing is that the Korean business delegation to Vietnam is very large, covering the core areas of Korea, or more precisely, the strengths of this country. In March, 50 large enterprises from the US came to Vietnam to discuss investment and business cooperation. As a result, at the end of May, there were "eagles" coming to nest in Vietnam . Apple opened an online store to sell to Vietnamese customers, Boeing affirmed that it will invest in the supply chain of spare parts, cooperate in some specific areas such as helicopters, transportation...

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"Of course, the trip in March was not effective, but May was. But it is thanks to the trips of investors, even diplomatic trips, at these important events that are the premise, creating an effective push for the investment wave later. Moreover, Vietnam has long been a global production base for many leading Korean corporations. Therefore, it can be said that this is an important trip, starting a wave of investment shift from Korea to Vietnam if Vietnam can demonstrate the need to promote attracting investment and other resources from Korea", Associate Professor, Dr. Nguyen Thuong Lang emphasized.

Hyundai (Korea) car production in Vietnam

FDI capital increased more than 20 times after 10 years

Compared to 10 years ago, in 2013, investment capital from Korea to Vietnam was only 3.8 billion USD, now it has jumped to over 80 billion USD, an increase of 21 times. At the end of 2022, Vietnam and Korea issued a Joint Statement upgrading their relationship to a Comprehensive Strategic Partnership, officially opening a new chapter in bilateral relations.

Many Korean businesses are successful in Vietnam.

This is a win-win meeting. Investors need to find new markets and expand opportunities in a Southeast Asian country with remarkable reforms; Vietnam is valuing innovation, the semiconductor industry, etc., where Korea has strengths. In terms of attracting each other's advantages, practical and open negotiations and exchanges are essential. The advantage for both sides is that there are large Korean investors who have "rooted for a long time" by continuously expanding their investments and are having great success in Vietnam .

Associate Professor, Dr. Nguyen Thuong Lang

Many financial enterprises want to invest billions of dollars in Vietnam

Korean businesses expect that President Yoon's visit as well as the talks with Vietnamese leaders will open up new cooperation, remove difficulties for foreign investors, including Korean investors, in the context of the difficult world economic situation. In addition, businesses of the two countries will also sign large projects on energy, investment in industrial parks, residential areas... Many Korean financial businesses are also looking forward to investing in Vietnam with billion-dollar projects. Mr. Hong Sun

(Chairman of the Korean Chamber of Commerce in Vietnam - Korcham)

Details of the visit have not been disclosed, but according to information from the Korean media, during these 3 days, the delegation is expected to sign a number of memorandums of understanding on cooperation. Leading Korean enterprises are looking to ensure supply chain cooperation and expand exports. In fact, the above-mentioned large Korean corporations already have factories or large-scale investment cooperation in Vietnam . Many corporations are still planning to expand. Among them, Samsung is not only the largest Korean investor but also the largest foreign investor in Vietnam .

At the end of 2022, Samsung inaugurated the group's largest R&D (research and development) center in Vietnam and Samsung Electronics achieved an export turnover of 65 billion USD in Vietnam , accounting for more than 9% of the country's total export turnover. More than 60% of Samsung phones sold globally are manufactured and assembled at the group's factories in Vietnam . This enterprise has planned to invest an additional 3.3 billion USD in Vietnam , of which 2 billion USD has been invested in projects in Thai Nguyen and Ho Chi Minh City. It is expected that by the end of this year, Samsung will mass produce semiconductor chip grid products at Samsung's factory in Thai Nguyen.

Similarly, LG Group also plans to pour an additional 5 billion USD into Vietnam in the near future; Lotte Group is in the process of completing Lotte Mall Hanoi and building the smart complex - Lotte Eco Smart Thu Thiem; SK is still a major foreign investor in two large Vietnamese corporations, Masan and Vingroup; Hyundai Motor inaugurated the Hyundai Thanh Cong No. 2 factory in Ninh Binh at the end of last year...

Recently, on June 12, at the Hai Phong - Korea Investment and Trade Promotion Conference 2023, held in Seoul (Korea), Hai Phong City leaders awarded investment registration certificates to 4 projects with an investment capital of 230 million USD to the projects Bumhan Vina Heavy Industries - Nam Dinh Vu, Haewon Vina Co., Ltd., Hala Electronics Vina Co., Ltd., EST Vina HaiPhong Co., Ltd., and signed cooperation agreements in the coming time with a committed investment capital of up to 1.5 billion USD.

Vietnam is becoming an "attraction" for Korean businesses.

It can be said that Korean investment in Vietnam has increased continuously and steadily over the years. In 2022, due to the global economic downturn and the impact of geopolitical conflicts around the world, FDI capital from Korea to Vietnam decreased, but this is still a partner with new investment decisions and increased expansion. In particular, while some foreign investors "shrink", investors from Korea are still accelerating expansion and applying for new licenses in Vietnam . Specifically, Korean investors account for 20.4% of new projects, 32.6% of adjustments and 34.1% of capital contributions and share purchases.

Economist, Dr. Vo Tri Thanh, Director of the Institute for Brand Strategy and Competitiveness Research, commented that a large Korean business delegation of more than 200 members visiting Vietnam this time shows that the Vietnamese investment environment has many factors that attract investors. Notably, in this delegation, there are many high-quality investors.

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Visit highlights economic ties with Vietnam

Article in The Korea Times published on June 22 about President Yoon Suk Yeol's visit to Vietnam

Screenshot The Korea Times

KBS television station, Arirang TV network, Yonhap news agency and several major Korean newspapers such as The Korea Times and The Korea Herald yesterday simultaneously reported and published articles about the visit to Vietnam of Korean President Yoon Suk Yeol.

In particular, KBS quoted an announcement from the South Korean Presidential Office saying that during President Yoon's visit to Vietnam , the two sides will discuss measures to expand and develop bilateral relations, which have been upgraded to a comprehensive strategic partnership.

Yonhap also quoted the South Korean presidential office as saying that President Yoon's visit will focus on strengthening economic cooperation with South Korea's third-largest trading partner, with various economic events planned, including a bilateral partnership fair, a luncheon with South Korean businessmen in Vietnam and a business forum.

A day before President Yoon arrived in Vietnam , the Korea JoongAng Daily published an article in English titled “Yoon’s visit highlights economic ties with Vietnam .” The article noted that South Korea and Vietnam upgraded their bilateral relationship to a comprehensive strategic partnership last year and that the relationship could deepen as the two sides reached an agreement last month to enhance supply chain resilience.

"The economic relationship between Korea and Vietnam has achieved significant progress over the past three decades. We predict that bilateral trade will double to $150 billion by 2030," Korea JoongAng Daily quoted Kim Bong-man, head of the International Affairs Department at the Federation of Korean Industries (FKI), as saying.

Faculty of Arts

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"FDI is always an important capital channel for the economy. In the context of the global economy showing signs of slowing down, Vietnam needs to take advantage of attracting high-quality capital through important meetings and exchanges like this. Investors with green growth projects, environmentally friendly projects, sustainable development projects, financial services, etc. need to be considered with goodwill," Mr. Thanh said and suggested that when calling for investment, attention should be paid to projects that transfer technology, skills, and expertise to domestic enterprises. Quality capital is important, more importantly, there must be regulations on technology transfer, Vietnamese enterprises must have the opportunity to participate in the global supply chain.

Associate Professor, Dr. Nguyen Thuong Lang commented: "This trip can also be considered an important exploration of Vietnam 's policy when preparing to implement a global minimum tax of 15% in 2024. If the non-retroactive principle is applied, large incentives can still be implemented. Vietnam must demonstrate to investors that attracting FDI to Vietnam is no longer a matter of tax exemptions, we have many other advantages that investors need to pay attention to. In addition, observations show that the delegation has many investors in the high-quality service sector. Perhaps businesses from the land of kimchi are looking to move and expand their business network in financial services, healthcare, etc. in Southeast Asia, in which Vietnam can be considered a "hub"? If Vietnam has appropriate proactive policies and attracts effectively, FDI capital from Korea in the high-end service sector will increase sharply in the coming time".

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