The production chain of Glonics Vietnam, a RoK-funded company (Photo: VNA) According to the Ministry of Planning and Investment (MPI), thecumulative registered FDI from the RoK in the period from 1988 – when the firstLaw on Foreign Investment of Vietnam was put in force - to September 2022amounted to more than 80.5 billion USD with more than 9,400 valid projects,making the RoK the biggest investor in Vietnam so far.
Since the Vietnam – Korea Free Trade Agreement (VKFTA)officially came into effect in 2015, the RoK’s registed FDI into Vietnam almostdoubled.
A milestone was seen in 2014 when the RoK became thelargest investor in Vietnam with a total registered capital of 7.32 billion USD.Statistics of the Ministry of Planning and Investment showed that theregistered FDI from the RoK hit a record of 8.49 billion USD in 2017 but sloweddown to 7.2 billion USD in 2018 and 7.57 billion USD in 2019.
Due to the impacts of the COVID-19 pandemic, the FDI fromthe RoK dropped to 3.95 billion USD in 2020 but bounced back to 4.95 billion USD in2021.
From January to September this year, the RoK registed 3.8 billion USD of FDI in Vietnam, a drop of 2.38% againstthe same period last year.
Although ranking second in terms of registered FDI value inthe January-September period after Singapore, the RoK was the partner with thehighest number of investors who showed interest and made new investmentdecisions in Vietnam in the period, the ministry’s report revealed.
The RoK is becoming an increasingly important investor in Vietnam,not only because of its huge capital value but also the compatibility of the investment to Vietnam’s FDI attraction policies. Thepresence of Korean enterprises in most of the economic sectors in Vietnam wascontributing significantly to the country’s economic restructuring, exportgrowth and job creation.
According to the MPI's Foreign Investment Agency, Koreaninvestment was mainly poured into the processing and manufacturing industry(74% as of November 20, 2021) thanks to the heavy investment of high-profileinvestors such as Samsung, LG, Hyundai, and Posco, followed by the real estatebusiness (13.1%) and construction (3.8%).
Vietnam-RoK investment partnership thrives over three decades (Photo: VNA) The presence of Korean investors such as Samsung, LG,Hyosung, Hanwha, Hyundai, CJ, Lotte, and Posco promoted the development of the supporting industry in Vietnam.
Notably, the network of local suppliers to Samsung increasedto 254 as of the end of 2021, 51 of which were Tier-1, from just fourin 2014.
Samsung, now the most high-profile Korean investor in Vietnamwith an estimated investment of more than 20 billion USD, said that the groupwill continue to provide support to enable domestic enterprises to participatemore in the global value chain.
It is estimated that there are more than 8,000 Koreanenterprises operating in Vietnam which provide 1 million jobs domestically andcontribute around 25-30% of Vietnam’s export revenue every year.
At a dialogue with the RoK’s Ambassador Park Noh-wan andrepresentatives of Korean associations and enterprises in Hanoi in late July,Prime Minister Pham Minh Chinh pledged to create more favourable conditions forforeign investors in general and the Korean business community in particular to invest efficiently, successfully and sustainably in Vietnam, with a focus onadministrative reforms.
Vietnam expected more investment from the RoK inthe fields of high technology, innovation, research and development, digitaltechnology, renewable energy, electronics and infrastructure development, hesaid.
The PM expressed his hope that the FDI inflow from the RoK will help integrate local firms into the global supply chain network while promotingthe development of a digital economy, green economy, circular economy andsustainable development of Vietnam./.
At a dialogue with the RoK’s Ambassador Park Noh-wan andrepresentatives of Korean associations and enterprises in Hanoi in late July,Prime Minister Pham Minh Chinh pledged to create more favourable conditions forforeign investors in general and the Korean business community in particular to invest efficiently, successfully and sustainably in Vietnam, with a focus onadministrative reforms.
Vietnam expected more investment from the RoK inthe fields of high technology, innovation, research and development, digitaltechnology, renewable energy, electronics and infrastructure development, hesaid.
The PM expressed his hope that the FDI inflow from the RoK will help integrate local firms into the global supply chain network while promotingthe development of a digital economy, green economy, circular economy andsustainable development of Vietnam./.
VNA
