Singapore had represented the second largest foreign investor in Vietnam before moving into top position, surpassing the Republic of Korea (RoK) despite suffering two years of COVID-19, including during the first month of this year.
Previously, either the RoK or Japan had held the top position, but in 2020, Singapore suddenly took first place, with a total registered capital reaching roughly US$9 billion, including US$1 billion of investment through capital contribution and share purchases. This accounted for 31.5% of total foreign investment in Vietnam, doubling the figure of US$4.5 billion recorded in 2019.
Last year saw Singapore continue to "take" the leading position from the RoK, with a total registered capital even higher than in 2020, amounting to US$10.7 billion and accounting for 34.4% of total foreign investment capital in the country, up 19.1% over the same period last year.
This can be viewed as a remarkable result, mainly because for many years in a row the city-island state has usually ranked third, with investment commitments in the nation standing at about US$4 billion to US$5 billion. Even as recently as 2015 Singapore only poured in US$2 billion, ranking fifth.
According to Do Nhat Hoang, head of the Foreign Investment Agency under the Ministry of Planning and Investment, 2021 saw Singapore's investment capital 2.2 times higher than the RoK’s investment capital and 2.7 times higher than Japanese investment. This year however, Singaporean financiers have decided to inject US$3.1 billion into Long An Gas Power Projects 1 and 2.
Along with these moves, there has also been an investment of US$2.19 billion through capital contribution and share purchase of Vinfast Trading & Investment Pte.Ltd and Vinfast Trading and Production Company Limited. These two projects alone account for over 49% of Singapore's total investment in the country.
Furthermore, early this year saw another spectacular usurpation, with the initial month of this year seeing Singaporean investors registering to invest US$666 million in the nation, making up 31.7% of total foreign investment in the Vietnamese market and continuing to hold the leading position.
This month, investors from the island nation contributed capital and bought shares valued at over US$334 million from MV2 Real Estate Joint Stock Company.
This is the primary reason why Singapore surpassed Japan to become the second largest investor in the country.
It is therefore not too difficult to explain why for two consecutive years, Singapore held the top position in terms of foreign investment in Vietnam. Discussing with the media, Vietnamese Ambassador to Singapore Mai Phuoc Dung said that Singapore pouring a large amount of capital into Vietnam demonstrates the confidence of investors in Vietnamese macro policies, the local business environment, and development prospects.
According to a recent study carried out by the Foreign Investment Agency, along with the trend of investment shifting away from China, the construction of new production and assembly facilities in ASEAN member states is increasing. This is leading to an increase in demand for high-quality business and infrastructure services in the region.
Possessing strengths in the region in terms of service provision, infrastructure, and logistics, Singapore businesses will strive to take full advantage of this opportunity to develop more service and infrastructure facilities in order to meet the needs of shifting investment capital in foreign countries, including Vietnam.
In line with this, logistics firms, technology start-ups, and businesses in the fields of financial services, healthcare, and education will increase their investment expansion abroad, including Vietnam, as a way of responding to this trend.
After a two-year hiatus due to COVID-19, many Singaporean entrepreneurs and investors are waiting to return to Vietnam as they seek further investment opportunities. Currently, international commercial flights have been reopened, thereby allowing Singaporean citizens to enter the nation. This is an important condition for Singaporean investment in the Vietnamese market to continue to record strong growth moving forward.
VOV
