A CLOSER LOOK AT VIETNAM-SINGAPORE ECONOMIC COOPERATION

Over nearly half a century of cooperation, Vietnam and Singapore have achieved numerous outstanding achievements, especially in the field of business investment, economics, and commerce. Despite the surge of Covid-19 in recent years, Singaporean investors are constantly seeking opportunities to diversify and expand their business presence in Vietnam. As of July 2022, Singapore has become the second largest foreign direct investor (FDI) in Vietnam, only after South Korea.

Thriving Economic Cooperation from Solid Foundation

Up until now, Vietnam has also had about 118 valid investment projects in Singapore, with a total registered capital of 498 million USD, mainly focusing on the fields of science and technology, retail trade, automobile and motorcycle repair, information and communication technology, and the manufacturing and processing industry.

Economic cooperation is the cornerstone of Singapore-Vietnam relations. Singaporean entrepreneurs always consider Vietnam as one of the top attractive investment destinations in the whole world…

Vivian Balakrishnan - Singapore's Minister for Foreign Affairs

For many years, Singapore has maintained its position as a leading investor in Vietnam, ranking second among the 140 countries and territories that have invested in Vietnam. As of February 2022, Singapore had 2,860 valid investment projects in Vietnam with a total registered capital of 66 billion USD, with a focus on the process industry, manufacturing, real estate, electricity, gas, production, and distribution.

The Vietnam-Singapore Industrial Park (VSIP) is currently the most well-known investment project in Vietnam. This is deemed a symbol of economic cooperation between the two countries, making an important contribution to Vietnam's socio-economic recovery and development. In the 25 years since the first park was established, there have been another 10 VSIP projects located in 7 localities, attracting 14 billion USD in investment and creating more than 270,000 jobs for Vietnamese locals.

The VSIP project, along with other initiatives in the past, paved the way for Singaporean investors to select the Vietnamese market and its domestic businesses as their preferred locations and partners. On January 18th, 2022, Quadria Capital - an Asian private investment fund headquartered in Singapore, completed an investment of 90 million USD in “Con Cưng”- a Vietnamese mother and baby retail chain, with an ambition of helping this brand to open 2,000 more stores by 2025. This investment marks Quadria Capital's second foray into the Vietnamese market, following the acquisition of FV Hospital in 2017.

On January 20th, Mio - a Vietnamese e-commerce platform specializing in selling and distributing agricultural products via social networks, successfully raised over $8 million in a Series A funding round from Jungle Ventures. Jungle Ventures is a Singapore-based investment fund that focuses on helping young start-up entrepreneurs in Southeast Asia and India. In Vietnam, Jungle Ventures is well-known for its investments in KiotViet and Dat Bike, a startup that produces electric motorcycles.

Top Emerging Industries for Singaporean Entrepreneurs to Invest in 

In a recent interview, Jaya Ratnam - Singaporean Ambassador to Vietnam pointed out three areas that are becoming increasingly attractive to Singaporean investors in Vietnam in the near future. As follows:

Supply chain and logistics 

Singapore companies hope to contribute more expertise, human resource training, and digital solutions to develop the logistics sector in Vietnam.  

Vietnam Airlines (VNA) and Vietnam Railways Corporation (VNR) recently signed an inaugural Memorandum of Understanding (MoU) with Singapore's supply chain and logistics provider YCH to establish multimodal connectivity for the Vietnam SuperPort. As the first multimodal infrastructure project invested in by a Singaporean firm in Vietnam, Vietnam SuperPort is anticipated to improve logistics and supply chain connectivity in the ASEAN region through the adoption of cutting-edge technologies and creative solutions. It is being propelled by the robust economic ties made possible by the close partnership and strong business ties between Vietnam and Singapore.

Green economy 

As Singapore entrepreneurs increase their investment in sustainable infrastructure and renewable energy, they keep looking forward to working with Vietnam with the ambition of achieving net zero carbon emissions by 2050. The collaboration between Sembcorp Group (Singapore) and Vietnam Electricity Corporation is a typical example of cooperation in this field. Besides, Sembcorp is also working on developing a network of Vietnam - Singapore Industrial Parks (VSIP) to integrate sustainability and innovation. In March 2022, Sembcorp celebrated the 11th VSIP launch in Binh Duong province, where it will build a carbon-neutral factory owned and operated by the LEGO Group.

Digital Economy 

Developing a digital economy will be a priority for both countries in the upcoming decades. Vietnam has identified the digital economy as one of the primary growth drivers propelling it to become a high-income country by 2045. The rapidly growing middle class and young population in Vietnam have made this sector extremely attractive in the eyes of Singaporean investors when it comes to e-commerce, digital payments, smart cities, and digital commerce.

The bilateral digital collaboration between the two nations would offer a platform for Vietnamese and Singaporean enterprises to transact with one another in an easy and safe manner, allowing them to build their digital operations. Establishing common ground in these areas will also aid in the safe and dependable adoption of developing technology, as well as encourage further innovation.

The Singapore Partnership Program (SCP) will evolve in tandem with Vietnam's demands. Vietnam is SCP's most important partner. Singapore has been assisting Vietnam's Industry 4.0 goal by sharing digital transformation expertise in a variety of domains such as governance, cybersecurity, e-commerce, trade and investment, and judicial reform.

Expanding future investment opportunities

To continue promoting Vietnam-Singapore economic cooperation in the future, both countries are prioritizing practical initiatives to create favorable conditions for businesses and investors to restore production, promote trade, and investment. The Sing-Viet Impact Ventures (SVIV) Vietnam Mission Trip (Hanoi) is the most anticipated event in Vietnam this September. 

Hosted by SVIV and Viettonkin Consulting, the SVIV Vietnam Mission Trip (Hanoi) is set to take place on September 22, 2022. This event will have the participation of Singaporean business owners from industries such as aerospace engineering, manufacturing, food and beverage, HR advisory, legal advisory, telecommunications, marketing, and tech startups, and Vietnamese entrepreneurs and high-level executives from industries such as consulting, legal advisory, education, marketing, IT outsourcing, energy, and tech startups. 

This collaboration between SVIV and Viettokin is a great opportunity for Singaporean businesses and investors not only to have a better grasp of Vietnam’s market but also to be able to gain a better idea of how to approach this market in the most effective way.

With a significant purpose and vision, SVIV will also help to promote the connection of collaboration between Vietnamese and Singaporean firms. Viettokin hopes that SVIV will provide you with excellent experiences and investment prospects. Contact us right away to improve your chances of business success!