Many financiers from the Republic of Korea (RoK) are expecting that regulations on financial investment activities in Vietnam will become clearer and more open with the revised Investment Law coming into force.

Regarding economic co-operation between the two countries during the novel coronavirus (COVID-19) pandemic, Hong Sun, vice president of the Korea Chamber of Business in Vietnam (Korcham), says that the crisis caused by the virus can be viewed as a chance for Vietnam to demonstrate sustained efforts in overcoming challenges. 

This will provide extra leverage for both sides as they aim to propel co-operation activities forward, he notes, with the nation’s efforts to reform and improve the national investment environment and to contain the epidemic boosting confidence among the Korean business community that the country remains a safe and attractive destination.

The Korcham representative affirms that Korean enterprises will strive to work alongside their Vietnamese counterparts to establish stronger ties to build new supply chains in the post COVID-19 period. Indeed, the country is rich in natural resources with a growing source of food and manufacturing industry, so there is an opportunity for the nation to boost its market expansion to the wider world, he notes.

According to the Korcham official and several Korean diplomatic representatives, the most pressing issue at present is to promote Vietnam-Korea economic co-operation by resuming air routes for Korean investors, experts, and people who are looking at coming to the nation to work in a new normal.

The Korean Ambassador to Vietnam Park Noh Wan believes the world is facing an unpredictable crisis as a result of the effects of the COVID-19. Therefore, the most important thing in joint relations at this time is to respond to changes in unison.

The prerequisite issue that needs to be tackled in bilateral relations is to normalise people-to-people exchanges and seek specific solutions that can support businesses in the two countries in the context of the global economy coupled with an increasing demand for goods being seriously affected by the COVID-19 pandemic.

Financial investment marks a major inflow into Vietnam

During the post-pandemic period, investors from across the world are set to come to the nation, although there exists plenty of competition in investment attraction with neighbouring countries such as Indonesia, the Philippines, and Thailand.

According to Hong Sun, the flow of Korean investment into the country can be divided into three separate phases. The initial two phases can be associated with labour-intensive investment projects and production of electronic components and devices. By phase three Korean financiers had shifted their focus to include indirect investment alongside direct investment.

The Korcham representative says more and more Korean securities, banking, and finance firms are seeking to enter the Vietnamese market. The scale of Korean investment flow is also increasing, from large conglomerates to small Korean start-ups and businesses, looking to enter the Vietnamese market.

With regard to the field of financial technology commonly known as fintech, the country and many other regional nations have yet to complete the legal framework for this field. The Korcham representative therefore recommends that the Vietnamese Government move to adopt an open policy aimed at widely developing fintech and dealing with any problem in accordance to the law.

“If rigorous 'fintech' regulations are set up in the first place, it will be very difficult for technology enterprises and talents to develop. Moreover, it is necessary to set up a special zone for startups, making it easier for any business or investor who are keen to invest in this field,” says Hong Sun.