Deputy Prime Minister Le Minh Khai (4th from right) attended and addressed the seventh Singapore Regional Business Forum (SRBF) in Hanoi in July 2023, highlighting the effective cooperation between Vietnam and Singapore in various fields and sectors

The year 2023 also marked the 50th anniversary of diplomatic ties and the 10th anniversary of the strategic partnership between Vietnam and Singapore. Experts attributed Vietnam’s attractiveness to Singaporean investors to its market openness, sustainable development orientation, and participation in several free trade agreements, which were similar to Singapore’s own characteristics.

Many big and successful projects

Over the past five decades, Singapore has invested in thousands of projects in Vietnam. In 2022, Singapore was the largest foreign investor among 108 countries and territories that invested in Vietnam, with a capital of US$6.46 billion, accounting for 23.3% of the total FDI inflow into Vietnam that year. By the end of 2022, Singapore had become the top Southeast Asian investor in Vietnam with more than 3,600 projects, totaling over US$70 billion.

The main sectors that Singaporean enterprises invested in Vietnam were the processing industry, which accounted for about 40% of the total investment capital, followed by real estate and electricity production. Most of Singapore’s projects were large-scale (with an average size of over US$23.5 million per project, higher than the national average of over US$12.1 million per project). Some of the notable “mega projects” of Singapore in Vietnam included the Bac Lieu liquefied natural gas (LNG) power plant (licensed in 2020, with a registered capital of US$4 billion), the Nam Hoi An resort in Quang Nam (licensed in 2010, with a registered capital of US$4 billion), and the Long An LNG Power Plant Project I and II (licensed in 2021, with a registered capital of US$3.12 billion).

Interestingly, while many economies and regions reduced their investment in Vietnam in 2022, some of Singapore’s projects in Vietnam increased their capital significantly. For instance, the project of investing in the construction of urban infrastructure VSIP Bac Ninh services raised its capital by nearly US$941 million. The project of Fujifilm Business Innovation VN Co., Ltd in Ho Chi Minh City boosted its capital by nearly US$494.2 million.

 A special case of successful investment cooperation between the governments of Singapore and Vietnam was the Vietnam-Singapore Industrial Park (VSIP) - a comprehensive development model of a complex of industrial parks, interwoven with the urban system, comprising various components such as urban and housing areas, social and resettlement zones and green space. As of now, there are 13 VSIPs across the country, attracting a total investment of about US$17 billion and creating about 300,000 jobs in Vietnam.

Minister of Planning and Investment Nguyen Chi Dung (front, left) and Minister for Manpower and Second Minister for Trade and Industry Tan See Leng sign an MoU on the establishment of digital economy–green economy partnership, witnessed by Vietnamese Prime Minister Pham Minh Chinh and his Singaporean counterpart Lee Hsien Loong, Singapore, February 2023

Toward the future

Vietnam and Singapore share a strategic partnership and have established close economic cooperation frameworks, such as the Joint Declaration on a Comprehensive Framework for Cooperation in the 21st Century, the Framework Agreement on Singapore-Vietnam Connectivity, and various investment and trade agreements within the ASEAN framework and the CPTTP. These have provided a solid legal framework and a favorable policy environment for the enterprises of both countries to operate effectively in their investment and business activities.

Vietnam’s Deputy Minister of Planning and Investment Tran Quoc Phuong stated that Vietnam welcomed Singaporean businesses to invest in the high-tech sector, set up an innovation center and an R&D center, and build and develop industrial parks. He also encouraged them to focus on processing and manufacturing industries, supporting industries, high-quality services, and participating in the equitization process of state-owned enterprises. He emphasized that “the investment cooperation between Vietnam and Singapore is complementary and mutually beneficial.”

Singapore Ambassador Jaya Ratnam remarked that Singapore and Vietnam were also like-minded partners in free trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). He suggested that in 2023 and beyond, the two countries could strengthen their economic cooperation in five areas: digital economy and innovation; infrastructure; energy; sustainable development, with urgent actions to meet climate change goals; and multifaceted connectivity on trade, investment, finance, transportation, and tourism.

The Investment and Trade Promotion Center of Ho Chi Minh City (ITPC) collaborated with the Vietnam Trade Office in Singapore and the Singapore Chinese Chamber of Commerce and Industry (SCCCI) to organize a conference to introduce the investment-business environment and trade connection between Vietnam-Singapore businesses in Ho Chi Minh City in early March 2023. Mr. Kho Choon Keng, Chairman of SCCCI, stated that Singapore had always been among the top investors in Vietnam. He noted that Vietnam had quickly emerged as a popular market of interest for Singaporean companies in recent years. Singaporean companies had established a presence or were actively seeking opportunities in various sectors in Vietnam, such as infrastructure development, manufacturing, transportation, logistics, education, tourism, finance, and agriculture. Besides the main cities of Hanoi and Ho Chi Minh City, Singaporean investors had also explored investment opportunities in other provinces/cities of Vietnam. Mr. Kho Choon Keng suggested that the two countries could also cooperate in new areas, such as sustainability, green economy, and digital economy, in addition to strengthening their existing ties. Vietnam had maintained its advantage in attracting foreign investors, especially those from Singapore, due to its political stability, transparent and attractive investment environment, positive economic growth, and qualified and hard-working workforce.