Republic of Korea (RoK) is the largest foreign investor in Viet Nam with about 9,500 projects and over US$80 billion of registered capital, according to Do Nhat Hoang, Director of the Foreign Investment Department, Ministry of Planning and Investment.

Hoang was speaking at the forum "Promoting Investment Flows from South Korea into Viet Nam" hosted by Viet Nam News on October 18.

The director said RoK business community always regards Viet Nam as "the number one" investment destination among southern Asian countries because the two countries have a lot in common.

General director of Vietnam News Agency Vu Viet Trang said Viet Nam is not only South Korea’s biggest trade partner in ASEAN but also in its New Southern Policy.

In the first nine months of 2022, ROK came out second among nations investing heavily into Viet Nam with 290 projects, equivalent to a total investment of $3.8 billion. Hoang said he believes the two countries can fully realise the "Dual Goals" regarding trade and investment.

"Accumulated bilateral trade and accumulated ROK investment into Viet Nam is expected to reach $100 billion each by 2025," he said.

To attract more investment into Viet Nam, he called for a revision of the country's legal systems to bring them in line with international rules. He also said the country needs to prepare "clean" land and a high-quality labour force for the investments.

Bae Yong Geun, Vice Chairman of the Korea Chamber of Business in Viet Nam (KOCHAM), underscored Viet Nam as the epicentre of the Korean Wave in Southeast Asia and the two countries have become close partners over the decades.

He said RoK firms have an appetite for Viet Nam because the country has low labour costs, a strategic location next to China and a continuously-improving business environment.

More than 9,000 ROK firms have entered the country so far and cooperation has been made in various fields, including manufacturing, energy, education and tourism.

"Viet Nam is a labour-intensive powerhouse for RoK firms. The two countries are expected to boost cooperation in high value-added sectors in the future, such as finance," he said.

The vice chairman also underscored three unfavourable factors that disincentivise RoK firms. The first factor is the growing labour costs in Viet Nam, which are believed to be far higher than in the past.

The second represents geological uncertainties, such as the US-China trade relations, that make it more difficult for firms to enter the country. The last involves the lengthy process of permit approval that adds time to their projects.

Koen Soenens, General Sales & Marketing Director, DEEP C Industrial Zones, stressed that Viet Nam today is incomparable with how the country was 25 years ago in terms of investment attractiveness.

It is the case because Viet Nam is in the heart of ASEAN with a young, hard-working population and is well-connected thanks to many signed FTAs.

As the country is climbing up global value chains, the quality of local industries needs to keep pace. Unfortunately, too many firms in Viet Nam are still small-sized and unable to gain economy of scale.

"A lot of work still needs to be done if Viet Nam really wants to benefit from growing FDI," he said.

He urged firms to invest on a larger scale because large-scale production, coupled with a better-educated labour force and an understanding of FDI requirements, would improve standards in terms of servicing and production.

He also called on local authorities to carefully consider the way they promote Viet Nam overseas because their severe competition for foreign investment would result in "a race to the bottom".

Yoon Chang Woo, General Director of Posco Vietnam, said that RoK firms invested predominantly in Viet Nam's labour-intensive industries in the past, including textiles and footwear.

Thanks to Viet Nam's continuously-improving business environment, more industries have been open to RoK investments over the years.

He said Viet Nam is investment-attractive because it has an abundant labour force, political stability and adequate infrastructure. However, the country needs to promote its supporting industries to cater for higher investment.

"Viet Nam needs to implement more administrative reforms because ROK investors want to get things done fast," he added.

He also said climate change and carbon-neutrality have become the norm in the world. Viet Nam, accordingly, should incorporate the notions into their investment policy to keep up with the times.

Nguyen Thanh Nam, Lawyer and Chairman of Gattaca Law Firm, revealed that new regulations in Viet Nam are not retrospective. That means investors should have no worries about legal uncertainty in the country.

Vu Kim Chi, Deputy Head of Quang Ninh's Investment Promotion Agency, asserted that her province is ready to attract more RoK investors as it has laid all the groundwork for foreign investment.

Chi also shared eight competitive advantages of Quang Ninh Province, including its geo-strategic location in terms of economy and politics; abundant natural resources; the current socio-economic infrastructure; labour and human resources; the total area of the largest industrial park and economic zone in the country; abundant energy sources; business investment environment, administrative reform; and “safe, friendly, attractive” destinations. — VNS