09:24 | 14/05/2018 Economy
(VEN) - The Republic of Korea (RoK) retains its place as the largest foreign investor in Vietnam and is expected to increase its investments sharply in the near future, especially in the Vietnamese financial and banking sector.
US$59 billion of registered capital
The RoK ranked first among 76 countries and territories investing in Vietnam in the first quarter of this year. Data from the Ministry of Planning and Investment’s Foreign Investment Agency (FIA) show that Vietnam has so far attracted US$319.9 billion in registered foreign direct investment (FDI) capital, US$59 billion or 18.4 percent of which originate from Korean investors.
In the first quarter of 2018, Vietnam attracted an additional US$5.8 billion of FDI capital, US$1.84 billion or 31.6 percent of it from the RoK.
Leading Korean corporations including Samsung, LG, Lotte, Hyosung, and Doosan have chosen Vietnam for major investments.
Since setting up shop in Vietnam in 1994, Samsung Electronics has become the biggest foreign investor in Vietnam with telephone and electronic component factories in Bac Ninh and Thai Nguyen provinces and Ho Chi Minh City. Samsung Electronics also runs a US$300-million research and development (R&D) center in Hanoi. The company has so far invested more than US$10 billion in Vietnam, and its investment capital in the country is expected to grow to US$17 billion by 2020.
The LG Group, which first invested in Vietnam in 1995, has so far poured into Vietnam about US$2 billion. The Hyosung Group has invested about US$3 billion in Vietnam. Chairman and CEO Cho Hyun Joon said the group would increase its investment capital in Vietnam to US$6 billion by 2020.
Economists are also forecasting a new wave of Korean investment in Vietnam. While existing big Korean investors will be increasing their investment capital, many other Korean corporations and investment funds are eyeing various other target industries, especially finance and banking.
Speaking at a recent seminar in Hanoi, JongKu Choi, Chairman of the Financial Services Commission (FSC) of the RoK, said his government is implementing its New Southern Policies, which attach great importance to cooperation with ASEAN (Association of Southeast Asian Nations) countries, including Vietnam. The FSC is promoting financial and banking cooperation with ASEAN, including Vietnam, he said.
The Governor of the State Bank of Vietnam, Le Minh Hung, and FSC Chairman JongKu Choi recently signed a memorandum of understanding (MoU) on financial reform cooperation. Economists say this MoU will pave the way for Korean investment capital to Vietnam’s finance and banking sector.
The growing number of newly founded businesses in Vietnam has contributed to making Vietnam’s financial and banking market attractive to foreign investors, including those from the RoK.