14:36 | 28/02/2017 Investment
(VEN) - According to the Ministry of Planning and Investment’s Foreign Investment Agency, as of the end of January 2017, Vietnam attracted 446 Thai direct investment projects totaling US$8 billion in registered capital. Thailand currently ranked 10th among the 116 foreign countries and territories investing in Vietnam and has become the third biggest ASEAN investor in the country, after Singapore and Malaysia.
According to the Ministry of Planning and Investment, Thailand was one of the first foreign investors in Vietnam, beginning its investment in the country in the 1990s. Thai investment experienced the strongest growth from 2006 to 2008. In this period, Vietnam attracted US$23.3 billion from ASEAN countries, including almost US$5 billion from Thailand. Thai investment slowed down due to the regional financial crisis and has been on an upward curve again since 2013.
Thai investment is spread through different fields. The processing and manufacturing industry alone has attracted more than 200 projects totaling over S$7.03 billion in registered capital, accounting for 87.2 percent of all Thai registered capital in Vietnam. The US$3.77 Southern Petrochemical Complex project and a US$410 million automobile and motorbike manufacturing project are the biggest Thai projects in the field.
Thai investors have 88 wholesale and retail projects with total registered capital of US$268 million in Vietnam, accounting for 3.3 percent of all Thai investment in Vietnam. The US$36 million MM Mega Market Co., Ltd in Ho Chi Minh City is the major retail outlet.
The geographic distance between Thailand and Vietnam is short, and the two countries share cultural similarities. They are both members of ASEAN, providing Thai business with greater advantages than investors from Europe and America, according to the Ministry of Planning and Investment. Vietnam and Thailand also have long-standing diplomatic relations. The two governments have created favorable conditions for bilateral cooperation, signed an investment protection encouragement agreement in 1992 and a dual taxation avoidance agreement, creating a favorable legal framework for bilateral trade and investment.
The Government of Vietnam rates Thai investors highly. According to the Ministry of Planning and Investment, Vietnam encourages Thai businesses to invest in infrastructure, construction material, consumer goods, and the food and automobile industries in Vietnam. The ministry said to attract more Thai investment, Vietnam will stimulate annual promotion programs and open new avenues for Thai investors, for example, attracting Thai investment in specific key projects, organizing regular business delegations to the two countries to survey investment opportunities, and simplifying administrative procedures according to the one-stop policy to enable a quick start of operations after being licensed.
Other investment boosting mechanisms include developing support industries, promoting development of materials for industrial production, strengthening connectivity between Thai investors and Vietnamese partners, and encouraging Thai investment in fields where Thailand is strong and Vietnam has a high development demand, such as agriculture, infrastructure and construction.