Vietnam An Attractive Investment Destination for Singapore Companies

June 2024

Singaporean companies are increasingly looking towards Vietnam as a strategic destination amidst shifts in manufacturing, the green transition, and advancements in artificial intelligence (AI). Singapore has significantly bolstered its position as Vietnam’s top investor in recent years. According to the United Nations Conference on Trade and Development UNCTAD, the total foreign direct investment (FDI) in Vietnam surged by 59%, from USD 51 billion (2012-2016) to USD 81 billion (2017-2022). Singapore has led this surge, contributing USD 24 billion between 2021 and 2023, which accounts for 25% of the total FDI inflow into Vietnam.

Singapore’s investment journey has not only continued steadily but also broadened significantly over time. Initially focused on upscale residential projects led by major developers like Keppel Land and CapitaLand, Singapore has since diversified into various sectors including education, energy, food services, food manufacturing, infrastructure, and manufacturing through the efforts of Enterprise Singapore.

Vietnam’s rapidly growing economy presents promising investment opportunities for the island nation. The manufacturing sector is undergoing a shift from China to Vietnam due to rising labor costs in China and persistent trade tensions between the US and China, prompting companies to seek more affordable options. Leading brands like Nike and Adidas have already established extensive manufacturing operations in Vietnam.

Numerous Chinese suppliers and major global electronics companies like Samsung and Apple have established facilities in Vietnam. Recent visits from executives such as Apple’s CEO Tim Cook, who emphasized the company’s growing investment in Vietnamese suppliers, which reached USD 15.84 billion, emphasize this transition.

These developments highlight Vietnam’s ongoing appeal to Singaporean companies. Vietnam’s economy is projected to grow from USD 327 billion in 2022 to USD 760 billion by 2030. Concurrently, Vietnam’s government is enhancing its investment environment through infrastructure upgrades, international relations, and policy reforms, creating advantageous conditions for Singaporean enterprises.

(Source: Singapore Business Review)

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