Korean investors see Vietnam as an attractive investment destination

Mr. Hong Sun, Vice Chairman and General Secretary of the Korea Chamber of Commerce in Vietnam told Hanoitimes about the improvement of Vietnam’s business and investment environment as well as the interest of South Korean investors here in the coming time.

Mr. Hong Sun, Vice Chairman and General Secretary of the Korea Chamber of Commerce in Vietnam. Photo: Nhat Minh

How would you comment on the performance of Vietnam’s business and investment environment amid the Covid-19 pandemic? 

The efforts of the Vietnamese government are not only in a few areas but also in many other fields, especially, the control of the pandemic not only ensure the safety of local people but also of foreign investors in Vietnam. 

In this difficult context, the government has promptly issued preferential policies for domestic enterprises and foreign investors, specifically improving the investment environment through approving three laws on Investment, Enterprises and the Public-Private Partnership (PPP). 

Investors are very assured when investing in the infrastructure sector because previously, investors had to spend much time on applying for approval for project license at many levels. I hope these new laws will help accelerate the procedures settlement.

What are the impacts of Covid-19 on the South Korean enterprises in Vietnam?

Covid-19 has changed a lot of things, especially, leading to the dominance of online conferences which saves time and minimize traveling. Thus, we have also handled a lot of works over video conferences. However, there are many limitations for those who invest for the first time in large-scale infrastructure projects, or in the field of production and real estate who must go directly and regularly to the site to survey. Therefore, the investors face obstacles due to travel restrictions.

Meanwhile, the pandemic also gives South Korean investors the opportunity to boost their new business models in Vietnam. South Korea-invested Okxe, a motorbike selling platform, is an example. The platform helps buyers easily search for and examine used motorbikes and now owns one million users. Previously, no company invests in the used motorcycle app for sale in Vietnam. This startup has cooperated with the local bank to run this model, appraise the quality of the vehicle and set the price. That is a new model in Vietnam.

Or Go2Joy (formerly Appro Mobile), a hotel booking service in Vietnam for young people, has operated for three years and now reached 200,000 users with the system of 1,000 high-standard hotel partners. The hourly booking model has developed in South Korea for years and it is expected to grow in Vietnam. Besides, Gomi, a Ho Chi Minh-based shopping mall platform, provides genuine products imported from South Korea.

We hope that the new business models will grow and  attract more investment in Vietnam in the near future.

What fields do South Korean enterprises intend to invest in Vietnam in the coming time? 

In addition to the fields of manufacturing, real estate, startups, South Korean companies invest more in the financial sector mainly through mergers & acquisitions. A number of state corporations and real estate companies want to invest in infrastructure, especially housing for low-income groups. In South Korea, the social housing projects for this target group has a rather high standard because their income is higher than those in Vietnam. That advantage will help South Korean investors promote the social housing development in Vietnam with higher quality than the currently.

Besides, the number of logistics centers in Vietnam is commensurate to the demand and its transport costs double compared to that of other countries. So we will invest in smart logistics hubs to attract more secondary investors. Along with the centers, we plan to focus on expanding rental factories as many small and medium enterprises investing hundreds of millions of dollars have the need to rent a small area to build a factory without applying for an investment license. 

Vietnam should take advantage of attracting a variety of investment forms and models to get more investors into Vietnam without waiting for a big company like Samsung.

Neighboring areas of Hanoi such as Ha Nam and Hung Yen are capable of attracting investors, especially from South Korea, not only in Bac Ninh province where more than 1,000 South Korean enterprises are doing business here.