31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Jul 31, 2022 / 18:04

Vietnam to remove barriers for South Korean businesses

South Korean investors have poured US$79 billion into 19 out of 21 economic sectors in Vietnam.

Vietnam vows to tackle problems for firms from South Korea – the biggest investor in the Southeast Asian country at a dialogue chaired by Prime Minister Pham Minh Chinh.

 Vietnam's Prime Minister Pham Minh Chinh and South Korean investors at the dialogue held in Hanoi on July 30. Photos: Nhat Bac/VGP

Held on July 30, the dialogue covered a wide array of issues with the participation of the South Korean Ambassador to Vietnam Park Noh-wan and representatives of the Korean Chamber of Commerce and Industry (KORCHAM), Korea Trade-Investment Promotion Agency (KOTRA), and big South Korean corporations.

The issues include tax incentives, electricity planning, direct electricity purchase, investment in renewable energy, development of e-mobility industry, pandemic response in the coming time, business license in network security, foreign work permit, human resource training, personnel recruitment, import of used semiconductor equipment, distribution of phonograms and video recordings in Vietnam and restrictions on foreign investment in the cultural industry, environmental impact assessment procedures, and privatization of state-owned enterprises.

Addressing the event, Prime Minister Chinh said Vietnam always makes it easy for South Korean companies and foreign investors in general to do business in the spirit of mutual benefit and risk sharing.

He said the Government of Vietnam attaches special importance to administrative reforms. Meanwhile, he stressed the relevance of a cooperation which is built with sincerity, trust, and effectiveness.

Chinh reiterated the government's current priorities of curbing inflation, stabilizing macroeconomics, and focusing on recovery plans.

Chinh said  Vietnam’s gross domestic product (GDP) expanded 7.72% in the second quarter (Q2) of this year, the highest in the past 11 years, largely contributing to the growth rate of 6.42% in the first half of 2022.

In 2021, Vietnam’s GDP reached an all-time high of US$370 billion in 2021, ranking  4th in Southeast Asia. Its trade turnover hit $670 billion in the same year. So far, Vietnam has signed 15 free trade agreements (FTAs) with more than 60 countries and territories, including the world’s biggest economies.

Vietnam is determined to build an independent and self-reliant economy that’s able to withstand external fluctuations, associated with active international integration, focusing on three strategic breakthroughs in terms of institutions, human resources, and infrastructure.

Earlier in September 2021, PM Chinh also held a dialogue with South Korean investors to help them remove barriers caused by the impact of the Covid-19 pandemic.

Speaking at the dialogue, South Korean Ambassador to Vietnam Park Noh-wan said the Prime Minister’s dialogue in September 2021 gave breath to the businesses that were facing many difficulties due to the pandemic at that time. Since then, they have received practical support in customs clearance, vaccination for workers, reopening of cinemas owned by South Koreans, among others.

So far, 25 out of 29 petitions submitted to the Government at the dialogue have been handled, Park said.

 PM Pham Minh Chinh delivers speech at the event.

South Korea – biggest investor

South Korea is currently leading the foreign direct investment (FDI) in Vietnam, pouring $79.8 billion into more than 9,300 projects in 19 out of 21 economic sectors in 59 cities and provinces nationwide.

The East Asian country is Vietnam’s 3rd largest trade partner after China and the US, with the two-way trade accounting for 11.% of Vietnam’s total trade turnover, at $78 billion.

Big South Korean corporations running business in Vietnam include Samsung, LG, Hyosung, Hanwha, Hyundai, CJ, Lotte, among others. Samsung alone has invested roughly $20 billion in some complexes in northern Vietnam, providing jobs to more than 125,000 people, making up 0.8% of the country’s total workforce. In 2021, Samsung’s earned revenue of approximately $72 billion or 13.6% of Vietnam’s industrial output values.

In the coming time, Vietnam expects South Korea to pour money in hi-tech and innovation with the larger engagement of domestic firms to promote digital and inclusive economy.

“We expect South Korean businesses to strengthen linkages and facilitate Vietnamese enterprises' participation in the production supply chain, contributing to making Vietnam soon become a hub in the regional and global value chains,” PM Chinh said at the event.

He affirmed the view that South Korea is Vietnam’s leading strategic partnership with trade and investment being the key pillars.

Vietnam and South Korea established diplomatic relations in 1992. The three-decade relationship has shown strides towards the Comprehensive Strategic Partnership. 

 Overview of the meeting.