Vietnam now South Korea’s 4th largest foreign investment

Vietnam stands at number 4 among South Korea’s overseas investment markets behind the US, Hong Kong and China.

>> FDI flows in Vietnam down 40% to $13.3 billion

>> FDI disbursement tops $8b first nine months

Vietnam now stands at number 4 among South Korea’s overseas investment markets behind the US, Hong Kong and China.

An IT exhibition of South Korean products held in Vietnam

At a Conference on Investment Climate and Business Opportunities in Vietnam on December 21, Sun Seogki, General Director of Korea Trade-Investment Promotion Agency (KOTRA) in Hanoi, announced that South Korean investors pledged a total USD22.5 billion into 2,600 projects in Vietnam as of November this year.

Currently, South Korea is the second biggest foreign investor in Vietnam, just after Taiwan. South Korean projects in Vietnam mostly focus on light industry (garment and textile and footwear), infrastructure construction of industrial parks and real estate.

However, Sun Seogki said, complicated administrative procedures, weak infrastructure systems and undeveloped distribution markets remain big barriers for foreign investors in Vietnam, including those from South Korea.

At the conference, Deputy Minister of Planning and Investment Dang Huy Dong, said South Korea pledged to provide USD411.8 million in official development assitance (ODA) for Vietnam next year at the Consultative Group Meeting held in Hanoi early December, up 39% against 2010.

According to the Vietnamese Ministry of Industry and Trade, South Korea is one of the four most important trade partners of Vietnam along with China, Japan and the US. South Korea is also Vietnam’s fifth biggest exporter and its second biggest importer.

FDI disbursement could reach USD10 billion this year

Deputy Minister of Planning and Investment, Dang Huy Dong, said Vietnam has attracted a total registered foreign direct investment (FDI) of USD18 billion so far this year, adding that FDI disbursement can hit around USD10 billion in the year.

To date, the country has licensed more than 11,900 FDI projects totaling USD191 billion. Vietnam saw a great change in FDI structure within the past 10 years. In 2009, the service sector accounted for up to 77% of the country’s total FDI against a mere 7% in 2001.