HA NOI — Investment from South Korea, Viet Nam's second largest source, declined by 51 per cent in the first five months of the year due to the world economic downturn, a Viet Nam Korea dialogue heard on Wednesday.
|Workers produce underground cables at the South Korean LS-Vina Cable Joint Stock Co in the port city of Hai Phong. — VNA/VNS Photo Hong Ky
According to the Ministry of Planning and Investment (MPI), as many as 58 projects from Korean investors were registered in the period with total investment capital of US$220 million.
In addition, with $35 million raised by existing projects, the total investment of Korean businesses in Viet Nam in the first five months of 2012 came to $255 million, down 51 per cent per cent year on year.
Korean investors in the same period of 2011 pumped a combined $522 million into Viet Nam, accounting for 11.2 per cent of total FDI in this time.
Head of the Korean Department of Economic Relations Kim Chang Kyu said the workshop aims to give Korean investors a chance to meet with local authorities and voice their concerns about difficulties they have encountered in doing businesses in Viet Nam.
Kyu said Viet Nam and Korea should strengthen their bilateral relations as businesses are considering the country as one of the favoured investment destinations in the coming time, especially in high tech and supporting industries.
According to Kyu, Viet Nam is also considered as one of the most attractive countries in Asia in terms of production and manufacturing.
Most questions raised at the workshop, organised by the Korean Chamber of Commerce (Kocham), related to taxes preferential for foreign investors, tax exemptions and personal income taxes.
Korean investors were also concerned about the declining import tax of some complete built products that compete with those made in Viet Nam by Korean producers.
Representatives from Viet Nam authorities said they would gather information and reply at the next meeting, scheduled for this July.
Kocham President Kim Jai Woo said Viet Nam should further improve its investment environment, especially in the context of ongoing economic difficulties.
According to the head of MPI's Foreign Investment Agency Do Nhat Hoang, Korean businesses up to now have invested a total of $23.93 billion into 3,020 projects in Viet Nam, ranked second after Japan.
The largest investments have gone to the manufacturing sector at 47 per cent, followed by the real estate sector at 28 per cent, construction at 9 per cent and the rest 6 per cent, to retail, hospitality, logistics and showbiz.
HCM City has the largest amount of Korean projects with 822, followed by Ha Noi with 606, Binh Duong, 460 and Dong Nai, 256.
Most of Korea's largest conglomerates already came to Vietnam such as Samsung, Kumho, Huyndai, Posco, LG and Lotte.
Within two decades, bilateral relations between Viet Nam and Korea have achieved remarkable progress. Trade turnover between the two countries, which reached only $500 million in 1992, increased 26 times to $13.7 billion in 2010 and $18.1 billion in 2011. — VNS