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South Korea’s foreign direct investment (FDI) into Vietnam in Jan-May drops by 51% year-on-year, show the figures of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.
Speaking at a dialogue with South Korean enterprises on Wednesday, FIA director Do Nhat Hoang said South Korea is currently the second biggest investor in Vietnam. Still, with 58 fresh projects worth US$220 million, the total newly-registered and additional capital of South Korean investors in the first five months only reached US$255 million, or a year-on-year decline of over 51%.
In Jan-May last year, South Korean registered and supplemented a total of US$522.89 million, accounting for 11.2% of the total FDI committed in Vietnam.
Kim Jai Woo, chairman of the Korean Chamber of Commerce in HCMC (KoCham), said due to the global economic woes, South Korea’s investment worldwide is on the downtrend. As such, South Korean investors in the property market are also struggling, Kim told the Daily on the sidelines of the dialogue.
However, he stated when the global economy prospers, South Korean firms will gradually raise their investment capital into Vietnam, which is considered as an attractive destination.
So far, more than 3,000 projects of South Korean enterprises have got investment certificates in Vietnam, with a total investment capital of US$24 billion, only after Japan. South Korean investors focus on processing and manufacturing industries, accounting for 47%, real estate, 28%, and construction, 9%.
Most of the South Korean investment capital is poured into Hanoi, HCMC, Ba Ria-Vung Tau and Dong Nai.
In the first five months of 2012, the newly-registered foreign direct investment (FDI) capital in Vietnam totaled US$5.32 billion. Despite a drop in registered capital, disbursed capital is still stable, at US$4.5 billion in Jan-May.
At the dialogue on Wednesday, South Korean companies said they are under pressure of competition with imported products, indicating taxes as the major cause.
The representative of a South Korean business, whose company in Vietnam is importing industrial oil to process, complained taxes on imported materials and finished products are the same (5%). Therefore, he no longer finds Vietnam as an attractive market for investment.
Meanwhile, the representative of an enterprise specializing in supplying materials for plant protection drug production said his company is in a harsh competition with imported goods, whose tax rate has been cut to 0% from 5%.
The dialogue with South Korean enterprises in Vietnam was organized by KoCham, the Korean Chamber of Commerce and Industry in HCMC (KCCI) and the Ministry of Planning and Investment.
The Saigon Times Daily
Post date: 2012-06-07 21:20:19
Post date GMT: 2012-06-07 14:20:19
Post modified date: 2012-06-08 01:52:25
Post modified date GMT: 2012-06-07 18:52:25
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