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On February 24, Vietnam President Nguyen Xuan Phuc made the first state visit to Singapore since the start of the COVID-19 pandemic in early 2020.
During the three-day visit, Singapore and Vietnam signed five agreements and several memoranda of understanding (MoUs) on strengthening cooperation in defense, trade, and digital economy, intellectual property, and the social sector.
MoU on trade and digital economy
The highlight for investors was particularly the MoU on trade and digital economy cooperation, which covers areas such as the supporting of regional and global supply chain connectivity and continued trade flows between both countries in times of crisis.
It will also strengthen agri-trade cooperation by supporting information sharing and training on best practices, certification, and standards in the agriculture industry while aiming to foster greater collaboration between Singaporean and Vietnamese SMEs.
In addition, both countries signed an implementation work plan on intellectual property (IP), stemming from a memorandum signed in 2014. The cooperation will include exchanges in IP training and commercialization.
It also mentions the finalization of the proposed launch of a pilot Collaborative Search and Examination (CS&E) program. The program will foster exchanges of best practices between both sides’ intellectual property offices, among other initiatives.
Enforcement of intellectual property rights
For the investors, the program would prove beneficial as it enhances the enforcement of intellectual property rights which has been a major challenge for foreign investors, especially in the high-tech sector.
On the sidelines of the state visit, 29 business MoUs were signed between Vietnam’s provinces and businesses reaching a total registered capital of around US$11 billion. Vietnam and Singapore also reached an agreement on vaccine certificates, paving the way for the safe resurgence of commercial flights between the two countries.
These agreements and MoUs lay the groundwork for the recovery of the two countries’ economies as well as strengthen and open more opportunities for investors from Singapore to invest in Vietnam.
According to the Ministry of Planning and Investment (MPI), Vietnam received US$19.74 billion of foreign investments in 2021. For the past two consecutive years in 2020 and 2021, Singapore has injected the largest amount of FDI into Vietnam. After Singapore was Japan which invested US$3.2 billion, followed by China, Hong Kong, and Taiwan. It’s important to note that several multinational companies invest in Vietnam invest through their Singapore operations. For example, US MNCs such as Intel and P&G, have invested in Vietnam through Singapore.
Foreign direct investment into Vietnam grew 7.2 percent from a year earlier to US$ 2.68 billion in January-February of 2022. Of that, Singapore was the top source of FDI pledges, followed by South Korea and China.
This article was first published by VietnamBriefing which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, India, and Russia. Readers may write to [email protected]