South Korea has been Vietnam’s largest investor over recent times, with total capital of $80 billion in the more than 30 years since the two countries established diplomatic ties in 1992.

South Korean businesses began to invest in Vietnam in 1990 and quickly became one of the country’s biggest investors. As of 2008, there were 2,114 South Korean businesses in Vietnam with total capital of over $18.9 billion.

After the two countries established a strategic partnership in 2012, investment from South Korea jumped significantly.

In 2013, total capital reached $3.8 billion and nearly doubled to $6.1 billion a year later. Investment then increased rapidly over the years, reaching $7.4 billion in 2021.

With the upgrade of bilateral relations to a comprehensive strategic partnership in 2022, investment cooperation between the two countries is expected to enter a new period, with a boom in projects developing supply chains and high technology.

South Korean projects were often of small and medium-scale but a number of large-scale projects have come recently, including projects from Samsung in northern Bac Ninh and Thai Nguyen provinces and Ho Chi Minh City, and from the LG Group in northern Hai Phong city.

Vietnam has become a global production base for many leading South Korean corporations.

South Korean businesses previous invested in Vietnam’s garment and textile industry but have now moved into other fields such as high technology, construction, real estate, retail, hotels, insurance, and manufacturing and processing. As of 2022, FDI from the country in manufacturing and processing accounted for the highest rate of the total, at around 86 per cent.

A report from the Association of Korean Enterprises in Vietnam noted that Vietnam’s business and investment environment remains stable, its laws have been tightened, and there are many preferential policies in place for foreign investors.

In order to continue attracting investment from South Korea, Vietnam needs to change its policies in line with actual investment circumstances and continue improving its business and investment environment, according to the report.