Foreign Direct Investment from CPTPP

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Still familiar investors, but with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) expected to come into effect by the end of 2018 and approved by the National Assembly on November 12th, there will be a greater and more quality flow of capital poured into Vietnam.

Two of the large foreign direct investment (FDI) projects registered to invest in Vietnam since the beginning of the year are owned by investors from 11 CPTPP countries. It is the 4.138 billion USD Smart City project of the joint venture between Sumitomo (Japan) and BRG (Vietnam), or the Laguna project register to increase the investment capital by 1.12 billion USD from Banyan Tree (Singapore).

There are also several projects such as Hanbaram Wind Power Plant (150 million USD), Ramatex Nam Dinh Textile and Apparel Factory (80 million USD) of Singaporean investor,  Ykk Ha Nam Ykk factory project (80 million USD) of Japanese investors…

In fact, without CPTPP, investment capital from Japan, Singapore, Malaysia… still poured into Vietnam. They are the leading investment partners of Vietnam in the last three decades of FDI attraction.

According to data from the Foreign Investment Agency (Ministry of Planning and Investment), accumulated up to now, Japanese investors have invested in Vietnam over 56.2 billion USD, this figure of Singaporean investors is 46.2 billion USD, Malaysia is 12.5 billion USD, Canada is 5 billion USD, Australia is nearly 1.86 billion USD, Brunei is more than 1 billion USD…

Currently, out of 11 CPTPP members, all members have invested in Vietnam, except Peru. In total, the CPTPP members have invested in Vietnam of about 123 billion USD, accounting for nearly 37% of total registered FDI in Vietnam over the last 3 decades. This is not a small figure, indicating that the investment of CPTPP members is very significant for Vietnam’s FDI attraction.

The CPTTP will create favorable conditions for Vietnam to attract investment capital from other member countries, especially those countries that do not have FTA agreements with Vietnam, such as Canada and Mexico. The reason is that, this agreement will promote trade cooperation, in which trade is associated with investment. On the other hand, this is also an opportunity for Vietnamese enterprises, especially large corporations, to seek investment markets in other member countries.

Moreover, once the plans to invite Thailand, Korea and the UK join the CPTPP successfully, the opportunities for trade and investment cooperation in the region will be even greater. That will bring more benefits to Vietnam.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

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