VietNamNet Bridge – Japan and South Korea are the two biggest foreign direct investors in Vietnam. However, they have been following the different ways to develop investment projects and do business in Vietnam.


A Japanese invested supermarket in HCM City.


Experts have noted that while both Japan and South Korea eye Vietnam as the ideal investment destinations, they target different business fields in the market.

In the past, Japanese investors jumped into the assembling and manufacturing sectors. But nowadays, they more focus on the projects in the fields of finance and banking, retail and service.

Meanwhile, South Korea now pours money into big manufacturing projects after a period of focusing on developing small scale trade projects. The Samsung’s projects worth $2.5 billion are the typical example.

Following two ways to approach Vietnamese market

A high ranking official of the Ministry of Planning and Investment (MPI) noted that Japanese investors always think carefully before making decision.

“Japanese are meticulous. They even think about a bypass for the workers in Thang Long Industrial Zone to help them cross the road easily, or about the overloading of buses,” the official said.

“Japanese believe that only the fundamental improvement, from the legal framework to infrastructure and the education system, will be the right way for Vietnam to develop, which would also bring benefits to Japanese as well,” he noted.

This could be one of the reasons why Japan continues providing ODA (official development assistance) to Vietnam over the last many years, which has been mostly used to develop infrastructure projects.

Japanese keep following the way in the cooperation with Vietnam. In late July 2013, the fifth stage of the Vietnam – Japan Joint Initiative was kicked off. Thirteen categories of issues relating to the policies, tax, customs, intellectual property, infrastructure development… would be put into discussions from now to 2014.

Meanwhile, South Korean investors are believed to be “more practical”. Instead of making every effort to give advices to Vietnam to help improve the policies, they think they can seek the opportunities and make profits in the current conditions.

An expert has commented that South Koreansprove to be very “clever” as they understand the important role of the local authorities in the context of the decentralization mechanism in licensing foreign direct investment (FDI) projects.

Vietnamese once witnessed the race between the South Korean Keangnam and Japanese Riviera for the right to develop a hotel project on the X2 land plot in Hanoi in 2007.

Finally, Keangnam, which promised big investment capital and big support to Hanoi, won the case.

Samsung is another typical example which shows what the South Korean people’s practicality can bring. Since Samsung set up a factory in Bac Ninh province in 2008, the giant has continuously claimed for big investment incentives, which even go beyond the framework stipulated by the state. It maintained that it should be given special privileges as a big investor.

Following the great success with the project in Bac Ninh, Samsung has reached out to Thai Nguyen province, where it has even got bigger incentives.

The story of Samsung negotiating with Vietnamese authorities has become famous. A Samsung’s fellow-countryman – LG, has successfully applied when investing $1.5 billion in the Trang Due Industrial Zone in last September.

Mai Chi