Viet Nam attracted foreign direct investment (FDI) of US$6.28 billion in the first four months of 2024, the highest in five years. Taiwan is one of the largest contributors, which reinforces the strong economic ties between the two regions.
A Snapshot of Taiwanese Investment in Viet Nam
According to Tran Duy Dong, Deputy Minister of Planning and Investment, of 105 countries and territories, Taiwan has secured its position as the fourth largest investor in Viet Nam. With nearly 3,200 projects and a total registered capital exceeding US$39.5 billion, Taiwan’s investment footprint in Viet Nam is extensive.
Source: Taiwan-Viet Nam Business Forum, 2024
When considering investments made by Taiwanese firms with funds sourced from outside Taiwan, Taiwanese enterprises have invested over NT$600 billion (US$18.6 billion) in Viet Nam, positioning Taiwan as the second largest investor after Korea.
Key Investment Regions
In 2023, Taiwan had investment in 55 of 63 provinces in Viet Nam.
– Ha Tinh was first with 30% of the total investment.
– Binh Duong followed with 16% and Dong Nai had 13%.
– Other significant regions include Ba Ria-Vung Tau, Long An, and Ho Chi Minh City.
Sectors Attracting Taiwanese Capital
These industries highlight the broad spectrum of Taiwanese investment interests in Viet Nam:
– The processing and manufacturing had 80% of Taiwanese registered capital. Following the US-China trade war in 2018, Taiwanese investment shifted from traditional manufacturing towards electronics. For example, Foxconn, Compal, Pegatron, and Wistron specialised in Electronics Contract Manufacturers are establishing and expanding their factories in Viet Nam.
– The construction industry ranks second, followed by the real estate sector.
Rising Taiwanese Foreign Direct Investment
Since 2017, Taiwan’s FDI in Viet Nam has been on a steady rise. This trend reflects Viet Nam’s increasing attractiveness to Taiwanese investors.
Source: Ministry of Planning and Investment, 2023
What Makes Viet Nam Attractive for Taiwanese Investors
Strategic location, robust economic growth, investment incentives, lucrative partnerships, competitive labour are key factors driving their decision.
– Strategic Location: Viet Nam has unique geographical advantages, with land borders with Cambodia, Laos, and China, as well as access to key sea routes.
– Economic Growth: Viet Nam has enjoyed macro-economic stability, controlled inflation, guaranteed major balances, and many areas reaching set targets, making Viet Nam a silver lining in the economic situation. In fact, Viet Nam’s economy saw GDP y-o-y growth at 5.66% and an FDI uptick at 13.4% (as of March 20) in the January-March quarter of 2024, reflecting the strong performance of the economy.
– Incentives: By offering significant tax breaks for qualified investment projects, Viet Nam successfully foster an environment that attracts foreign investment. These incentives can include cooperate income tax rates as low as 5% for up to 37 years, with an initial exemption period of 6 years.
– Partnership: Taiwan-Viet Nam relations have strengthened, driven by initiatives like President Tsai Ing-Wen’s New Southbound Policy (NSP). A 2019 survey by the Taiwan-Asia Exchange Foundation showed that Vietnamese managers view Taiwan and its businesses positively. Taiwan ranked second, after Japan, among the top ten investing countries in Viet Nam, surpassing the United States and China.
– Competitive labour: Viet Nam’s labour costs are lower than many countries, which undoubtedly brings great attraction to companies pursuing cost-effectiveness.
Notable Success Story
Our Industrial Services Expert at Savills are renowned for their extensive experience and proven ability to successfully guide Taiwanese companies in establishing a strong presence in Viet Nam, exemplified by Taiwan’s Great King Group’s entry into northern Viet Nam in December 2023 with a 11,200m² factory in Bao Minh Industrial Park for producing apparel and sleeping bags for global brands. We provided comprehensive support throughout the process, from market entry strategy and site selection to negotiation and project management, ensuring a seamless and efficient establishment for our Taiwanese clients in the Vietnamese market.
Be Part of The Journey
Taiwan’s investment in Viet Nam is more than a financial venture; it’s a journey of mutual growth and shared success. This partnership has set the stage for continued collaboration and economic prosperity. It is high time investors and businesses in Taiwan explored the vibrant opportunities that this partnership offers by joining Savills event “Viet Nam’s Industrial: Unlocking The Future” sponsored by BW Industrial Development and VSIP Group.
Event Detail
Date: 27 June 2024
Time: 01:30 PM – 04:00 PM (GMT+8)
Location: Le Meridien 2F, No. 38, Songren Rd, Xinyi district, Taipei city, Taiwan 110
Join us at our upcoming event on Viet Nam’s industrial services in Taiwan, where industry leaders and experts will share insights and opportunities in this dynamic sector. Don’t miss this chance to network, learn about the latest trends, and discover how Taiwanese businesses leverage industrial services to drive growth and innovation by investing in Viet Nam.
