Strong Singapore-Vietnam ties can be capitalised on

Which sectors are currently prioritised in trade and investment cooperation between Vietnam and Singapore?

Pham Duy Khuong, managing partner of ASL Law

There are several sectors emerging as top priorities, including the digital economy and digital transformation. Singapore is exceptionally strong in technology, digital infrastructure, and expertise in digital transformation. Vietnam is actively encouraging such a transition and has substantial investment needs in digital infrastructure, e-government, smart cities, e-commerce, fintech, and related areas.

Renewables also hold immense potential. Singapore is deeply committed to green development and possesses advanced technologies and experience in renewable energy and environmental technologies.

Vietnam is experiencing strong growth in offshore wind, solar energy, and green hydrogen, while Singapore has the financial capacity and resources to provide significant support. Cooperation will be centred on clean energy projects, emissions reduction technologies, and the circular economy.

As for innovation, Singapore is a leading innovation hub in the region. Collaboration in this area will encompass investments in Vietnamese startups, tech transfer, experience sharing, and more.

What policies or legal reforms could Vietnam implement to facilitate Singaporean businesses investing in strategic sectors?

Vietnam needs to continue enhancing its investment environment and implement specific policies. Firstly, admin procedure reform should remain a top priority for Vietnam. It is crucial to further simplify, increase the transparency of, and digitise procedures related to investment and business operations.

Secondly, the legal framework needs to be developed to ensure clarity, stability, transparency, strong enforceability, and predictability, especially for these new sectors. Finally, Vietnam should implement targeted investment incentive policies, including preferential tax treatments, land access, and financial support.

What advantages can Singaporean businesses leverage when investing in Vietnam amidst a volatile regional economic climate?

In the context of regional economic volatility, Singaporean companies can capitalise on Vietnam’s inherent strengths. Most prominent is Vietnam’s rapid economic growth coupled with political stability.

Secondly, Vietnam offers a large domestic market, combined with a geographic location at the heart of Southeast Asia. Vietnam’s participation in numerous free trade deals also expands export markets and creates a competitive edge.

Thirdly, Vietnam has an abundant and youthful labour force with increasingly strong skills in technology and manufacturing sectors. At the same time, labour costs in Vietnam are competitive.

What are the key issues that businesses should concern about when expanding investment or business operations in Singapore?

One of the most prominent hurdles is the high cost of operations. Singapore ranks among the most expensive countries globally for both living and conducting business. Vietnamese companies must anticipate substantial expenditures, such as office rentals, labour costs, legal and accounting services, and other operational expenses.

Another equally critical factor is the extremely high level of competition. Singapore is a global economic centre, attracting businesses large and small from all corners of the world. This creates a fiercely competitive environment. Vietnamese companies, particularly smaller ones, must possess truly unique and high-quality products or services, along with a sharp strategy.

Furthermore, legal regulations and standards in Singapore are very stringent. Vietnamese businesses need to dedicate time to thoroughly understand and rigorously comply with Singaporean law, spanning corporate law, labour regulations, taxation, environmental standards, and quality benchmarks.

What are the current legal barriers to two-way trade between Vietnam and Singapore? What measures can both sides take to overcome these barriers?

In the context of the very positive and robustly developing bilateral relationship we currently enjoy, I believe that legal barriers are not a major impediment to two-way trade between Vietnam and Singapore. Both nations are members of ASEAN and regional free trade agreements, which have already established a quite favourable legal framework.

There are several measures that both sides could collaboratively undertake. Firstly, it is necessary to continue to harmonise and simplify regulations. Within the ASEAN framework and bilaterally, both countries can further collaborate to harmonise standards, technical regulations, and simplify customs procedures, quarantine processes, and administrative procedures related to trade and investment.

Secondly, both nations need to further encourage the public availability and transparency of legal regulations, trade and investment policies, and ensure information is readily accessible to businesses.

We must accelerate the digitalisation of procedures. Additionally, it’s necessary to establish effective dispute resolution mechanisms.

Finally, it is critically important to enhance information exchange. Regularly organising forums, seminars, and dialogues between the governments and businesses of both countries to exchange information, listen to business perspectives, and promptly address any legal issues that arise during the course of cooperation is paramount.