Singapore firms make beeline for Vietnam: HSBC

Of 1,036 companies polled by the U.K.-based bank, 76 percent said they already have operations in Vietnam. Up to 86 percent of those surveyed were considered small or medium sized enterprises (SMEs) defined as those with annual turnover of S$100million (US$73.4 million) or less than 200 workers.

It places Vietnam fourth among ASEAN member countries in terms of attracting Singaporean businesses behind Malaysia (87 percent), Indonesia (81 percent) and Thailand (80 percent), it said.

As of October last year Singapore companies had invested more than $41 billion in Vietnam, 17 times the 2016 figure of $2.41 billion.

This makes Singapore the third largest investor in Vietnam, behind only Korea and Japan, according to data from the Vietnam Trade Promotion Agency cited in the report.

Besides, 30 percent of the surveyed firms expect to expand further in Vietnam in the next two years.

One of the reasons attracting Singaporean investors to Vietnam is its growing consumer market.

Seventy-five percent of those polled said they appreciate the overall investment climate, while 63 percent said low business costs is one of the enticing factors.

With Vietnam’s manufacturing now moving toward the higher end of the value scale, many corporates might base their treasury and other back-office functions in Singapore, but earn revenues from business operations carried out in Vietnam, Winfield Wong, country head of wholesale banking, HSBC Vietnam, said.