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Vietnam among Top 5 foreign investment destinations for Singaporean companies

Released at: 14:05, 31/07/2018

Vietnam among Top 5 foreign investment destinations for Singaporean companies

Photo: khucongnghiep.com.vn

Singapore Business Federation ASEAN Outlook Survey 2017/2018 reveals expansion intentions of Singaporean enterprises.

by Linh San

The Singapore Business Federation ASEAN Outlook Survey 2017/2018 reveals that 77 per cent of companies have plans to expand their businesses beyond Singapore in the next two years. Among those, 52 per cent rate Vietnam in third place among the most attractive destinations to expand to.

As Singapore assumes the role of Chair of ASEAN in 2018, the Singapore Business Federation (SBF), in partnership with HSBC, commissioned the SBF ASEAN Outlook Survey 2017/2018 to gain deeper insights into Singapore-based companies’ interest in ASEAN.

The objective of the survey was to explore how Singaporean companies are venturing into ASEAN and to determine how both SBF and HSBC can support businesses to navigate new markets and capture growth opportunities.

Some 1,036 companies responded to the survey, conducted from last December to March and released on July 30. Seventy-seven per cent of companies indicated they are planning to expand in 2018-2019. “Of these, 77 per cent identified ASEAN as the target region, followed by China (22 per cent) and South Asia (15 per cent),” said Mr. Ho Meng Kit, CEO of SBF. “Within ASEAN, Indonesia and Malaysia are the priority markets to enter in 2018-2020, followed by Vietnam, Thailand and Myanmar. The bulk of companies expressing interest in expanding into ASEAN are from the wholesale and retail, manufacturing, financial and insurance, information and communications, and construction sectors.”

In Indonesia, Vietnam, Thailand and Myanmar, favorable and transparent foreign investment regulations rank among the Top 5 attractive attributes. The availability of skilled labor is also the top attribute in Malaysia. Singapore, Malaysia and Thailand score the highest in the level of digital infrastructure within ASEAN.

More than 80 per cent of respondents cited growth potential and ease of access to new markets as the top motivations for expanding into ASEAN. Customer proximity, cost efficiency and productivity, as well as brand development are complementary factors driving their internationalization interest.

Notwithstanding their interest, companies are also concerned about the uncertain economic and political conditions, difficulty in hiring Singaporeans for overseas jobs, lack of knowledge on market opportunities and customer requirements, difficulty in sourcing local operational support, and difficulty in getting permits and licenses as potential barriers to their internationalization plans.

Seven out of ten companies perceive that ASEAN Economic Community (AEC) integration will bring opportunities. Despite the general positive sentiment towards AEC, two in five companies feel they are inadequately informed. It is promising to note that the ASEAN economy is projected to grow by 6.2 per cent in 2018, compared with global GDP growth of 3.7 per cent.

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