Vietnam and Singapore established diplomatic relations on August 1, 1973, but since Vietnam officially joined ASEAN in 1995, bilateral relations have advanced at a high speed. In particular, the two countries signed the Singapore-Vietnam Connectivity Framework Agreement (SVCFA) on 23 January 2006, creating a legal basis and favorable conditions for the two sides to boost bilateral friendly relations and multifaceted cooperation. Six sectors the SVCFA covers include education and training, finance and investments, information technology and telecommunications, commerce and services, and transportation. The Connectivity Ministerial Meetings are now held annually and are co-chaired by Singapore’s Minister of Trade and Industry and Vietnam’s Minister of Planning and Investment. 

Development of Singapore-Vietnam relations since the signing of SVCFA

Since its establishment, the Connectivity Framework has made significant progress in building a favorable climate for Singapore enterprises to invest in Vietnam. Throughout the years, Singapore companies have persistently invested in Vietnam. With over 2,000 valid projects valued at approximately $50 billion, Singapore is currently Vietnam’s largest investor within ASEAN, and the third-largest worldwide, coming in behind Japan and South Korea. 

The nine Vietnam-Singapore Industrial Parks (VSIP), located in Binh Duong, Hai Phong, Bac Ninh, Quang Ngai, Hai Duong, and Nghe An, demonstrate the two nations’ strong economic collaboration. Recognized as one of the leading industrial parks in Vietnam, VSIP is an attractive investment destination for enterprises looking to target both the domestic and export markets in Vietnam. VSIP has drawn over $15 billion in investments over the years, with 880 enterprises employing over 300,000 people, demonstrating the success of the jointly created industrial parks.  

Bilateral ties between the two countries, which are excellent and multi-faceted, were elevated to that of a Strategic Partnership in 2013. Vietnam is Singapore’s sixth-largest trading partner, whereas Singapore is Vietnam’s 12th-largest trading partner. Iron and steel products, grease, leathers, tobaccos, glass goods, seafood, and vegetables are among the commodities that have seen the highest growth in trade. In 2019, bilateral trade between the two neighbors has steadily grown to reach $22.7 billion.

In terms of defense cooperation, Vietnam and Singapore signed a defense cooperation memorandum of understanding in September 2009. Exchange visits between the two nations’ defense ministers, annual defense policy dialogues at the deputy-defense-ministerial level, and meetings of joint working groups have all helped to strengthen bilateral defense relationships. In September 2013, the two sides also announced an agreement on exchanging non-military maritime information and a deal on submarine rescue.

Additionally, Vietnam and Singapore bolster cooperation in human resource development with many technical support and training courses. More than 17,000 Vietnamese officials have attended courses under the Singapore Cooperation Programme in areas such as healthcare, environment, finance and trade, productivity, public administration, and English language training. 

Vietnam’s expectation of the Singapore-Vietnam Connectivity Framework Agreement (SVCFA) in the new decade

Continue promoting the Vietnam – Singapore strategic partnership

On 16  April 2021, Foreign Minister Bui Thanh Son spoke by phone with his Singaporean counterpart Vivian Balakrishnan, and the two made an agreement to strengthen the Vietnam-Singapore partnership. They agreed on a number of concrete steps including increasing all-level mutual visits and meetings through all channels to advance Vietnam-Singapore cooperation in the time ahead while maintaining and effectively putting bilateral cooperation and consultation mechanisms in place.

During a reception for the newly-appointed Singaporean Ambassador to Vietnam Jaya Ratnam on May 26, Deputy Prime Minister Pham Binh Minh expressed his delight at the successful growth of bilateral relations across fields despite the health crisis. The Deputy Prime Minister has proposed that Singapore and Vietnam work closely together and help each other in responding to the COVID-19 pandemic and obtaining safe and efficient vaccinations. To facilitate these growing trade and commercial ties, Vietnam and Singapore discussed how to safely and progressively restore borders for critical business travel.

Besides, he expressed his hope that the 15th Vietnam-Singapore Connectivity Ministerial Meeting will be organized in 2021. In the face of complex developments and growing trade frictions in the region and around the world, the two sides will keep working to enhance the connectivity of the two economies and boost coordination in strategic issues at multilateral forums, especially at ASEAN and the UN to actively contribute to the solidarity and centrality of ASEAN. 

The two officials agreed that the VSIP model is a bright light in economic relationships and that economic cooperation is a crucial pillar of the bilateral relationship between Vietnam and Singapore. Regardless of the Singapore-Vietnam Strategic Partnership, Vietnam expected to increase cooperation in non-economic sectors such as militaries, counter-terrorism, piracy, human trafficking, and money laundering. In addition, the Deputy PM wished that an increasing number of Vietnamese students would pursue their studies in Singapore’s high standard of education, thereby improving the quality of Vietnam’s human resources.

Expand cooperation and increase in investments from Singapore in new sectors 

Deputy Prime Minister Pham Binh Minh stressed the importance of the two sides cooperating to review and promote all-around cooperation within the framework of the Vietnam-Singapore Economic Connectivity Agreement during his discussion with Jaya Ratnam.

Despite the outbreak, Singapore has become Vietnam’s leading investor, which is seen as a significant milestone in the two nations’ relationship. As a result, the Deputy Prime Minister stated the intention of attracting more Foreign Direct Investment in Vietnam from Singaporean enterprises to help the country achieve its socio-economic development goals for 2021 and beyond. 

Vietnam, like many other nations across the world, is beginning to explore the concept of Smart Cities, with Hanoi, Ho Chi Minh City, and Da Nang joining the ASEAN Smart Cities Network. It is anticipated that, with the support of Singapore, Vietnam will make these cities smarter, greener, and more livable, while preserving their rich heritage and culture. Singaporean technology companies are encouraged to invest in the Vietnam market, allowing Singapore to retain its leading investment position in Vietnam, particularly in priority spheres such as infrastructure development, smart cities, information technology, and startups.

The Vietnam-Singapore strategic partnership has seen positive developments and brought fruitful results to both nations over the years. There is no doubt that SVCFA will substantially deepen cooperation and tighten strong ties between Vietnam and Singapore in many areas. Despite any differences and challenges the two nations may have, both sides continue to focus on building a win-win relationship and aiming towards peace and development in the region in the new decade.  

If you are Singaporean investors who need support with setting up a company in Vietnam, please contact Viettonkin consultant team via email or contact page. With our specialized knowledge and experience in helping foreign enterprises’ getting into the Vietnamese business environment, we can provide detailed advice on procedures, stages, and documents required to prepare for the application of a Vietnam business registration certificate.