South Korean investors seek clarity on IP lease extensions

South Korean investors seek clarity on IP lease extensions

South Korean investors are urging the Vietnamese government to introduce clearer policies for extending operations in the country’s industrial parks, as many face the imminent expiry of land leases and project terms.

In mid-November, a group of South Korean enterprises submitted documents to the Korean Chamber of Commerce in Vietnam (KoCham), highlighting the difficulties they face in securing extensions for their operations within industrial parks (IPs).

With industrial land leases or project terms approaching expiration, the absence of mechanisms for continued operation could force these companies into difficult decisions, including scaling back or withdrawing from the Vietnamese market. This situation leads to losses for the enterprises from a sustainable development perspective and could weaken confidence in Vietnam’s overall investment environment.

"To address this issue, we respectfully propose that enterprises whose terms have expired be provided with guidance and allocated alternative land within the same or nearby IPs," said Ko Tae Yeon, chairman of KoCham. "We also recommend that a formal mechanism be established to permit contract extensions for enterprises that meet specific conditions, thereby enabling them to continue their operations stably and sustainably,"

“In particular, we suggest that priority for such extensions be granted to enterprises that have contributed to Vietnam's economic development since the early 1990s, as well as those that have demonstrated a strong commitment to long-term investment in the country,” he added

In the first 10 months of 2025, South Korea was one of the top foreign investors in Vietnam with $627 million, accounting for 4.5 per cent of the total.

Vietnam is host to several major technology giants from South Korea, including Samsung and LG. Samsung Electronics had invested $23.2 billion in Vietnam by mid-February this year, making it the largest foreign investor in the country. The number of Vietnamese vendors in the Samsung Vietnam ecosystem has reached 306.

LG's key plants in Vietnam, namely LG Innotek Vietnam Haiphong, LG Electronics Vietnam Haiphong, and LG Display Vietnam Haiphong, recorded a total revenue of 10.3 billion in 2024, up over 9.6 per cent on-year.

VIR