There are opportunities abound in Vietnam for Singapore companies, Second Minister for Environment and Water Resources and Foreign Affairs, Ms Grace Fu, said in Hanoi on Thursday.

And with the official launch of a strategic partnership between the countries on Wednesday, Singapore is in a good position to tap on growing industries such as manufacturing, financial services and hospitality.

"This is a country with over 90 million population, it has a very young population," said Ms Fu, who is accompanying Prime Minister Lee Hsien Loong on his official visit to Vietnam.

"Labour cost is very low, (they have a) very hardworking population, very eager to learn and with their greater linkages to the world through the various free trade agreements as well as the TPP (Trans-Pacific Partnership) for example, we see this as a great potential for us to tap."

Urging Singapore firms to "pay attention" to Vietnam, Ms Fu noted that the country has had challenges in its fiscal policy, currency management and inflation. But Singapore and its local banks can help Vietnam in these areas.

"We are very happy to share whatever experiences we may have, so that is a good starting point for us to help build a stronger banking system that would be important to the health of the Vietnamese economy," she said. "Of course our banks have been around for some years, they would like to play a greater role and see how we can be helpful to help to promote their position here in Vietnam."

PM Lee will wrap up his three-day visit on Friday when he officiates the groundbreaking of the fifth Vietnam-Singapore Industrial Park in central Vietnam's Quang Ngai province.