Up to 70 percent of Japanese businesses have announced that they want to expand operations in Vietnam, especially in manufacturing, trade and service, and retail sector, according to the Japanese External Trade Organisation (JETRO).
Findings of the latest survey conducted by JETRO on investment trend of Japanese firms operating in Vietnam in 2019 show that as many as 65.3 percent of the 787 Japanese companies recorded high profits in Vietnam in 2018.
The majority of these companies said the market scale and growth are the greatest advantages of Vietnam’s investment environment.
Other positive factors include low labour cost, political stability, and improvement of customs and administrative procedures.
Vietnam ranked fourth in political and social stability and cheap labour cost; sixth for market size and growth; and 12th for language barrier in the ASEAN, Southwest Asia and Oceanian regions.
Japanese companies are getting the best out of the advantages from free trade agreements that Vietnam have joined.
According to Takimoto Koji, chief representative of the JETRO Office in Ho Chi Minh City, Japan was the biggest foreign investors in Vietnam in 2018 with 630 projects worth nearly 8 billion USD.
Besides focusing their investment in Hanoi and HCM City, Japanese firms have expanded operation to many adjacent localities.
Speaking at a press conference in HCM City recently, Takimoto said in 2019, the manufacturing industry remains the most attractive field to Japanese businesses.
Each year, the office receives representatives of around 6,000 Japanese firms seeking investment opportunities in Vietnam, with many keen to expand the provision of services.
Some operating in the fields of pharmaceuticals and cosmetics also invest in Vietnam through purchasing stakes in local firms.
With a population of over 90 million people, Vietnam has a large-scale consumption market with high growth potential. Therefore, several Japanese enterprises specialising in production for exports are likely to tap into the market.
Japanese enterprises recommended that Vietnam improve its legal system to attract more foreign investors in the coming time.