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66 percent Japanese enterprises will expand business in Vietnam

Fri, 13 Feb 2015. Last updated Tue, 03 Apr 2018 16:07

According to the survey on production and business activities of Japanese enterprises in Vietnam carried by Japan External Trade Organization (JETRO), approximately 66% Japanese enterprises still tends to expand business in Vietnam.

On February 12th in Hanoi, Japan External Trade Organization (JETRO) published the statistics about the condition of production and business activities of Japanese enterprises in Vietnam. Basing on this statistics, in 2014, 62.3% Japanese firms operating in Vietnam generated profits. This was a positive number of Japanese firms comparing to the number of 59.9% in 2013. According to JETRO, the profit generated by Japanese firms in Vietnam is lower than in other Asian countries such as Philippines (71.2%), Thailand (66.9%), and Malaysia (66.4%) but higher than Indonesia (60.9%) and China (60.7%). Enterprises gaining the highest profits are export outsourcing companies. About 70% of them generated profits. Meanwhile, there was only 56% non-outsourcing companies gaining profits.

BIDV - Shinkin Central Bank Workshop to promote Japanese investment in Vietnam

Speaking at the press conference, Atsusuke Kawada, Representative of Japan External Trade Organization (JETRO) Hanoi, announced that 66% in the total of 458 Japanese firms planned to expand the business in Vietnam. Vietnam is still considered as an important investment destination of Japanese enterprises. 80% of them said that the reason for expanding the business was to increase revenue. On the other hand, for non-manufacturing businesses, 70% enterprises stated that running business in Vietnam could bring them the high growth. Assessing the advantages of Vietnam investment environment, Mr. Atsusuke said that Vietnam occupied the fourth position in 15 countries having the cheap labor. More than half of the enterprises highly appreciated Vietnam stable political and social situation.  Nonetheless, 60% Japanese enterprises confirmed that the incomplete legal system in Vietnam made the country raking the third position in 15 countries on the level of risk. On the other hand, a half of them mentioned about other problems such as increased labor costs, inexplicit policies, tax regime, customs procedures, and complicated administrative procedures.

Vietnam - Japan Business Forum

According to Mr. Atsusuke, to enhance the cost competitiveness, the increase of localization proportion is quite essential. This requires to support not only foreign businesses but also Vietnam auxiliary industries. Japan is now one of the leading investors in Vietnam. According to statistics of the Foreign Investment Bureau, there are 2,477 Japanese valid projects in Vietnam with the total investment capital of 36.89 billion USD, raking the second in 101 countries and territories investing in Vietnam. Currently, the average capital of an Japanese FDI project in Vietnam is 14.89 million USD, which is higher than the average number of 14.32 million USD/ 1 project by other countries’ investors.

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