Improving business climate - key to retaining Japanese investors
VOV.VN - Despite boasting a number of advantages in terms of foreign investment attraction, Vietnam needs to continue to improve its business climate if it is to retain Japanese financiers, according to insiders.
Japan invests more than US$74 billion in Vietnam
According to data released by the Ministry of Planning and Investment, as of January, Vietnam had attracted 5,280 foreign direct investment (FDI) projects from Japan with a total registered capital of US$74.2 billion, accounting for 13.4% of the number of projects and 15.7% of total foreign investment capital in the Vietnamese market.
With these results, Japan ranked third out of 144 countries and territories with the largest investment projects in the nation to date.
January alone saw the country attract 13 new FDI projects from Japanese enterprises, ranking second among 39 countries and territories investing in the nation.
Most notably, Japanese FDI capital into the Vietnamese market in January made up 12.6% of the country’s total FDI capital, with the amount of capital witnessing a seven-fold rise compared to that of the same period from last year.
This figure indicates that Japanese financiers have strong confidence in the Vietnamese investment environment.
Sharing his opinion with the press recently, Takeo Nakajima, chief representative of the Hanoi Office of the Japan External Trade Organization (JETRO Hanoi), said Vietnam's business climate demonstrates bright prospects ahead for future economic growth, noting that Vietnam remains one of the most attractive markets for many Japanese parent companies.
The JETRO representative stated that there are currently more than 2,000 Japanese firms doing business in Vietnam, which makes up the largest proportion among ASEAN member states.
Japanese business representatives assess that the local business environment boasts many comparative advantages, including socio-political stability, abundant and qualified human resources, a significant market size, and potential for further market growth.
At a recent online meeting held with the People's Committee of Thai Binh province , Japan’s Kyushu Promotion Center said that several Japanese companies in the Kyushu region, namely Kamichiku Group, Medmain Joint Stock Company, and Nichibe Shokai Joint Stock Company are keen to seek co-operation opportunities in Thai Binh province.
Making Vietnam more lucrative to Japanese investors
Tadahiro Kinoshita, chairman of the Japan Chamber of Commerce and Industry in Vietnam (JCCI), pointed out several factors which make Vietnam attractive to Japanese investors, including an improved business climate, the active participation of free trade agreements, and advantages in terms of young talent, especially in the digital field.
Furthermore, Vietnam's political stability is an important factor for foreign investors' sustainable business operations.
A recent survey conducted by JETRO indicates that although the Vietnamese investment environment is considered to be attractive to Japanese firms, the number of Japanese businesses operating in Vietnam which made a profit last year stood at 54.3%, representing 6.6 points lower than the ASEAN average level.
This is attributable to a decrease in domestic and foreign demand, a rise in labour cost and raw material procurement costs, as well as fierce competition with other regional peers.
To create an advantage in attracting FDI moving forward, Minister of Planning and Investment Nguyen Chi Dung emphasized that top priority should be given to further improve the local investment environment.
In line with this, Vietnam will continue to make amendments to policies of FDI attraction in accordance with global investment trends, with a specific focus on industries that can contribute to the green economy, energy transition, and digital transformation, as well as reforming administrative procedures moving forward.
