Japanese survey acclaims improving business conditions
Japanese survey acclaims improving business conditions
The number of profitable-making Japanese firms in Vietnam in 2016 increased 4 per cent from 2015, contributing to make Vietnam an attractive investment destination in the future.
The Hanoi office of the Japan External Trade Organization (JETRO) today announced the result of the annual survey on the business activities of Japan-affiliated companies in Asia and Oceania, including Vietnam in 2016.
The survey conducted from October to November of 2016 covering nearly 11,000 Japanese firms investing in 20 countries and territories, of which 4,642 produced valid answers. In Vietnam, 1,285 Japanese firms joined the survey, of which 639 gave valid answers.
According to the survey, 62.8 per cent of Japanese firms in Vietnam answered that they made a profit in 2016, up 4 per cent from 2015. Specifically, those in the manufacturing sector, the percentage of export processing enterprise (EPE) and non EPE answered to have a profit was 59 per cent and 62 per cent, respectively.
In comparison to other regional nations, this rate in Vietnam was higher than Thailand (61.9 per cent) and Indonesia (59.8 per cent), but lower than the Philippines (77.5 per cent), and China (64.4 per cent).
The survey also showed that 25.1 per cent of Japanese companies in Vietnam said that they incurred a loss in 2016, up 1.1 per cent from 2015.
Regarding the risks in doing business, many Japanese firms (60 per cent) are still worried about risks in doing business in Vietnam, with increasing labour cost, imperfect legal system and unclear performance, underdeveloped infrastructure (electricity, logistics...), and complicated tax procedures being the top concerns.
According to the survey, compared with 2015, Japanese firms' sentiment about risks in doing business in Vietnam improved much in 2016. In particular, 48.4 per cent included imperfect legal system and unclear performance among the risks, down from 63.3 per cent in 2015. Meanwhile, 38.5 per cent complained about complicated tax procedures, down from 53.9 per cent in 2015.
Remarkably, in terms of favourable business climate conditions, Vietnam ranked fourth among 15 countries in political stabilisation with 63.4 per cent. Over 50 per cent of Japanese firms also highlighted Vietnam's market scale and growth, as well as cheap labour cost.
With increased revenue, and growth prospects, 66 per cent of Japanese firms tend to increase their business operations in Vietnam, up from 63.9 per cent in 2015. This rate was higher than the Philippines (54.4 per cent), Indonesia (51.6 per cent), Thailand (50.1 per cent), Malaysia (44.1 per cent) and China (40.1 per cent).
