Intention to expand business remains strong among Japanese firms in Vietnam: JETRO
Intention to expand business remains strong among Japanese firms in Vietnam: JETRO
Many Japanese firms active in Vietnam expect to expand their business in the country, Takimoto Koji, chief representative of the Japan External Trade Organization (JETRO) in HCMC, told a press briefing held in the city today, March 4.
Addressing the meeting to announce JETRO’s 2018 Survey on Business Conditions of Japanese Companies in Asia and Oceania, the JETRO HCMC representative noted that nearly 70% of respondents aimed to expand their business in Vietnam, which is the highest proportion among the 20 surveyed countries and territories.
The intention to expand the business in Vietnam among Japanese firms remains relatively strong compared with that in other countries, remarked the JETRO chief representative. He added that both newly founded firms and those established prior to 2010 wanted to expand operations, which means Vietnam continues to be an important investment destination for Japanese businesses.
Vietnam boasts great potential for growth and Japanese firms have made increasing profits in the local market. Up to 64.9% of them have mulled expansion plans in Vietnam given their growing revenues, alongside the country’s social and political stability and low labor costs.
Moreover, the survey shows that many Japanese firms were profitable last year, whose number is a 0.2 percentage point increase versus the 2017 figure and stood fourth among the 20 surveyed countries and regions, preceded by the Philippines, mainland China and Malaysia.
Regarding the operating profit forecast for the year, 58.7% of respondents expected their profits to improve, showing that many firms had maintained good operations.
However, many operational Japanese firms in Vietnam were still unsatisfied with the country’s incomplete legal system, Kitagawa Hironobu, chief representative of JETRO Hanoi, told a press briefing held on the same day.
The JETRO Hanoi representative stated that 48.2% of respondents had complained about the incompleteness and unclear operations of the local legal system, rising 1.3 percentage points compared with 2017.
Also, Japanese firms active in the country faced many obstacles with personal income tax, and there are no specific policies for developing the automobile sector. Meanwhile, 50% of respondents claimed they had faced difficulties when increasing wages for employees and purchasing materials and accessories from the local market.
Besides this, four main obstacles usually faced by Japanese firms active in the country have been considerably removed; they are labor costs, taxation, administrative procedures and high employee turnover.
In response to feedback from the Japanese firms on the incomplete legal system, Vu Dai Thang, deputy minister of planning and investment, pointed out that Investment and Enterprise laws will be amended and sent to the National Assembly for approval in late 2019.
The survey was conducted from October 9 to November 9 last year at over 13,400 Japanese firms operating in 20 countries and territories. In Vietnam, more than 1,500 Japanese businesses took part in the survey, with 787 valid answers.
