As of June 30, 2019 Japan has had 4,190 investment projects in Vietnam with total registered capital of US$57.9 billion, the second largest investor among countries and territories investing in Vietnam according to a report by Ministry of Industry and Trade.
Investment capital from Japan is considered as the main capital flow, a model for the cooperation relationship between Vietnamese enterprises and foreign direct investment (FDI) ones. Lately, during the visit of Prime Minister Nguyen Xuan Phuc to Japan, there were 32 investment certificates and memorandums of understanding between Vietnamese and Japanese firms with total value of up to $8 billion having been signed. By Lac Phong reports on SGGP
Vietnam remains a potential market for Japanese investors
Following the increasing trend of direct investment, GBS – a company incorporation services firm in Vietnam started its support program for Japanese Direct Investors, and this program can streamline investment procedures and help achieve more investment in a variety of industries.
“We have launched a variety of services to meet our Japanese customers’ demands, which will support not only Japanese investors, but also local suppliers, distributors, and end-users across a variety of industries, including food, agriculture, and retail”. said Ms. Sophie Dao, Partner of GBS.
The latest survey conducted by JETRO also showed that Vietnam ranked second among countries that Japanese enterprises choose to expand business in the future. The fact that Japanese investors expand investment in service and trade sectors will become a general trend in the next few years as several major manufacturers of Japan have previously had pumped money into Vietnam. Meanwhile, direct consumer market in Vietnam is extremely attractive to foreign service and trade enterprises.
It is expected that when the EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA) become effective, export of Vietnam to the EU will rise by around 20 percent in 2020 and by 42 percent six years later. However, according to JETRO, the weakness of Vietnamese enterprises is that supporting industry has not been capable of supplying for FDI enterprises. Therefore, in the near future, domestic firms need to collaborate with FDI enterprises to increase localization ratio.