More than 55% of Japanese enterprises investing in Vietnam said they will expand their investment in the next one to two years.
The Japan External Trade Organization (JETRO) has announced a survey report with the participation of 4,600 Japanese enterprises operating in nearly 20 Asia-Pacific markets, including 700 enterprises in Vietnam.
The survey results showed that although the economy was severely affected by the 4th outbreak of Covid-19, the percentage of Japanese firms in Vietnam that want to expand their investment was 10 points higher than that of other Southeast Asian countries. Profit in 2021 is estimated to be over 54%, up 4.7 points from the previous year.
In particular, more than 55% of Japanese enterprises said they wanted to expand their production and business activities in Vietnam within the next 1-2 years, while the rate in Indonesia, Malaysia and Thailand were 45.3%, 43.2% and 40.4%, respectively.
According to the Foreign Investment Agency (Ministry of Planning and Investment), Japan has invested in 19 industries and fields in Vietnam, mainly in the processing and manufacturing industry, with more than $42 billion of registered capital. They also invest in real estate, retail, electricity and gas distribution, agriculture, and healthcare.
Regarding indirect investment, a senior global leader in mergers and acquisitions (M&A) services from the Recof Corporation recently commented that Vietnam is still a favorite destination for Japanese investors. M&A transactions of Japanese investments in Vietnam focus on finance, renewable energy, information technology services and food production and distribution.
JETRO’s representative in Ho Chi Minh City said the biggest advantages for Vietnam to be included in the top countries where Japanese businesses expand are market size and growth potential. So far, nearly 40 Japanese firms are on the list of companies receiving support from the Government to diversify their supply chains, including moving their production lines to Vietnam.
The proportion of Japanese enterprises operating in Vietnam forecast to be profitable in business activities last year is 54.3 percent, up 4.7 points compared to 2020.