Japan tops foreign investors in first half

10:23 | 17/08/2018 Investment

(VEN) - In the first half of 2018, Vietnam attracted an additional US$20.33 billion in foreign direct investment (FDI), US$6.47 billion or 31.8 percent from Japan, making it the biggest foreign investor in Vietnam in this period, followed by the Republic of Korea (RoK).

japan tops foreign investors in first half

Retail and real estate industries have become top attractions for Japanese investors

Japanese to expand business

Japan, the first G7 member to recognize Vietnam’s market economy (in 2011), currently ranks second among 126 countries and territories investing in Vietnam with 3,725 projects totaling US$50.5 billion in registered capital. Vietnam has become the second choice in the region for Japanese investors, after China.

In 2017, the Bank of Japan (BOJ) announced that Vietnam overtook Malaysia to become the most lucrative foreign market for Japanese companies. BOJ data showed that Japanese FDI in Vietnam yielded total revenues of JPY198.1 billion or US$1.74 billion in 2016, up 70 percent from JPY116.2 billion in 2014. These impressive figures encourage investors from Japan and other countries to invest further Vietnam, and explain why more than 70 percent of Japanese companies have plans to expand their business in Vietnam in the near future.

Vietnam’s economy is expected to grow well in 2018, while the middle class keeps growing and generating increasing market demand. This makes Vietnam more attractive to Japanese investors especially those in the fields of real estate, retail, and high technology.

Improvements needed

Takimoto Koji, Chief Representative of the Japan External Trade Organization (JETRO) Office in Ho Chi Minh City, said a survey by JETRO shows that almost 70 percent of Japanese enterprises in Vietnam intend to expand their business in Vietnam, compared to 63.4 percent in the Philippines, 51.3 percent in Malaysia and only 4.3 percent in China.

However, Vietnam needs to improve its public services, workforce quality and infrastructure to attract more foreign investors, especially those in high technology industries.

Vietnamese enterprises are hoping the state carries out promotion policies for small to medium-sized business, apart from existing foreign investment promotion policies, to strengthen mutual benefit cooperation between them and foreign businesses including Japanese companies. Vietnamese and Japanese investment promotion agencies will strengthen connections to pave the way for businesses from the two countries to meet, exchange information and take advantage of opportunities to increase business cooperation in different areas.

Thanh Thanh