14:46 | 28/08/2015 Economy
(VEN) - When the ASEAN Economic Community (AEC) is established later this year, Vietnam will become an important business destination in the global supply chain strategy. Vietnam offers a gateway for Japanese businesses to enter ASEAN, said Senior Managing Director at Japan Business Federation of Keidanren, Mukuta Satochi.
Japan is a particularly important partner for Ho Chi Minh City
According to Hirotaka Yasuzumi, Managing Director of the Japan External Trade Organization (JETRO) in Ho Chi Minh City, a recent survey by JETRO showed that 60 percent of Japanese businesses said they would continue to pour investment in Vietnam in the time to come; 24.4 percent would maintain their investment in China and Thailand while at the same time opening new factories in Vietnam. They explained that compared with other ASEAN countries, Vietnam had significant advantages in terms of labor costs, workforce availability and land for industrial investment.
So far, Japan has invested US$37.3 billion in Vietnam and become one of the largest foreign investors in the country. Notably, Japan is a particularly important partner for Ho Chi Minh City. By July 15, 2015, 788 Japanese investment projects were ongoing in the city with total capital of US$2.72 billion.
Japanese Consul General in Ho Chi Minh City Nakajima Satoshi said Japanese businesses would continue investing in Vietnam in the time to come. Currently, the Japanese Business Association of Ho Chi Minh City (JBAH) has 787 member companies. In addition, Ho Chi Minh City has established friendly links with Osaka, Hyogo, Shiga provinces and Yokohama, Osaka cities, and signed a framework agreement on economic cooperation with the Kansai Bureau of Economy, Trade and Industry. Many delegations from Japanese provinces, cities and businesses annually visit Ho Chi Minh City to seek cooperation opportunities.
The attraction of Japanese businesses
Vietnam will benefit from preferential tax rates when a number of trade agreements are approved in the near future. However, the Japanese business community wants the Vietnamese government to improve its legal system to create clear and transparent tax policies. Procedures related to the granting of investment licenses need to be further simplified. The transport infrastructure of provinces and cities must be of equal quality. Worker salaries need to be increased according to roadmaps.
Japanese Consul General Nakajima Satoshi said Japanese businesses expected much from the development of the Vietnamese economy and wanted to invest in Vietnam. In his opinion, the Vietnamese government needs to accelerate improving policies to facilitate Japanese investment in Vietnam in a wider range of fields.
Ho Chi Minh City will create favorable conditions for foreign investors to seek long-term investment business and investment opportunities, especially in the fields of infrastructure development, highly qualified human resources development, support industries, and high-tech agriculture.
Ho Chi Minh City Department of Planning and Investment Deputy Director Le Thi Huynh Mai said the cost of labor, electricity and water in Ho Chi Minh City is two to three times lower compared with big cities in the region such as Manila (the Philippines), and Guangzhou (China).