Japan’s Sumitomo Mitsui Banking Corp. (MSBC) is set to help more of its client companies set up business operations in Vietnam, as they are eyeing Vietnam as a destination beyond China to park their next investment.

A memorandum of understanding to this effect was signed by MSBC and the Ministry of Planning and Investment’s Foreign Investment Agency (FIA) in Hanoi on December 4.

The tie-up allows MSBC and FIA to improve investment performance and facilitation in Vietnam, making it easier for Vietnamese and Japanese firms to reach business deals, head of FIA Do Nhat Hoang said at the signing ceremony.

According to General Director of MSBC branch in Hanoi Noriyuki Watanabe, in recent years, Japanese manufacturers and processors have considered Vietnam a focus of their “China+1” strategy in which they seek to diversify commercial reaches and reduce overreliance on China.

Besides, Japanese retail companies are also seeing great opportunities in the country which has the third largest population in ASEAN.

As of October 20, 2014, Vietnam lured over 36.5 billion USD worth of Japanese investment in 2,434 projects, making Japan the biggest foreign investor in the country. In the first ten months of this year, Japanese enterprises reported 1.66 billion USD in newly-registered and additional capital.

Currently, around 1,000 Japanese firms operating in Vietnam are MSBC clients.-VNA