About 66 percent of the 458 Japanese firms based in Vietnam, plan to expand their business during the next one or two years, a recent survey pointed out.

The survey was conducted by the Japan External Trade Organisation (JETRO).

The JETRO survey of Japan-affiliated companies in Asia and Oceania in 2014 showed that 32.4 percent of the enterprises want to maintain their existing level of business, while only 1.3 percent want to scale back their operations.

The most common reason for business expansion is expected sales growth of 85 percent, followed by sizeable growth potential of 45 percent and greater receptivity for high-value added products at 17 percent, the survey said.

It also noted that 51.4 per cent of Japanese firms in Vietnam expected their operating profits to surge in 2014, compared with the year before, while 54.8 per cent hoped their profits in 2015 would surpass those reported in 2014.

When asked to identify the problems or challenges of doing business in Vietnam, most Japanese firms outlined wage increases as the top concern. This was followed by difficulty in procurement of raw material and spare parts, complicated customs' clearance procedures and the challenges involved in ensuring quality control and quality of employees.

Meanwhile, Japanese enterprises in Vietnam also expect simplified customs clearance and they want to avoid double taxation and correct irregular withholding tax rates.

Japanese firms in Vietnam are also seeking mutual duty exemption among Cambodia, Laos, Myanmar and Vietnam, integration of interpretation and management concerning the rules of origin and a reduction in non-tariff barriers, such as license requirements and mandatory standards, as the ASEAN Economic Community is expected to be assembled by the end of this year.

The survey, which was conducted from October 10 to November 14 last year, was intended to understand the business activities of Japan-affiliated companies in Asia and Oceania.

The surveyed firms operate in wide range sectors, including automobiles, machinery, chemical and pharmaceutical, as well as food, textile, retail and transport, ICT and finance.-VNA