JETRO: Japanese firms intend to expand business in Vietnam

Hanoi (VNA) – Over 60 percent of Japanese firms in Vietnam have plans to expand their business, according to Atsusuke Kawada, head of the Hanoi office of the Japan External Trade Organisation (JETRO).

They also continue considering Vietnam an important investment destination, he said at a press briefing announcing the result of a survey on the operation of Japanese companies in Vietnam in Hanoi on February 14.

The survey examined business operation of Japanese companies in Asia and Oceania in 2016. It was carried out in Vietnam in October and November 2016, involving 639 valid respondents.

Over 60 percent of the responding firms said they earned profits from investment in Vietnam (up 4 percentage point from 2015), while 25.1 percent reported loss (up 1.1 percentage points).

Besides, 80 percent said they expanded their business prompted by revenue increases while 63 percent of firms in non-manufacturing industries cited “high growth potential” as reasons for their expansion plans.

Vietnam’s investment environment is being improved, according to many businesses.

However, 58.5 percent of them said the labour cost was increasing, while around 40 percent considered incomplete infrastructure facilities and complicated taxation procedure risks.

Vietnam was ranked fourth among 15 nations with underdeveloped support industry, according to 34.9 percent of the surveyed firms.

Over 60 percent complained about increasing salary for local employees and difficulties in procurement of raw materials and parts locally.

The rate of applying Free Trade Agreement (FTA) and Economic Partnership Agreement (EPA) among Japanese firms in Vietnam reaches 47.2 percent, up 2.2 percentage points from the previous year.-VNA