Workers manufacture electronic equipment at Mabuchi Motor Da Nang Ltd. 65.3 per cent of Japanese companies in Vietnam gained operating profits in 2018. (Source: baodanang.vn)Hanoi (VNS/VNA) - About 65.3 percentof Japanese companies in Vietnam gained operating profits in 2018, 0.2percentage points more than in the previous year.
Hironobu Kitagawa, Chief Representative of the JapanTrade Promotion Organisation (JETRO)’s branch in Hanoi, relayed the informationat a meeting with Deputy Minister of Industry and Trade Do Thang Hai in thecity on February 20.
According to the report, 2018 saw strongdevelopment of Japanese firms in both the manufacturing and non-manufacturingsectors.
JETRO representative said the number of Japanesefirms that gained profits in the northern region was higher than in otherregions.
In 2019, besides continuing investment in Hanoiand HCM City, Japanese businesses will expand their investments into otherlocalities.
Kitagawa said 70 percent of Japanese enterprisesin Vietnam have expansion schemes, higher than the rate in other countries.
Vietnam continues to be an investmentdestination for Japanese enterprises because of increases in revenue and highgrowth potential, he said.
Kitagawa emphasised that the localisation rateof Vietnam has been increasing since 2010. In 2018, Vietnam’s localisation ratesurpassed Malaysia’s for the first time. This is encouraging progress but therate still needs to be improved because it is still not high in comparison withChina, Thailand and Indonesia.
Kitagawa also pointed out the risks of theinvestment environment in Vietnam. These include rising labour costs, theincomplete legal system, complicated tax system, administrative procedures andhigh rate of employee retrenchment. He said that while four of these categorieshave been improved since 2017, the legal system has not.
Kitagawa said JETRO is expected topublicise its full 2018 survey on thebusiness conditions of Japanese companies in 20 countries and regions in Asiaand Oceania, including Vietnam, in Hanoi on March 4. It will be reportedon the website of the Ministry of Industry and Trade.
At the meeting, Deputy Minister Hai said theGovernment and the Ministry of Industry and Trade have paid attention to thedevelopment of foreign enterprises in Vietnam, including Japanese businesses.
These business results are an important markerfor the relationship between Vietnam and Japan, which has been developing well,Hai said.
He added that the Government and the ministrywill consult the report while formulating policies and perfecting the legalframework to encourage investment from foreign enterprises.-VNS/VNA
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