Japanese FDI in Vietnam will increase by 2025?

In January 2025, Japanese investors invested nearly 600 million USD in FDI capital in Vietnam, ranking 3rd out of 55 countries investing in Vietnam.

Japanese FDI increased sharply in January 2025

According to data from the Foreign Investment Agency (Ministry of Planning and Investment), in January 2025, the total newly registered foreign direct investment (FDI), increased registered capital, contributed capital, and share purchases by foreign investors in Vietnam reached 4.33 billion USD, an increase of 48.6% over the same period in 2024.

Vietnam continues to be an attractive investment destination in 2025. Illustration photo

Of which, Japanese investors invested 599.09 million USD in Vietnam, this is the total investment capital of 21 newly registered projects, with a total registered capital of 52.12 million USD; 13 projects registered for capital adjustment, with an additional capital of 529.68 million USD and 14 capital contribution and share purchase transactions with a total registered capital of 17.30 million USD.

Investment results FDI Japan's investment in Vietnam in January 2025 had a remarkable growth compared to the same period in 2024 with an increase of 665% (in the same period in 2024, Japanese enterprises invested in Vietnam 78.32 million USD). In particular, with a total investment capital in Vietnam reaching nearly 600 million USD in January 2025, Japan ranked 3rd out of 55 countries and territories with investment projects in Vietnam in the first month of 2025, after Korea with over 1.254 billion USD and Singapore with 1.244 billion USD.

According to data from the Ministry of Planning and Investment, up to now, Japanese investors have invested in 5,512 FDI projects in Vietnam, with a total registered capital of 78.28 billion USD. Japan also ranks 3rd out of 149 countries and territories investing in Vietnam, after South Korea with over 92 billion USD and Singapore with over 84 billion USD.

Statistics show that FDI of Japan in Vietnam are concentrated in many fields, including: Processing and manufacturing industry; energy; trade - services; education; real estate... in which the processing and manufacturing industry still dominates with the appearance of many large corporations such as Honda, Toyota, Canon, Yamaha,... Japanese enterprises investing in Vietnam operate effectively and contribute positively to the economic and social growth in Vietnam.

Foreign investors continue to have confidence in Vietnam's investment environment. Illustrative photo

Opportunities to attract Japanese FDI

According to the results of the "Survey on the current situation of Japanese enterprises investing abroad in 2024" recently announced by the Japan External Trade Organization (JETRO) in Hanoi, up to 56.1% of Japanese enterprises in Vietnam want to expand their business in the next 1-2 years, ranking first in the ASEAN region. It is known that this survey was conducted by JETRO through a questionnaire on the operating situation of Japanese enterprises investing in 20 countries and territories in Asia and Oceania. Of the 5,007 enterprises that responded validly, there were 863 Japanese enterprises investing in Vietnam, the most among countries and territories in Asia and Oceania.

Regarding the outlook for business profits in 2025, compared to (expected) 2024, 50.4% of businesses forecast an “improvement”. Many businesses continue to expect positive business results following 2024. The reason for the improvement in business profits in 2024 of the manufacturing industry is mainly due to “increased demand in export markets and domestic markets”.

Mr. Takeo Nakajima - former Chief Representative of JETRO Hanoi once commented: Vietnam is the second priority country for Japanese enterprises to expand production and business after the US. Vietnam is one of the most competitive investment destinations in the Asian region today. The reason is because Vietnam is a developing country, with political stability and development potential.

According to Mr. Takeo Nakajima, there are two important factors for businesses to choose when deciding to invest, which are business opportunities and economic growth. High-quality businesses have additional advantages in infrastructure and investment priorities and incentives. Of which, business opportunities are still considered the most important factor.

In particular, Japanese FDI enterprises in particular and FDI enterprises in general have high demands for human resources, infrastructure, tax cuts, administrative procedure cuts... As long as these requirements are met, Vietnam will be the destination of FDI enterprises, including FDI enterprises from Japan.

Although Japanese enterprises still highly appreciate the investment environment in Vietnam, according to Minister of Planning and Investment Nguyen Chi Dung, according to a survey by JETRO in 2024, Japanese enterprises assessed that Vietnam's administrative procedures related to fire prevention and fighting, environmental protection, and changes in investment certificates are still complicated. The legal system is not yet complete and the implementation of some procedures related to product imports, business licenses, and taxes still lacks transparency.

To overcome these shortcomings, in the report on the Supplementary Project on Socio-Economic Development in 2025 with a growth target of 8% or more submitted by the Government to the National Assembly recently, it was requested that ministries, branches and localities focus on reforming administrative procedures, improving the investment and business environment, creating all conditions to quickly resolve investment procedures and difficulties and obstacles in investment and business activities.

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