Japanese business profits in Vietnam highest after pandemic but still 'afraid' of administrative procedures

After five years, the number of Japanese companies in Vietnam making profits has increased by more than 60%, almost returning to pre-COVID-19 levels. However, traffic jams and cumbersome procedures may reduce Vietnam's attractiveness.

Japanese and Vietnamese businesses at a trade connection session in Ho Chi Minh City - Photo: N.BINH

Previously, the semiconductor industry only invested in Singapore and Malaysia, but now Vietnam is also a new choice for Japanese investors. Many Japanese companies in the industry are eyeing Vietnam, but the question is whether Vietnam can take advantage of this shifting opportunity or not?

Trend of importing raw materials from Japan to Vietnam

Sharing about the investment situation of Japanese enterprises in Vietnam in 2025, Mr. Nobuyuki Matsumoto - Chief Representative of JETRO Office in Ho Chi Minh City - informed the results of the "Survey on the current situation of Japanese enterprises investing abroad in 2024" showing that for the first time in 5 years, the rate of Japanese enterprises expecting to "make a profit" in the Vietnamese market reached more than 64%.

The number of businesses wishing to expand their business in the next 1-2 years is high, ranking first in the Asian region. More than 50% of businesses predict that the situation will improve, while only 9.2% think that the situation will worsen. Many businesses expressed optimism about continuing to achieve positive business results in 2025.

However, according to Mr. Nobuyuki Matsumoto, in 2024, the weakening of the yen led to Japanese businesses tending to import raw materials from Japan to Vietnam to save costs. This trend caused the localization rate of Japanese goods produced in Vietnam to decrease compared to 2023.

The next point is that for the first time in the survey, the question was asked to businesses "in the past five years, has there been a shift in production from Japan or from other countries to Vietnam?".

Results: The number of Japanese enterprises responding that they have shifted has increased significantly, of which, from China to Vietnam there are 90 projects and from Japan there are 106 projects. These are very high numbers, far exceeding the second place country, Thailand.

Another notable factor is that the index "economic, political and social stability in Vietnam" has a lower score than the survey in this category in 2023.

Besides, complicated administrative procedures make businesses spend a lot of time on administrative procedures as well as the legal framework is not yet complete.

These factors make the application of the law in practice lack transparency, and can be understood differently depending on the person handling it. This is a risk and one of the factors that we need to pay attention to in order to improve it in time.

Administrative procedures are complicated and still take a lot of time.

Mr. Nobuyuki Matsumoto also answered questions from Tuoi Tre newspaper about strengths and difficulties that need to be quickly overcome to make Vietnam more attractive to Japanese businesses.

* The US has just entered a new presidential term, we see trade policies creating fluctuations right in the new year. What advantages do Japanese businesses see in Vietnam in the new race?

Mr. Nobuyuki Matsumoto - Chief Representative of JETRO Office in Ho Chi Minh City - Photo: N.BINH

- I think compared to other countries in the ASEAN region, Vietnam has an advantage in human resources.

Compared to the general level of countries like Malaysia or Indonesia, Vietnam's human resources are very good.

In particular, there are many human resources who can speak or write Japanese. This is an attractive point for Japanese enterprises.

However, as I have also mentioned, the point to note is that administrative procedures are complicated and time-consuming.

If we do not take measures, this limitation can eliminate the positive human resource factors mentioned above.

Currently, Vietnam is calling for fighting waste and streamlining the apparatus, I see that Ho Chi Minh City is also actively starting to do these tasks. Hopefully, Vietnam will quickly resolve the problems, so that administrative procedures become more effective.

That will be a strong point to help Japanese businesses boldly choose to invest in Vietnam.

* How do you evaluate the promotion cooperation between the business communities of the two countries?

- Previously, support for the business community of the two countries was mainly from Japan to Vietnam. Now, we also see very successful investments from Vietnam to Japan.

We have some activities to support Vietnamese enterprises investing in Japan, for example, guiding and helping Vietnamese enterprises find free offices for a certain period of time when they first invest...

Or what procedures do businesses that have been doing business in Japan and want to list on the Japanese stock market need to follow...

Metro Line No. 1 has just been put into operation, affirming that building an effective urban transport system is very necessary and important.

Traffic jams are very serious nowadays and have a big impact on the economy. If urban traffic is smoother, we can save a lot of time and avoid waste.

We all hope that new metro lines will be built quickly in the near future.

Mr. Nobuyuki Matsumoto - Chief Representative of JETRO Office in Ho Chi Minh City

Source: https://tuoitre.vn/loi-nhuan-doanh-nghiep-nhat-tai-viet-nam-cao-nhat-sau-dai-dich-nhung-van-ngan-thu-tuc-hanh-chinh-20250202165656066.htm