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60% of Japanese enterprises profitable in Vietnam

Released at: 15:48, 13/02/2015

60% of Japanese enterprises profitable in Vietnam

JETRO releases report on performance of Japanese countries around the world.

by Tue Lam

According to a report from the Japan External Trade Organization (JETRO) on the production and business activities of Japanese enterprises in 2014 in over 20 countries around the world, 62.3 per cent recorded increasing profits, higher than 2013's 59.9 per cent. Those earning the most profit were mainly export manufacturing companies, at 70 per cent.

The report also showed that with a profitability rate of 60.9 per cent, Vietnam continues to be an important investment destination for Japanese enterprises. Of the 20 countries surveyed, Vietnam ranked in the Top 5 in three favorable criteria: business environment, including stable social and political situations, low labor costs, and convenience for resident staff. It ranked behind some countries in the region, however, in profitability, such as the Philippines with 71.2 per cent, Thailand 66.9 per cent, and China 66.4 per cent.

The survey also noted risks in Vietnam's investment environment. Sixty per cent of enterprises said that the country is third out of 15 countries regarding poor legal systems and non-transparent operations. More than half of all enterprises said that tax procedures and other mechanisms remain complicated, and they must pay non-official fees relating to customs, fire protection, and the environment.

The JETRO survey has been implemented for 28 years. Last year's survey was conducted on 720 Japanese companies operating in Vietnam.

According to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, in 2013 there were 2,103 Japanese projects in Vietnam with total capital of VND741 billion ($34.5 million), including new projects and those adding capital.

Although the number of new Japanese investment projects fell last year, total additional capital increased from VND26 billion ($1.2 million) in 2012 to VND95.6 billion ($4.45 million). Therefore, Japan continued to maintain its leading position among 100 countries and territories directly investing in Vietnam.

  • TAGS
  • Japan
  • FIA

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