Many Japanese companies  plan to expand to Viet Nam or even move here thanks to cheap labour and an improved investment environment. — File Photo

HCM CITY (Biz Hub) — More than 500 executives from Japanese companies based around the world sought business opportunities in Viet Nam at a conference held in HCM City last weekend.

Viet Nam's membership of ASEAN, the Trans-Pacific Partnership and several free trade agreements has helped the country attract much attention from foreign investors, including the Japanese.

According to the Ministry of Planning and Investment's Foreign Investment Agency, Japan is the second biggest investor in Viet Nam with US$38.7 billion invested by its companies in 2,788 projects.

According to Yasuzumi Hirotaka, director of Japan External Trade Organisation (JETRO) in HCM City, Japanese investment in the city has been increasing in recent years, and this year 6,000 Japanese companies sent representatives to Viet Nam scout for investment opportunities.

Many Japanese companies with operations in China and Thailand – where costs have risen sharply – plan to expand to Viet Nam or even move here thanks to cheap labour and an improved investment environment.

According to a recent JETRO study, Japanese investors are concerned about five issues in Viet Nam – the inadequate legal system and lack of transparency, increasing labour costs, red tape, complicated tax procedure, and poor infrastructure.

But many multinationals expect Viet Nam to become a "factory of the world."

With the investment environment deteriorating in neighbouring countries, Viet Nam is emerging as an ideal investment destination.

But to take full advantage, the Government should speed up administrative reforms and further improve the investment environment. — VNS