The data revealed that nearly 57 per cent of surveyed Japanese firms intend to expand their presence in Vietnam within the next 1-2 years, ranking it second only to Laos in growth interest among Southeast Asian nations.

The survey highlighted that the number of Japanese companies operating in Vietnam surged to 2,000 in 2023, surpassing all other ASEAN countries.

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Approximately 50.4 per cent of Japanese investors anticipate improved business profit expectations for 2024.

JETRO emphasised Japanese firms’ ongoing commitment to enhancing local procurement and anticipated further development in the supporting industry.

However, the survey identified challenges encountered by Japanese businesses in Vietnam, with 42.7 per cent reporting a shortage of skilled human resources.

This scarcity is particularly acute in the non-manufacturing sector (45.2 per cent) and industries such as retail, information and communications, finance, insurance, education, and healthcare (over 60 per cent).

Japanese companies also highlighted investment-related risks, citing prolonged processing times in administrative procedures.

Overall, the survey underscored Vietnam’s significance as an investment destination for Japanese enterprises, driven by its growing economy and conducive business environment.

While optimism prevails regarding profit expectations and commitment to local procurement, addressing challenges like human resource shortages and streamlining administrative procedures will be crucial for sustaining and enhancing Japanese investment in Vietnam’s dynamic market.

Fibre2Fashion News Desk (DR)