Last updated: Wednesday, May 15, 2019


Japan Returns as Top Investor in VN

Posted: Wednesday, August 08, 2018

Japan became Vietnam's biggest foreign direct investor in the first half of 2018 with investments reaching US$6.47 billion, accounting for 31.8 per cent of the total FDI reported for the period.

Total FDI in the first six months of the year jumped 5.7 per cent year-on-year to US$20.33 billion, according to the Foreign Investment Agency on June 27.

Director of the Legal and Compliance Department under the Vietnam Chamber of Commerce and Industry (VCCI) Dau Anh Tuan said despite many incentives in terms of tax and land, FDI investors have lagged behind their domestic counterparts in tax contributions, with the two sectors accounting for 25.28 and 43.82 percent of the total, respectively. So far this year, US$8.37 billion in FDI has been disbursed, up 8.4 percent over the same period last year.

A smart city megaproject in Ha Noi has catapulted Japan back to the top of the list of foreign investors in Vietnam.

The project pushed Japan’s investments in the first half of 2018 to US$6.47 billion, 31.8 per cent of the total FDI reported for the period.

The manufacturing sector has led the field in attracting FDI, accounting for 38.9 per cent of the first half total at US$7.91 billion. Retail stayed far behind at US$1.5 billion, for 7.4 per cent.

The RoK was the top foreign investor in Vietnam from 2014 to 2017 as Samsung Electronics set up massive smartphone production facilities in the north and such conglomerates as LG, CJ and Lotte spent actively.

Meanwhile, Japanese investment declined as efforts by major manufacturers to set up shop here ran their course. But now infrastructure exports are creating a new wave of investments by the Japanese, just as Vietnam is working to lure more private-sector money into infrastructure development amid mounting public debt.

Japanese construction technology is highly regarded in Vietnam, and more infrastructure projects are being undertaken via public-private partnerships. Many are hopeful that Japanese involvement will bring advanced technologies and improved business management.

State-owned Vietnamese companies are gearing up to float their shares on the market soon. Prime Minister Nguyen Xuan Phuc has expressed hopes that Japanese businesses will become strategic investors and help create a new momentum for the reform of state enterprises.


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