|Japan is a key investor in Viet Nam.— Photo vnexpress
HA NOI (VNS)— The capital city will hasten reforms in paperwork and create favourable conditions to boost the confidence of Japanese investors and attract further investment.
Mayor of Ha Noi People's Committee Nguyen The Thao on Thursday delivered this message in a meeting with 120 Japanese investors who have run 520 projects worth US$4.6 billion in registered capital.
To this end, the city has set up the Japan Information Desk, which, starting next month, will serve as a common hub between municipal authorities and Japanese investors to promptly solve investment problems.
The decision followed a survey by the Ha Noi Statistics Office that showed the negative sentiment of Japanese investors towards administrative procedures in the city.
About 10 per cent of the 200 Japanese companies that participated in the survey said the process of granting investment or enterprise establishment certificates was troublesome in practice. In addition, 13 per cent pointed to difficulties in approaching land sources, and 18 per cent were not satisfied with current taxation, fees and price administration.
Foreign direct investment (FDI) from Japan accounts for 22 per cent of the total FDI in the city and creates jobs for 130,000 labourers. Japanese enterprises contribute VND2.3 trillion ($109 million) to the city's budget every year, equivalent to 61 per cent of total budget payments from foreign-invested enterprises in the city.
Ha Noi plans to primarily attract more investment from Japan in high-tech projects, industrial projects and the processing industry. High-quality services, including finance, banking, healthcare and human resources, are also seen as potential areas for Japanese investment.
Hideo Okubo, Chairman of Forval Corp, told the meeting that many Japanese small- and medium-sized enterprises in auxiliary industries were heading to Viet Nam to take advantage of cheap labour sources.
He said that a supportive infrastructure, favourable administrative procedures and a skilled labour force would be necessary to attract investment.
In fact, low-cost labour is one of the advantages, with each worker receiving on average $3,000 per year in 2013, one eighth of what Japanese companies pay their employees in Singapore and half what they pay in Thailand. However, it is still a matter of concern that investors find administrative procedures in the city burdensome.
A recent survey conducted by the Japan External Trade Organisation (JETRO) revealed that up to 70 per cent of Japanese businesses plan to expand their operations in the Southeast Asian country.
Japanese businesses currently focus their investment on processing and production on a small and medium scale, but they also have their eye on the high-tech sector.
In Viet Nam, according to statistics released by the Foreign Investment Agency under the Ministry of Planning and Investment, there were 2,103 Japanese-invested projects worth $34.5 billion in 2013.
With the amount of added capital climbing from $1.2 billion in 2012 to $4.5 billion in 2013, Japan has maintained its number one position among 100 countries and territories investing in Viet Nam. — VNS