For the first time in five years, the percentage of Japanese businesses expecting profits in the Vietnamese market has exceeded 64 percent, almost equal to pre-COVID-19 levels, according to a survey by the Japan External Trade Organization (JETRO). 

Previously, Japanese semiconductor firms only invested in Singapore and Malaysia.

Many Japanese companies are eyeing Vietnam, but the question is whether Vietnam can capitalize on this shift.

Lately, these enterprises say traffic congestion and cumbersome procedures could diminish Vietnam's attractiveness.

Importing raw materials from Japan to Vietnam

Elaborating on the investment situation of Japanese enterprises in Vietnam in 2025, Nobuyuki Matsumoto, chief representative of JETRO in Ho Chi Minh City, said that the number of the Japanese companies wishing to expand their business in the next one to two years ranks first in Asia. 

Many businesses expressed optimism about continuing to achieve positive business results in 2025, and more than half of the Japanese businesses believed the situation would improve, while only 9.2 percent forecast disappointment.

In 2024, the yen weakened and led Japanese enterprises to import raw materials from Japan to save costs.

This trend has reduced the localization rate of Japanese goods produced in Vietnam compared to 2023, according to Matsumoto.

Japanese enterprises confirmed they have moved production from Japan and other countries to Vietnam over the past five years, including 90 projects originally in China and 106 designated for Japan.

Complex, time-consuming administrative procedures

Compared to other ASEAN countries such as Malaysia or Indonesia, Vietnam has the advantage of human resources, Matsumoto told Tuoi Tre (Youth) newspaper.

The number of laborers who can speak or write Japanese is large, which is attractive to Japanese businesses.

However, administrative procedures are complicated and take a lot of time.

Many businesses said the law enforcement was interpreted differently depending on the person assigned the task.

This is a risk that need minimizing.

Without prompt measures, this limitation may cancel out the advantage of the highly skilled linguistic human resources.

Vietnam is calling for anti-waste and streamlining of the apparatus in major cities.

Matsumoto voiced his hope that Vietnam will quickly resolve these obstacles and provide the confidence Japanese businesses need to boldly invest.

Vietnamese enterprises’ investments in Japan have also been fruitful.

Matsumoto noted that metro line No. 1, which was put into operation in Ho Chi Minh City at the end of 2024, has affirmed the necessity and importance of building efficient urban transport systems.

Traffic congestion is currently serious and has a great impact on Vietnam’s economy.

He expressed hope for future metro lines and believed if urban traffic is smoother, Vietnam will save a lot of time and avoid waste.

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