Vietnam expects to draw US$1 billion in foreign direct investment (FDI) from Japan this year, according to the Ministry of Planning and Investment (MPI). Japan is ranked as third on the list of investors in Viet Nam with 606 projects and a total registered capital of more than US$6.4bn. Japan has the largest disbursed capital, totalling US$4.7bn, in Vietnam.
Since Viet Nam and Japan launched a joint initiative three years ago to improve the business environment and competitiveness of Viet Nam’s economy, Japan’s foreign direct investment has increased substantially, the ministry said. The ministry’s senior investment consulting expert, Kyoshiro Ichikawa, said Vietnam was working on a strategy to expand and restructure investment regions for Japan, resulting in Japanese groups pumping capital into the Vietnamese economy.
Vietnamese investment benefits from the country’s competitive salaries. The average monthly salary for engineers in Hanoi is between US$182 and US$327, and between US$312 and US$329 for engineers in HCM City, while engineers from Shanghai and Bangkok earn an average of US$400 per month.
Corporate income tax is 28 per cent a year in Viet Nam, lower than China’s rate of 33 per cent and Thailand’s rate of 30 per cent. However, Japanese investors and investors from other countries and territories must still carefully consider investment in Vietnam, said Kyoshiro. To further develop Vietnam’s business environment, Kyoshiro said authorities should develop the nation’s infrastructure, including its electricity supply, road networks and seaports facilities.