To attract Japanese companies to invest in supporting industries and mechanical engineering sector, in addition to offering different good financial incentives, Vietnam should set up some industrial parks exclusively designed for Japanese investors to catch their greater interest,” said Do Nhat Hoang, Director of the Foreign Investment Agency (FIA) of the Ministry of Planning and Investment.

According to a recent survey conducted by the Japanese Nikkei Business Online, approximate 70 percent of Japanese businesses interviewed considered Vietnam the most attractive destination, surpassing Thailand, Indonesia and India (This survey excluded China).

Mr Hideo Naito, Head of Department for Investment Finance of Energy, Water Resource and Infrastructure at the Japan Bank for International Cooperation (JBIC), said Vietnam is attractive to foreign investors on account of young workforce, higher human resource qualifications, risk aversion, and a strong development outlook for the domestic market and capacity to export to third countries.

Meanwhile, Mr K. Osada, President and CEO of Nikkei Business Publication, said: Vietnam has rich potential for economic development given its copious natural resources, convenient transportation, abundant young workforce, opening up investment policies, stable political background amongst others. These elements strengthen the magnetism of Vietnam to Japanese investors. Japanese companies tend to focus their long-term investment on supporting and mechanical engineering industries which promise to bring high added value, offer many jobs for skilled workers and tolerate little impact from objective factors.

Therefore, to successfully lure Japanese companies into local supporting and manufacturing industries, Deputy Minister of Industry and Trade Tran Tuan Anh said Vietnam must ensure standardised space and infrastructure for Japanese investors to do long-term business. Besides, authorities must be quick at resolving difficulties facing them and improving the investment environment.

In addition, to meet investment requirements from Japanese companies, Vietnam also introduces preference mechanisms for them to invest in the country. Mr Hoang said if Japanese companies want to have Japanese-only industrial parks, the Foreign Investment Agency will propose that Vietnamese authorities take their suggestions into consideration. These industrial parks will have all infrastructure works like electricity, water supply and waste treatment systems as expected by Japanese investors.

Regarding the formation of Japanese-only industrial parks, Mr Nishikawa suggested the Ministry of Planning and Investment of Vietnam consider applying single-window mechanism currently applied in Bac Thang Long – Noi Bai Industrial Park, Hanoi. Apart from relatively good infrastructure, the very flexible one-stop shop (OSS) mechanism is a highlight in investment attraction of Bac Thang Long – Noi Bai Industrial Park. Therefore, despite relatively high land rents, many companies, including Japanese, still want to invest here.

In response to requests from Japanese businesses, Mr Hoang affirmed, “With reference to industrial parks exclusively designed for Japanese companies, we guarantee the construction of better infrastructure, including power supply, than Nomura Industrial Park, and the provision of higher service quality than Bac Thang Long – Noi Bai Industrial Park. Hopefully, with these efforts, Vietnam will catch more interest of foreign investors, including Japanese.”