Vietnam Investment highlights: Amazing Japan

Japan tops investment in Vietnam

According to Foreign Investment Agency (FIA, MPI), there was 1,656 new projects getting license with registered capital of US$ 13.2B as of July 2018. FIA also disclosed that 627 existing projects claimed an increase of capital adjustment of US$ 4.95B in the first seven months of 2018. FII was shown its dramaticlly increase with total accumulated investment of nearly US$ 4.8B.Among both FDI and FII flowing to Vietnam, manufacturing and processing sector maintained the most attractive investment sector, accounted for US$ 9.63B or equivalent to nearly 42 percent of total registered investment capital. Real Estate sector came behind with the registered investment of US$ 5.6B.

Japan goes ahead of Korea to become the largest foreign investor in Vietnam in the first seven month of year 2018. Japan, in fact, maintained its leading position since 2017 as the largest FDI investor in the country. Although Japan's investment inflow to Vietnam increased drammatically in recent years, it still need more efforts to surpass Korea as the largest foreign investor in Vietnam in accumulated.

Looking at the amazing effort of Japan, real estate sector contributed mainly in its success in the year 2018. Sumitomo Corp, a Japanese real estate firm, kicked off a project in the surrounding area of Hanoi with registered investment of US$ 4.1B. In 2017, Japanese firms invested mainly in thermal power sector and gas sector with total registered investment capital of nearly US$ 6.7B.

Foreign indirect investment (FII) was also a crucial element to support Japan keeping its leading position. Japanese companies are now interested in Vietnam's retails sector. Idemitsu and JX Nippon Oil, two largest Japanese Oil and Gas companies, bought shares of Petrolimex Group and PVoil, the 1st and 2nd player in local oil and gas market, respectively. The plan of both Idemitsu and JX is to dominate oil and gas sector by acquiring leading oil and gas players.

In overall, Japanese got briliant success in automotive and motorbike sector in which the market was dominated by Japanese giants such as Toyota, Honda and Yamaha. Their success might motivated other Japanese companies to conduct investment in Vietnam.

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