Prime Minister: 'We will create favorable conditions for Japanese enterprises to do long-term business in Vietnam'

The Prime Minister said he will study and adjust policies accordingly to promote Japanese enterprises to invest in Vietnam.

During his official visit to Japan and his attendance at the 23rd Asia Future Conference, on the morning of June 6, local time, in Tokyo, Japan, Prime Minister Nguyen Xuan Phuc had a working session with nearly 60 Japanese enterprises in the field of information technology and some other fields. Also attending the meeting was Politburo member and Head of the Central Economic Commission Nguyen Van Binh.

Prime Minister Nguyen Xuan Phuc directly answered questions raised by Japanese businesses.

In his opening remarks at the meeting, welcoming Japanese business leaders who have shown interest in Vietnam, the Prime Minister informed Japanese IT investors about an attractive business investment market in Vietnam. In May, Moody's credit rating agency raised Vietnam's credit rating from "stable" to "positive".

Emphasizing the attractiveness of the investment environment in Vietnam, the Prime Minister said that according to a report by the Japan External Trade Organization (JETRO), 90% of Japanese enterprises believe that expanding their business in Vietnam will help them increase their revenue; 66.6% of Japanese enterprises investing in Vietnam are planning to expand their business and continue to consider Vietnam an important investment destination.

In the context of the ongoing fourth industrial revolution, the Prime Minister said that Vietnam is gradually shifting its economic growth momentum to high value-added industries, using advanced technology and high-quality labor. Vietnam has advantages and development potential in many areas, especially agriculture, information technology, tourism and human resource training and development.

Information technology in Vietnam is developing explosively and gradually making many sectors and areas of socio-economic life smarter. In 2015, Vietnam was in the top 10 of the Asia-Pacific region, and the top 30 of the world in software outsourcing.

Vietnam is a global smartphone manufacturing center; ranking first in the mobile application economic index among the six most developed countries in the ASEAN region. Vietnam prioritizes investment in information infrastructure, digital connections, building national databases, ensuring information security, developing human resources for the digital technology industry, etc.

Vietnam needs 1 million IT workers and currently has only 700,000 people, so it will continue to train in the coming time to have 300,000 more people.

Prime Minister talks with Japanese business representatives.

The Prime Minister called on and hoped that Japanese investors would invest in economic sectors, especially high-tech, environmentally friendly, and human development projects, with priority given to developing six industries: electronics, agricultural machinery, agricultural, forestry, and fishery processing, shipbuilding, environment and energy saving, and automobile and auto parts manufacturing.

The Prime Minister also said that travel between the two countries is very convenient. Vietnamese airlines such as Vietnam Airlines, Vietjet Air and Japan's ANA have organized 70 flights a week. This is a favorable condition to promote cooperation between businesses.

Welcoming Japanese investors to participate in APEC 2017 activities held in Vietnam this November, the Prime Minister said that one of APEC's priorities is to enhance competitiveness in the digital age and technological innovation, and human resource training and development are the leading important growth drivers.

Speaking at the meeting, Mr. Tsugio Mituoka, representative of IHI Group, said that the Group has invested in Vietnam's infrastructure sector such as building Nhat Tan Bridge, developing coal-fired thermal power to limit CO2 emissions, launching satellites, improving traffic conditions... The Group wants to cooperate with Vietnam in the field of human resource training in the coming time and participate in investment projects in the form of public-private partnership (PPP).

“In the coming time, IHI will focus on projects under the public-private partnership (PPP) model. In order to participate in public-private partnership projects in Vietnam, I hope that Vietnam will complete the legal system in this field. I look forward to receiving cooperation from Vietnam in the coming time" - Mr. Tsugio Mituoka expressed.

A representative of Hitachi Group, a unit participating in the construction of the No. 1 urban railway project in Hanoi, wishes to provide information technology application services in Vietnam. Accordingly, it wants to focus its business in Vietnam on the field of high-tech infrastructure. The Group proposes that the Government pay attention to training high-quality human resources in digital technology.

The Prime Minister affirmed: The Government is always listening to further improve the investment environment and hopes that businesses will invest more strongly in Vietnam.

Representatives of Japanese enterprises also mentioned many issues regarding land access, tax incentives, expanding the capital contribution ratio of foreign investors in logistics enterprises... Mr. Yamauchi, Chairman of Yamoto Holdings Group, operating in the logistics sector, a unit operating in Vietnam, said that the group is providing delivery, especially cold delivery, which means cooling goods for delivery. This is a service the group wants to provide in Vietnam and Southeast Asia.

“This service really needs the application of information technology to improve quality. Therefore, we hope that Vietnam's information technology industry will develop to cooperate with us. With the logistics industry still limiting the capital contribution ratio for some services to no more than 49%, we hope that the Government will loosen it more,” said Mr. Yamauchi.

Concluding the meeting, Prime Minister Nguyen Xuan Phuc highly appreciated the businesses for their frank opinions and was pleased to see that Japanese businesses continue to have the desire to invest in Vietnam. The Vietnamese Government and authorities acknowledge this and will remove obstacles and create favorable conditions for Japanese businesses to do long-term business in Vietnam.

The Prime Minister acknowledged the proposals of enterprises on developing information technology as a foundation for developing other industries; training high-tech human resources and management staff; postal and telecommunications services, investment in logistics, development of industrial parks, retail of products, especially development of high-tech agriculture... The Prime Minister said that these are issues that Vietnam is interested in and needs to develop.

“Enterprises have also proposed a number of issues regarding land use rights, Vietnamese law including the Constitution and the Land Law clearly states this issue. The land lease term is 50 years or longer if there is a need. Regarding the issue of training management staff, we have noted this proposal so that universities will study this issue, including the Vietnam-Japan University and other school systems, so that we can study the issue of middle management in Vietnam today" - the Prime Minister stated.

Regarding the capital contribution ratio in the logistics sector, the Prime Minister said: “Logistics in Vietnam is an industry with favorable conditions for development. Vietnam will review current regulations to adjust so that in some specific cases, capital contribution can be over 49%. Currently, we have a regulation below 49%, you suggest removing this ceiling to be higher than 49%. This is a positive opinion and the Prime Minister acknowledges this issue and will soon respond to Japanese investors.”

The Prime Minister also answered tax issues raised by investors, affirming that the Government always listens to further improve the investment environment and hopes that businesses will invest more strongly in Vietnam, especially in the fields of information technology, agriculture and services where Japanese businesses have strengths.

According to VOV