Vietnam - A destination for Japanese investors.

Japan has the largest amount of foreign direct investment in Vietnam, totaling $35.4 billion.

On April 25th, the Vietnam Investment Promotion Conference, titled "Vietnam - A Destination for Japanese Investors," was officially held in Tokyo, Japan.

Minister Dinh Tien Dung

In his opening remarks at the conference, Minister of Finance Dinh Tien Dung stated that Vietnam and Japan have a long-standing relationship and many cultural similarities. In modern history, after more than 40 years since the establishment of cooperation between Vietnam and Japan, economic, investment, financial, and trade cooperation between the two countries has been strongly promoted. Particularly following the recent state visit to Japan, the leaders of the two countries agreed to upgrade the Vietnam-Japan strategic partnership to a comprehensive strategic partnership for peace and prosperity in Asia.

According to Minister Dinh Tien Dung, Japan is the largest foreign direct investment (FDI) investor in Vietnam, with a total capital of up to US$35.4 billion. Two-way trade between Vietnam and Japan reached US$25.3 billion in 2013, with Vietnam having a trade surplus of US$2 billion. Over the past 20 years, Japan has also been the largest provider of ODA loans to Vietnam, with a total committed capital of over US$21 billion, primarily focused on large-scale infrastructure projects. Most major Japanese financial corporations have a presence in Vietnam. The number of accounts held by Japanese investors currently accounts for a very large proportion, 40%, of the total number of foreign investor accounts trading on the Vietnamese stock market. The Minister also affirmed that Japanese investors play a very important role in the development of the Vietnamese economy. Vietnam acknowledges and highly appreciates the role of Japanese financial corporations and investors.

The Minister also reviewed the Vietnamese economy, the state of state-owned enterprise reform, and the economic restructuring process. The Minister affirmed that the Vietnamese Government is determined to accelerate the implementation of state-owned enterprise reform, particularly focusing on equitization linked to listing on the stock exchange, and divesting non-core investments of state-owned enterprises to improve operational efficiency. According to the Minister, legal and policy issues aimed at accelerating the restructuring of state-owned enterprises have been and are being finalized, and the Government has directed state-owned enterprises to develop and implement equitization according to the established roadmap. Accordingly, from now until the end of 2015, Vietnam plans to equitize 432 enterprises, including many large corporations and state-owned enterprises that are seeking strategic investors for equitization this year.

Regarding the Vietnamese stock market, the Vietnamese government is particularly interested in the sustainable development of the Vietnamese stock market. In 2013, the VNIndex increased by 22%, making it one of the strongest recovering stock markets in the world. The Vietnamese bond market was considered the best-performing in Asia in 2013. In the first quarter of 2014, the VNIndex increased by 16%, ranking second globally, and liquidity nearly doubled compared to the average of 2013.

The restructuring of the Vietnamese stock market has achieved positive results across four main pillars: the underlying assets, the investor base, securities trading organizations, and the market organization system. During this restructuring process, the Vietnamese government places particular emphasis on foreign indirect investment. In the coming period, Vietnam is reviewing the list of sectors and industries, expanding foreign participation in areas not subject to restrictions, in accordance with WTO commitments. To attract foreign capital, the Minister stated that Vietnam is amending the Investment Law, allowing an increase in the ownership ratio of foreign investors in joint-stock banks, while reducing the ownership ratio of state-owned corporations and conglomerates, including banks, to no more than 65%. The Vietnamese government is also considering expanding the investment ratio for foreign investors in the stock market.

According to the Chairman of the State Securities Commission of Vietnam, Vu Bang, the investment promotion event in Japan aims at three main objectives: firstly, to affirm the strong message of the Vietnamese Government in its institutional reform efforts, developing a stable and transparent Vietnamese economy, and its commitment to supporting Japanese investors in their investment activities in Vietnam. Secondly, the event is an opportunity to listen to Japanese investors and clarify any obstacles they face regarding mechanisms and policies during their investment process in Vietnam. In addition, with the participation of a delegation from many large enterprises soon to be equitized, this event aims to connect potential Japanese investors with investment opportunities in Vietnamese enterprises during the equitization process, capital increase, and the search for strategic investors.

At the seminar, Deputy Head of the Government Office Pham Viet Muon also shared the message that the Vietnamese Government always welcomes foreign investors to participate in the reform of the economy, especially the reform of state-owned enterprises and the banking and stock market systems. Due to the interest of many Japanese investors, many group or one-on-one meetings took place between companies about to be privatized and potential Japanese investors within the seminar space. Many Japanese investors expressed enthusiasm for new investment opportunities in Vietnam and wished to learn more about the companies and the economy to decide whether to enter this market.

In his closing remarks at the Conference, Minister Dinh Tien Dung affirmed that the Conference had helped Japanese businesses and investors better understand the situation in Vietnam and the Vietnamese Government's reform policies. The Conference also provided an opportunity for Vietnamese businesses and government agencies to grasp the recommendations from Japanese businesses in order to further improve mechanisms and policies, demonstrating the Vietnamese Government's special commitment to Japanese investors.

The conference attracted nearly 100 Japanese investors, including representatives from many large and reputable investment organizations such as SBI Group, Sumitomo, Daiwa, Mitsubishi, Mizuho, ​​Normura, Resona, JP Morgan, Aizawa, etc.

The conference focused on two main themes: “Policy Dialogue: State-Owned Enterprise Privatization and Economic Restructuring Policies” and “The Vietnamese Stock Market – A Destination for Japanese Investors”.

According to VOV