Japan is one of the leading foreign investors in Vietnam, especially in the fields of processing, manufacturing, mechanics, electronics, real estate, and services. This article will provide information on the situation of Japanese foreign direct investment (FDI) in Vietnam, an overview of Japanese enterprises, and an assessment of the opportunities and challenges for Japanese enterprises in the business environment in Vietnam.

Overview of Japanese FDI in Vietnam

Despite the impact of the COVID-19 pandemic, many Japanese enterprises still maintain operations and continue to expand investment in Vietnam in the period of 2020 to 2023. In 2024, Japan’s FDI capital in Vietnam reached 3.5 billion USD, down more than 48% compared to the previous year, mainly due to Japanese enterprises recognizing challenges in the investment environment in Vietnam[1]. In 2024, Japan ranked 3rd in terms of newly registered FDI capital in Vietnam (accounting for 9.2%), after Singapore (26.7%) and South Korea (18.5%).

Licensed Japanese FDI value by year

Unit: Billion USD

Source: B&Company synthesis

Japan’s main investment sectors in Vietnam include manufacturing, energy, trade and services, and real estate. In particular, the manufacturing industry still dominates with the participation of many large corporations such as Honda, Toyota, Canon, and Yamaha[2].

Also according to a survey by the Japan Export Trade Research Organization (JETRO), since Covid 19, the percentage of Japanese companies planning to expand in Vietnam has increased from 47% to 57% by 2023, showing that Vietnam continues to be an ideal destination for Japanese companies.

Percentage of Japanese companies planning to expand operations in Vietnam, 2010-2023

Unit: %

Source: Jetro

Overview of Japanese companies in Vietnam

According to B&Company’s database, in 2023 there will be over 3,200 Japanese enterprises operating in Vietnam (accounting for over 15% of the total number of FDI companies in Vietnam), mainly concentrated in big cities such as Hanoi, Ho Chi Minh City and key industrial parks in provinces such as Dong Nai, Binh Duong, Hung Yen, Ba Ria – Vung Tau, etc.

Number of Japanese companies in Vietnam 2019-2023

Unit: Companies

Source: B&Company database

Areas of operation of Japanese companies in Vietnam in 2023

Unit: Companies

Source: B&Company database

The main sectors in which Japanese companies invest include the Processing and manufacturing industry; Professional, scientific, and technological activities; Wholesale and retail trade, repair of automobiles, motorcycles, motorbikes and other motor vehicles; Information and communications; Construction; Transportation and warehousing; etc

Number of Japanese companies by industry in 2023

Unit: %; 100% = 3249 companies

Source: B&Company database

Typical Japanese companies in Vietnam

Source: B&Company database

Opportunities and challenges for Japanese companies in Vietnam

One of the great opportunities for Japanese companies is the market potential of Vietnam. With a young population and increasing per capita income, the Vietnamese market has become an attractive destination for Japanese products and services[3]. Japanese companies can take advantage of this to expand their operations in Vietnam, especially in sectors such as consumer goods, information technology and manufacturing. The Vietnamese government is also making efforts to improve the investment environment, creating preferential policies to attract foreign investment. Japanese companies can therefore easily participate in the manufacturing, retail and service sectors in Vietnam. In addition, the strong development of the information technology industry in Vietnam offers opportunities for cooperation for Japanese companies in the development of software and technology services, promoting technology transfer and growth in this sector.

However, in addition to great opportunities, Japanese companies in Vietnam also face many challenges. One of the major problems is the increased competition from other countries such as Korea, China and ASEAN countries. In addition, differences in culture and management methods can make it difficult for Japanese companies to operate and manage human resources in Vietnam. Another challenging factor is maintaining production and operational efficiency in the context of fluctuations in the global economy, as well as changes in the needs and consumption habits of Vietnamese people.

Conclusion

Japanese companies in Vietnam have been taking advantage of the great opportunities in the potential market and the supportive policies of the Vietnamese government. Despite challenges such as increased competition and cultural differences, the favorable investment environment and strong consumer demand have helped Japanese companies continue to grow in Vietnam. With the recovery of the economy and appropriate investment strategies, Japan will continue to maintain an important position in Vietnam’s investment sector.

[1] https://vnexpress.net/doanh-nghiep-nhat-than-thu-tuc-o-viet-nam-phuc-tap-4841746.html

[2] https://congthuong.vn/fdi-nhat-ban-vao-viet-nam-se-tang-nam-2025-373327.html

[3] https://vnexpress.net/viet-nam-dan-dau-khu-vuc-ty-le-doanh-nghiep-nhat-muon-mo-rong-4827154.html

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