Third Vietnam - Japan Policy Dialogue: Recognition and Troubleshooting

Minister of Planning and Investment Bui Quang Vinh said Vietnam - Japan comprehensive cooperation and partnership has progressed to a new level. He also appreciated the accelerated implementation of Vietnam - Japan Joint Initiative by establishing a committee responsible for carrying out the Joint Initiative 11 years ago. And, this is a platform model for exchanging Vietnamese governmental agencies with Japanese associations and companies to promote the improvement and perfection of business investment environment in Vietnam in the past time. Besides, by specifying working items of the Joint Initiative, the two countries continued to build the industrialisation cooperation strategy to 2020 and 2030. Accordingly, the strategy focuses on six priority industries of Vietnam, including electronics, agricultural machinery, agricultural and aquatic product processing, shipbuilding, environment and energy saving, and automobile and parts manufacturing. With the two-way agreement on investment environment and investment sectors they are strong at, this is considered a very great advantage for Japanese companies to invest in Vietnam and become a leading investor out of 105 states investing in Vietnam.

 

Also at the dialogue, Minister Vinh expressed his trust and appreciated cooperation model between Dong Nai Province of Vietnam and Saitama Prefecture of Japan after the two localities signed an agreement to which Saitama Prefecture would lease the entirety of ​​2,180-ha Nhon Trach Industrial Park. The event will pave the way for drawing more businesses from Saitama Prefecture into Nhon Trach Industrial Park. “We are appraising this investment model. If it is deemed effective, it can be multiplied nationwide,” he said.

 

While providing information on new legal institutions concerning investment attraction in Vietnam for Japanese companies, Mr Phan Duc Hieu, Head of Business Environment and Competitiveness Department under the Central Institute for Economic Management (CIEM), said the amended Law on Enterprises fully institutionalised business freedom according to the Constitution of 2013, reduced risks and increased the autonomy of business operations for enterprises. This law specifies that business registration certificate now does not include information on business scopes but only basic information about expected major business scopes declared by enterprises and recorded in the business registry. Besides, some important changes of the law include abolishing requirements of professional practicing certificate and certification of authorised capital in business establishment registration documents; shortening the settlement time required for business registration procedures or business registration modification documents to no more than 3 days; simultaneously combining business registration procedures, labour registration procedures and social insurance registration procedures; changing methods of managing and abolishing corporate seal registration procedures.

 

Quach Ngoc Tuan, Deputy Director of Legal Affairs Department, also communicated some new contents in the amended Law on Investment like reducing the duration required for investment registration certification procedures applicable to foreign investors to 15 days from 45 days earlier. In addition, the Law stipulates that only enterprises with foreign investors holding more than 51 per cent of stake are subject to foreign investment conditions and procedures.

 

Mr Yoichi Kobayashi, Chairman of Japan Mekong Economic Committee, said that investment and trade cooperation potential for Vietnam and Japan is enormous, particular following the establishment of the ASEAN Economic Community in late 2015 as well as the conclusion of important international trade agreements such as the TPP and FTAs. Therefore, he hoped Vietnam will quickly achieve higher rankings of competence in the region and in the world as a whole.

 

Mr Shimon Tokuyama, Chairman of Japan Business Association in Vietnam, said more Japanese companies are doing business in Vietnam, including 122 new Japanese companies licensed in 2014. At present, the total number of Japanese companies in Vietnam is more than 11,000, second only to Thailand. He added that, to further attract Japanese companies, the Government of Vietnam should attempt to resolve outstanding barring issues such as regulations on restrictive import of used equipment and machinery, entry and exit visa, minimum wage increase, wage gaps, overtime work, and restrictions on formation of wholly foreign-owned logistics companies.

 

Minimum wage hike is distressing companies. The annual salary growth rate is even higher than the country’s GDP growth, thus causing difficulties for Japanese companies to find new workers. Therefore, he recommended that the Government of Vietnam take into consideration economic growth and labour productivity when it calculates minimum wage increase.

 

In addition, Shimon Tokuyama proposed easing visa regulations for Japanese people. Specifically, according to new regulations effective in January 2015, foreigners will be waivered visa if they leave Vietnam at least 30 days from the last visit. “In my business delegation, some will return to Japan after this meeting and they will come back to Vietnam next week to attend the working meeting of the Japan Business Federation (Keidanren). Under the new ruling, they will not have enough time to apply for a new visa to Vietnam. This will be a major influence on plans of Japanese companies.” Therefore, regarding visa for Japanese businesses, the Government of Vietnam should continue their old regulations instead of this change, Shimon Tokuyama said.

 

Minister Bui Quang Vinh highly appreciated valuable contributions from Japanese companies and pledged to forward them to relevant authorities in the shortest time.