They also continue to consider Vietnam an important investment destination, he said at a press briefing announcing the result of a survey on the operation of Japanese companies in Vietnam in Hanoi on February 14.

The survey examined the business operations of Japanese companies in Asia and Oceania in 2016. It was carried out in Vietnam in October and November 2016, involving 639 valid respondents.

Over 60% of the responding firms said they earned profits from investment in Vietnam (up 4% from 2015), while 25.1% reported loss (up 1.1%).

Moreover, 80% said they had expanded their business due to revenue increases while 63% of firms in non-manufacturing industries cited “high growth potential” as reasons for their expansion plans.

Vietnam’s investment environment is being improved, according to many businesses.

However, 58.5% of them said the labour cost was increasing, while around 40% considered incomplete infrastructure facilities and complicated taxation procedure risks.

Vietnam ranks fourth among fifteen nations with underdeveloped support industries, according to 34.9% of the surveyed firms.

Over 60% complained about increasing salaries for local employees and difficulties in the procurement of raw materials and parts locally.

The rate of applying free trade agreements (FTA) and economic partnership agreements (EPA) among Japanese firms in Vietnam reached 47.2%, up 2.2% from last year.