The Japan External Trade Organization (JETRO) recently released its “Survey on the Business Conditions of Japanese Companies Overseas for the Fiscal Year 2024,” conducted across 20 countries and regions in Asia and Oceania.

The survey, conducted from August to September 2024, gathered responses from 5,007 Japanese businesses, including 863 currently operating in Vietnam. These companies include those with at least 10% Japanese investment, as well as branches and representative offices.

Among Japanese businesses in Vietnam, 64.1% expect to be “profitable” in 2024 (a 9.8 percentage point increase from the previous year). This marks the first time in five years, since before the Covid-19 pandemic, that profitability expectations have exceeded 60%.  

In the manufacturing sector, 70.2% of firms project profits in 2024, an increase of 8.7 points year-on-year. The main reason cited by manufacturing companies for improved profit expectations in 2024 is "increased demand in both export and domestic markets.

Similarly, 57.9% of non-manufacturing businesses anticipate profits, an 11.2 percentage point increase from the previous year. The primary reason for this improvement is also the growth in demand across export and domestic markets.  

The survey further revealed that 48.8% of businesses expect their 2024 operations to “improve” compared to 2023, a significant increase of 16.8 points year-on-year. Meanwhile, only 16.9% predict a “decline,” a reduction of 18.8 points. Vietnam saw the highest increase in optimism among ASEAN nations.  

Looking ahead to 2025, 50.4% of businesses anticipate their profitability will “improve” further compared to 2024, reflecting continued confidence in sustained positive results.  

In terms of business plans for the next 1-2 years, 56.1% of Japanese companies responded that they will "expand" their operations in Vietnam. Of these, 48.1% of manufacturing companies (a 1.0 percentage point increase from the previous year) and 63.2% of non-manufacturing companies (a decrease of 2.3 percentage points) indicated that they will "expand".

On the other hand, 2.8% of firms plan to “scale down” their operations in Vietnam, an increase of 1.0 percentage point from the previous year, while only 0.3% intend to “withdraw or relocate to a third country,” a drop of 0.4 points.  

Despite a stable level of expansion ambition among Japanese businesses, Vietnam continues to lead ASEAN as the top destination for Japanese investment expansion.  

According to data from the Ministry of Planning and Investment, as of the end of November 2024, Japan has invested in 5,473 projects in Vietnam, with a total registered capital of over US$77.64 billion, ranking third among countries and territories investing in Vietnam. In the first 11 months of this year alone, Japan invested in 245 new projects in Vietnam, with a total registered capital of over US$3.61 billion, a 16.4% increase compared to the same period last year.