In January, Japanese firms invested US$599.09 million in foreign direct investment (FDI) in Vietnam across 21 new projects, according to data from Vietnam’s Ministry of Planning and Investment. This marks an increase of US$710.96 million in registered capital compared to December, which saw a negative balance of US$111.87 million across 25 new projects.
Japanese investments accounted for 13.82 percent of total FDI in January, up from -1.56 percent in December.
Japan is one of the leading sources of foreign direct investment (FDI) in Vietnam, reflecting strong bilateral economic ties and mutual interests in industrial cooperation and regional growth. Japanese companies have been increasingly active in investing across various sectors in Vietnam, including manufacturing, automotive, electronics, retail, and infrastructure development. The country’s rapid economic development, young and competitive workforce, and improving business environment make Vietnam an attractive destination for Japanese investors looking to expand in Southeast Asia.
The manufacturing sector is one of the primary areas for Japanese FDI, with companies such as Toyota, Honda, Panasonic, and Canon establishing significant operations in Vietnam. These companies benefit from Vietnam’s competitive labour costs, proximity to regional supply chains, and improving infrastructure. The automotive sector, in particular, has seen considerable investment, with Japanese automakers playing a key role in both vehicle assembly and components production. Japanese companies are also heavily involved in the electronics industry, producing a wide range of products for both domestic and international markets.
Additionally, Japan has invested in Vietnam’s infrastructure projects, including transport, energy, and real estate, with a focus on sustainable urban development and green technologies. The Japan-Vietnam Economic Partnership Agreement (JVEPA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have also played a role in encouraging Japanese FDI by reducing trade barriers and providing greater market access.
See also: List of Vietnam’s Free Trade Agreements