Da Nang courting Japanese investors
Sixty per cent of Japanese investors face ongoing challenges with legal transparency, taxes, investment licence procedures and administrative reform when they invest in projects in the central region and Da Nang City.
Kana Miyazaki, deputy chief representative of the Japan External Trade Organisation (JETRO) in Ha Noi, reported these and other statistics yesterday during the annual dialogue between the Japanese Business Association in Da Nang (JBAD) and the city’s leadership.
Miyazaki said 60 per cent of Japanese investors in the central region and Da Nang still complain that unclear explanations and legal definitions and complicated investment licensing procedures and tax regulations remain major barriers to attracting Japanese investors to the city.
"A recent survey of JETRO revealed that 63 per cent of the Japanese firms based in Asia planned to expand their businesses in Viet Nam due to the development potential of the Asian market. Viet Nam is a favourite investment destination among Japanese investors, with its stable political situation and cheap labour costs," Kana said.
"Central Viet Nam’s attractions include favourable investment conditions, cheap labour and fast recruitment of skilled workers," she said.
Da Nang has smoothed the way for Japanese investors by setting up a Japanese Desk Da Nang team which will be available every Wednesday to support Japanese investors by explaining administrative procedures, investment licences, priority policies and other issues.
Kana said she hoped the city’s administration would support Japanese investors more actively, starting from the initial investment process.
The JETRO office in Ha Noi receives 12,000 visits from Japanese investors each year, asking for investment environment information about Viet Nam.
The number of Japanese projects in information technology, retail, hospitality industry and cuisine services has been drastically increasing, especially small- and medium-sized businesses with investment capital of US$5 million each, Kana said.
Vice chairman of Da Nang city’s People’s Committee, Ho Ky Minh, said investment projects funded by Japanese investors helped improve the city’s socio-economic development.
"Japan is the biggest investor in Da Nang, with 112 projects worth $397 million – 10 per cent of the accumulated foreign direct investment (FDI) projects in the city – creating 32,000 jobs for locals," Minh said.
"But the city has yet to attract huge FDI projects, so dialogue will help us speed up policy reform to attract more foreign investment in coming years," he said.
Minh said the city’s leadership wants to hear detailed opinions and requirements from Japanese investors regarding the investment environment, difficulties and barriers to doing business in Da Nang.
According to JBAD, the promised apartments, shopping areas and kindergarten projects in Industrial Zones (IZs) and Industrial Parks (IPs) have yet to be developed by the city.
General manager of Tokyo Keiki Precision Technology Inc, Michio Saruhasi, said the city should speed up construction connecting Nguyen Tat Thanh road with Da Nang city’s Hi-Tech Park.
"The delayed construction of the road limits us in employing workers. We can only contract 10 per cent of workers needed for our project right now," Michio said.
He said slow completion of the road also causes more transport difficulties for businesses.
General director of Da Nang Nippon Seiki Company, Moriyuki Hosokawa, said the city should build more IT buildings for Japanese IT companies’ expansion projects.
"Da Nang should develop more IT parks with the best cyber security, infrastructure and high speed internet service. We also need the city’s Information and Communications Department to provide rapid internet repair service within one hour - not the usual seven hours," Moriyuki said.
Da Nang University also proposes to increase enrollment in information technology training at the Technology College in 2016-20, to meet the demand for a skilled labour force for Japanese investors.
Director of the city’s investment promotion centre, Le Canh Duong, said 11 barriers raised by JBAD in a dialogue last year have been completely dismantled.
"We reduced the length of time needed to grant licences for foreign employees from two weeks to eight days. Some procedures has also been conducted online to facilitate things for Japanese businesses," Duong said. "Also, the city’s Customs Department now offers automatic customs clearance procedures for Japanese investors."
"Many Japanese investors agreed to build workshops to provide Japanese-style work places for companies in some industrial zones. Garbage collection and cleaning service is also done twice a week at Hoa Khanh Industrial Zone, as required of Japanese businenesses," he said.
The city will reserve a 9ha complex for developing apartments, supermarkets and 2,000 sq.m of kindergarten projects to serve IZ and IP workers in the Lien Chieu district in 2017-20.
Da Nang will subsidise 50 per cent of van rental costs for investors transporting workers from the city centre to IZs and IPs. Bus routes are planned for 2020.
The city has developed an Information Park on 344ha of land in Hoa Vang District and an IT park on 55.6ha nearby, where space has been reserved for IT investors from Japan.
The city also plans to build an industrial park for small- and medium-sized businesses from Japan on 134ha.
Da Nang will begin construction of the Japan-Viet Nam Culture Centre in Ngu Hanh Son District and launch a new direct flight from Da Nang to Osaka in October.
