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Japanese companies accelerate investment interest in Vietnam

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Despite the decline in transaction value in 2024, the number of deals between Japanese and Vietnamese enterprises still recorded a slight increase, showing that Japanese investors’ interest in the Vietnamese market remains strong.

According to the latest report published at the Vietnam Mergers and Acquisitions Forum 2024, the total value of Japanese merger and acquisition (M&A) deals in Vietnam in 2024 reached $167 million, a sharp decrease compared to $1.55 billion in the previous year.

Japanese companies accelerate investment interest in Vietnam
Phi Hoa, founder and CEO ONE-VALUE

However, the number of transactions increased to 21 deals, showing that despite the lack of blockbuster deals, Japanese enterprises still maintain their expansion strategy into Vietnam through small and medium-sized deals.

This clearly reflects that Japan’s interest in the Vietnamese market remains substantial, despite global uncertainties such as geopolitical tensions and tariff risks. Healthcare services and medical support, along with high technology, semiconductors, retail, and energy, are emerging as focal points of this investment wave.

For example, the deal in which Elan acquired 51 per cent of TMC Vietnam, in which we provided end-to-end advisory services, serves as clear evidence of the shift in Japanese investment strategy. No longer focusing solely on manufacturing, finance, and retail, Japanese enterprises are making a strong move into healthcare services and medical supply chains – a sector with immense growth potential in Vietnam over the next decade.

The success of this deal could set a precedent for a wave of future M&A transactions, paving the way for deeper collaboration between businesses from both countries. Vietnam is gradually solidifying its position as one of the most important strategic markets for Japanese enterprises in Southeast Asia, and this is only the beginning of a new investment wave.

The Vietnamese market boasts a high growth rate, a young population, and a rapidly expanding healthcare system. Elan’s decision to make Vietnam the first destination in its Southeast Asia expansion strategy is no coincidence. The company recognises the long-term potential of medical support services, especially amid the strong growth of private hospitals.

Moreover, acquiring TMC not only enables Elan to accelerate market entry but also allows it to leverage an existing customer network to swiftly roll out its Care Support Set – its flagship product.

This year, the fundamental factors sustaining Japan’s investment wave into Vietnam remain unchanged. While 2024 witnessed the rise of mid-sized and small-scale M&A transactions, 2025 is expected to mark a significant transformation, with Japanese conglomerates making bold moves in technology, financial services, and healthcare.

The ongoing shift of capital away from China continues to drive the expansion of supply chains into Southeast Asia, with Vietnam emerging as a top destination. Japanese enterprises are increasingly focusing on high technology, AI, semiconductors, and research and development, aiming not only to leverage Vietnam’s skilled workforce but also to expand their influence within the global value chain.

Interest in the semiconductor industry is also rising sharply, particularly as Vietnam implements structured investment policies to attract capital into this sector.

At the same time, healthcare services and pharmaceuticals are emerging as a strategic investment sector. Vietnam is in the early stages of upgrading its healthcare infrastructure, with a strong demand for modern equipment, premium healthcare services, and private hospitals. This presents a golden opportunity for Japanese corporations to establish their presence not only through direct investment but also through M&A transactions, enabling rapid market entry.

Beyond healthcare, consumer finance, digital banking, and fintech are also gaining traction among Japanese investors. The rapid growth of e-commerce and personal finance demand is creating opportunities for Japanese conglomerates to expand operations through M&As.

Another noteworthy trend is the growing proactivity of Vietnamese enterprises. In addition to being a prime destination for Japanese capital, Vietnamese businesses are expected to seek investment opportunities in Japan through reverse M&A transactions. Companies specialising in technology, financial services, or food supply chains could emerge as key players in the Japanese market in the near future.

Vietnam is entering a crucial phase in its integration and foreign investment attraction. M&As are not only a tool for Japanese businesses to expand their market share, but also an opportunity for Vietnamese enterprises to elevate their position and integrate into the global value chain. The investment wave from Japan in 2025 will continue and expand with highly strategic transactions, laying the foundation for a sustainable partnership between the two economies.

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How businesses can avoid greenwashing plight

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Greenwashing occurs when businesses mislead customers by misrepresenting or exaggerating the environmental benefits of their products or services.

How businesses can avoid greenwashing plight
Lam Nguyen Hoang Thao, lawyer, Russin & Vecchi

This practice might attract eco-conscious customers who are willing to pay a premium for environmentally friendly products, thus providing businesses with a market advantage. In many countries, greenwashing is illegal and can result in severe penalties, loss of customer trust, and reputation damage.

Greenwashing scandals have shaken major corporations. In 2022, global fashion giant H&M faced a lawsuit in the US over its “Conscious Choice” collection, for misleading consumers with exaggerated sustainability claims that lacked credible evidence. Earlier this year, Clorox Australia was fined AUD8.25 million ($5.2 million) by the Australian Competition and Consumer Commission for falsely marketing its ocean-bound plastic recycled bags as eco-friendly, despite insufficient evidence.

Apple is also currently facing a lawsuit over its claim that two of its Apple Watch models are carbon-neutral. The claim is based on Apple’s contributions to afforestation projects in Kenya and China, which generate carbon credits to offset its emissions. However, serious doubts have been raised about whether these projects would have existed without Apple’s involvement. Even Singapore’s Changi Airport has been criticised for its “carbon-neutral” status linked to ineffective offset projects.

In Vietnam, where economic development must now align with environmental actions, these scandals should serve as a strong alert for Vietnamese businesses. They should take proactive steps to avoid such pitfalls.

To highlight their green efforts and commitment, businesses often label their products with consumer-appealing terms such as “eco-friendly”, “sustainable,”, “carbon-neutral,” or “net-zero”. These labels must be supported by proper evidence, otherwise, they risk becoming the basis for greenwashing. While Vietnam has yet to enact specific laws targeting greenwashing, existing regulations can serve as a foundation for legal actions against deceptive environmental claims.

Firms must be aware of these regulations to ensure compliance and avoid potential violations. Article 45 of the Competition Law 2018 bans unfair practices such as providing false or misleading information to attract customers. Violations can result in fines ranging $4,000-$8,000. The Vietnam Competition Commission enforces penalties for such competition offences.

Under the Law on Protection of Consumers’ Rights 2023, Article 21 mandates that companies provide accurate and complete details about product quality, utility, origin, and other attributes. Meanwhile, Article 10.1 prohibits deceiving or misleading consumers with false, incomplete, or inaccurate information about products or services. Overstating the environmental benefits of a product or service may be considered providing inaccurate information under this provision.

Articles 49 and 50 allow consumer protection associations to support consumers and report violations, and assist state agencies in addressing deceptive practices. Violations of these obligations are penalised with fines of $800-1,200, alongside a requirement to publicly retract the false claims. While current domestic penalties may seem modest compared to international fines, the reputational harm and corrective measures, such as forced public retractions or suspension of licences, can significantly impact businesses.

The Law on Advertisement 2012 also provides another layer of oversight. Article 8.9 prohibits advertising inaccurately about product quality, utility, or origin, as well as any claims that could cause confusion about a business’s capabilities, which can include misleading environmental claims. Violations carry fines of $2,400-3,200. Additional sanctions may include licence suspensions of 5-24 months, mandatory removal of deceptive advertisements, and public apology requirements. Finally, under the Commercial Law 2005, businesses are prohibited from engaging in deceptive practices. Article 109.7 bans false advertising about product attributes, and Article 123.5 forbids displaying goods that misrepresent their quality to mislead customers.

We can look at the international context on this issue. In Australia, the Australian Consumer Law regulates misleading or deceptive conduct and false representations about goods, with penalties reaching up to $31.47 million. In Europe, the 2024 Greenwashing Directive bans unverified eco-labels, exaggerated claims based on a single product or business aspect, and vague terms like green or sustainable unless supported by recognised standards. As for the United States, the FTC Act governs deceptive practices and environmental claims, with fines of up to $50,000 per violation.

As Vietnam undergoes an energy transition, businesses should take key steps to ensure their sustainability claims are credible. All environmental claims should be supported by solid evidence, such as verifiable data, third-party certifications, and comprehensive reports on carbon emission cuts, waste reduction, and more.

Transparency should be a priority. Firms should openly disclose both achievements and challenges in sustainability efforts, rather than making unverified carbon-neutral claims. If using carbon offsets, businesses should select carbon credits verified by highly reputable standards such as the Verra or GS, avoiding cheap but unreliable options. Companies should train their staff, especially marketing teams, to ensure that their marketing materials comply with international standards. The legal department should stay updated on new Vietnamese and international regulations, which will help businesses mitigate compliance risks and maintain credibility.

Greenwashing has become a serious legal and ethical issue with real consequences. To avoid risks, firms should ensure their sustainability claims are honest, clear, and backed by evidence. By learning from international lessons, we can turn sustainability into a true advantage while avoiding the costly pitfalls of greenwashing.

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Trading training alignment comes through partnerships

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Vietnam is taking decisive steps towards establishing a domestic trading system as part of its commitment to reducing greenhouse gas emissions and achieving net-zero emissions by 2050.

Trading training alignment comes through partnerships
John Robert Cotton, senior programme manager Southeast Asia Energy Transition Partnership

As Vietnam moves towards piloting Emissions Trading System (ETS) from 2025, followed by full implementation in 2029 and eventual integration with international carbon markets in 2030, continued training and capacity-building efforts will be essential. Several strategies can be pursued to sustain its impact.

One of the most significant initiatives supporting this transition has been the ETS Training and Simulation Programme, implemented through the Southeast Asia Energy Transition Partnership (ETP) under the United Nations Office for Project Services (UNOPS). This has enhanced the capacity of key stakeholders, raising awareness and providing practical experience in emissions trading mechanisms.

At the forefront of Vietnam’s efforts to develop its carbon market is the Department of Climate Change under the Ministry of Agriculture and Environment. Responsible for designing climate change policies and overseeing carbon market development, the department plays a pivotal role in shaping the country’s climate action strategy.

The UNOPS and ETP are providing technical support and capacity-building initiatives to help Vietnam develop its carbon market and achieve its climate goals. This partnership is strengthening institutional readiness and aligning Vietnam’s framework with best practices.

An ETS operates on a cap-and-trade principle, where a limit is set on total emissions allowed from specific sectors or industries. Companies receive or purchase emission allowances, which they can trade with others depending on their emission levels. This market-based approach provides a financial incentive for industries to reduce their emissions in the most cost-effective way.

By setting a progressively declining cap, an ETS ensures a gradual reduction in emissions over time, supporting national climate goals. To date, more than 30 ETSs have been implemented worldwide, covering major economies such as the European Union, China, and South Korea. Vietnam is following a phased approach to developing its ETS, beginning with a pilot phase from 2025 to 2028, leading to full implementation in 2029 and international market integration by 2030.

The ETS Training and Simulation Programme in Vietnam has exceeded expectations in terms of reach and impact. Initially planned for four training sessions, the high demand and success of the early sessions led to an expansion to six sessions in Hanoi and Ho Chi Minh City in 2024. In total, 657 participants from various sectors engaged in the initiative. Over 80 per cent of attendees rated the training as highly beneficial, particularly valuing the interactive components and hands-on CarbonSim simulation exercises.

Through this training, participants gained essential skills and knowledge in understanding ETS principles, carbon pricing mechanisms, and emissions trading strategies. They also developed expertise in mastering key regulatory requirements for compliance with Vietnam’s forthcoming carbon market and learned how to participate in carbon trading, including cap setting, allowance allocation, and market transactions.

Furthermore, the training provided participants with strategic decision-making skills to optimise emissions reduction costs while ensuring regulatory compliance.

The programme played a crucial role in strengthening ETS readiness across various agencies, organisations, and businesses in Vietnam. Before the training, knowledge gaps existed among many stakeholders, particularly regarding market mechanisms and regulatory frameworks. Surveys conducted before and after training showed significant improvements in participants’ understanding.

Confidence in explaining carbon pricing increased considerably, and awareness of trading mechanisms, including auctions and over-the-counter markets, also improved significantly. The perception of ETS as essential for Vietnam’s climate goals grew stronger among participants.

A highlight of the training was the use of the CarbonSim tool, which allowed participants to engage in a realistic trading environment. These simulations effectively modelled core components such as cap setting, allowance allocation, trading mechanisms, and compliance requirements. The training helped stakeholders improve their understanding of the carbon market and ETS in both theoretical and practical aspects.

The programme successfully met its objectives of enhancing ETS literacy, strengthening institutional capacity, and preparing stakeholders for the upcoming carbon market. Increased recognition as a cost-effective emissions reduction tool was evident, and stronger confidence among stakeholders to navigate its compliance frameworks and trading strategies was observed.

Developing a network of trained professionals who can serve as future trainers will be instrumental in expanding the programme’s reach. Leveraging international partnerships and collaborating with established ETS markets will ensure that Vietnam remains aligned with global best practices. Encouraging government agencies to integrate such training into broader climate policy initiatives will further ensure long-term sustainability.

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Work starts at $35 mln Singapore-invested sport gear factory

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Outdoor Gear Vietnam, under Singapore-incorporated Outdoor Gear, kicked off the construction of a VND900 billion ($35.3 million) sport gear factory in Vietnam’s central province of Thanh Hoa on Monday.

Covering 10.3 hectares in Nga Son district, the factory features eight production lines and can employ 5,000 people. The factory will manufacture outdoor sport equipment, serving both the domestic and export markets.

Outdoor Gear Vietnam holds a groundbreaking ceremony in Thanh Hoa province, central Vietnam on March 17, 2025. Photo courtesy of Thanh Hoa newspaper.

Outdoor Gear Vietnam holds a groundbreaking ceremony in Thanh Hoa province, central Vietnam on March 17, 2025. Photo courtesy of Thanh Hoa newspaper.

The project’s key investor, China-headquartered Outdoorsy Group, now operates factories and facilities in China, Cambodia, Vietnam, and Singapore.

Its key products include backpacks, briefcases, golf bags, fashion bags, rolling bags, drysuits, boots, and sports accessories. Its major partners include Costco, Walmart, and Amazon.

The firm aims to complete the first phase construction of the plant by end-2025.

Thanh Hoa is a key foreign direct investment hub in Vietnam. The country attracted FDI with total registered capital of $502.82 billion as of end 2024, and Thanh Hoa ranked ninth among all localities with $15.55 billion.

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