In 2025, Vietnam continues to stand as one of the most attractive investment destinations for foreign companies, and Japan is no exception. With its strong historical ties, a booming trade relationship, and the shared interest in sectors such as manufacturing, automotive, technology, and consumer goods, Japan’s economic presence in Vietnam has grown significantly in recent years. This trend is expected to accelerate in 2025, offering vast opportunities for Japanese companies looking to tap into one of Southeast Asia’s most dynamic markets.
In this guide, we’ll walk you through everything you need to know about setting up a Japanese company in Vietnam, from choosing the right business structure to navigating local regulations and leveraging the various incentives available for foreign investors.
Why Japan Companies Are Choosing Vietnam in 2025
1. Vietnam’s Economic Growth and Stability
Vietnam is one of the fastest-growing economies in the world, consistently posting strong GDP growth. In 2025, the Vietnamese economy is expected to continue its robust expansion, fueled by growing domestic consumption, increasing exports, and strong foreign investment. Japanese businesses are increasingly attracted to the market due to its economic resilience and long-term growth prospects.
2. Strategic Location and Access to ASEAN Markets
Vietnam’s geographic location in the heart of Southeast Asia offers Japanese companies access to a market of over 650 million people across ASEAN. It serves as a gateway to both China and other ASEAN nations, making it an ideal hub for regional trade, manufacturing, and distribution.
3. Strong Bilateral Trade Relations
Vietnam and Japan have a long-standing economic partnership. Japan is one of Vietnam’s largest foreign investors and a key trade partner. As part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and other trade agreements, Vietnam provides significant trade advantages to Japanese companies, including tariff reductions and increased market access.
4. A Skilled and Affordable Workforce
Vietnam offers a young, highly educated workforce at competitive wages. For Japanese companies in industries such as electronics, textiles, automotive parts, and machinery, the availability of skilled labor at a fraction of the cost compared to Japan makes Vietnam an attractive production base.
5. Incentives for Foreign Investment
The Vietnamese government provides various incentives for foreign companies, particularly in high-tech, manufacturing, and green industries. These incentives can include tax holidays, reduced corporate income tax rates, and exemptions on land use fees, making it an appealing location for Japanese companies looking to optimize costs while expanding in Asia.
Step-by-Step Guide to Set Up a Japanese Company in Vietnam
Setting up a Japanese company in Vietnam in 2025 is a multi-step process that requires careful planning and attention to legal requirements. Here’s an overview of the key steps involved:
1. Choose the Right Business Structure when Establishing a Japanese Company
One of the first and most important decisions for a Japanese company is selecting the appropriate business structure. The following are the most common options for foreign investors in Vietnam:
Wholly Foreign-Owned Enterprise (WFOE): This structure allows the Japanese company to maintain full ownership and control over its operations. It’s a popular choice for businesses that wish to operate independently and without local partners.
Joint Venture (JV): A JV involves a partnership between a Japanese company and a local Vietnamese entity. It is beneficial for companies that want access to local market knowledge, networks, and resources.
Branch Office: A branch office allows the Japanese company to set up a presence in Vietnam without creating a separate legal entity. However, it can only conduct activities that are related to the parent company’s operations.
Representative Office: Ideal for market research and promotional activities, representative offices cannot engage in direct revenue-generating activities or enter into contracts.
2. Register Your Business with the Vietnamese Authorities
Once you’ve selected your business structure, the next step is to register your company with the Department of Planning and Investment (DPI). This process involves several key steps:
Name Approval: Ensure that your company’s name is unique and complies with Vietnamese regulations. The name should either be in Vietnamese or have a Vietnamese transliteration.
Prepare the Necessary Documents: The required documents include the company charter, identification of company representatives, proof of the company’s status in Japan, and a business plan.
Submit the Registration Application: Submit your application to the DPI. The approval process typically takes 10-15 business days.
Obtain the Business Registration Certificate: After approval, you will receive the Business Registration Certificate, which is the legal document that grants your company the right to operate in Vietnam.
3. Open a Corporate Bank Account when Establishing a Japanese Company
Once your company is registered, you will need to open a corporate bank account in Vietnam. This account is essential for conducting business transactions, paying taxes, and managing payroll. Most major Vietnamese banks, including Vietcombank, VietinBank, and HSBC Vietnam, offer corporate banking services to foreign investors.
Documents Required: To open a bank account, you’ll typically need to present your business registration certificate, tax code, identification of the company’s directors, and other related documents.
4. Tax Registration and Compliance when Establishing a Japanese Company
Vietnam has a well-defined tax system, and understanding the country’s tax obligations is crucial for staying compliant. As a foreign investor, you will need to register for taxes with the General Department of Taxation. Some of the key taxes include:
Corporate Income Tax (CIT): The standard CIT rate in Vietnam is 20%, though companies in certain sectors, such as high-tech and manufacturing, may qualify for preferential rates or tax exemptions.
Value-Added Tax (VAT): VAT is generally set at 10%, but reduced rates may apply to certain goods and services.
Personal Income Tax (PIT): Foreign employees working in Vietnam are subject to PIT, which is typically deducted at the source.
Other Taxes: Depending on your business activities, you may also be subject to import-export duties, environmental taxes, and property taxes.
5. Labor Laws and Hiring Employees when Establishing a Japanese Company
Vietnam has a young, skilled, and competitive labor force, making it an ideal location for companies looking to scale their workforce. However, businesses must adhere to Vietnamese labor laws, which include:
Labor Contracts: All employees must have written labor contracts that comply with local regulations.
Social Insurance: Employers are required to make contributions to Vietnam’s social insurance system, which includes pensions, healthcare, and unemployment insurance.
Work Permits for Foreign Employees: If your company employs foreign nationals, you will need to apply for work permits for these employees through the Ministry of Labor.
6. Sector-Specific Licenses and Approvals when Establishing a Japanese Company
Depending on the nature of your business, you may need to obtain additional licenses or approvals. For example:
Manufacturing: Companies involved in manufacturing may require environmental permits and land-use rights.
Tech Startups: The technology sector is highly regulated in Vietnam, and you may need specific permits if you plan to engage in telecommunications or software development.
Food and Beverage: The food industry is subject to strict health and safety regulations and may require additional certifications.
7. Marketing and Expansion Strategies when Establishing a Japanese Company
Once your company is legally established, the next step is to focus on market entry and expansion. This includes:
Market Research: Conduct in-depth research to understand local consumer behavior, preferences, and demand. Tailoring your products and services to meet local needs can give you a competitive edge.
Building Local Partnerships: Forming strong relationships with local suppliers, distributors, and partners can help you navigate the market more effectively.
Digital Marketing: Vietnam has a rapidly growing internet user base. Developing a digital marketing strategy that includes social media, e-commerce platforms, and online advertising is crucial to engaging the local audience.
Key Considerations for Japanese Companies
Cultural Adaptation: Understanding Vietnamese business culture, including communication styles, decision-making processes, and negotiation tactics, is essential for long-term success.
Legal Support: Vietnam’s regulatory environment can be complex, so seeking legal advice from a local law firm with expertise in foreign investment is highly recommended.
Cost Structure: While Vietnam offers competitive labor costs, foreign businesses should factor in initial investments such as office space, equipment, and human resources.
Why Choose La Défense Law Firm for Your Investment in Vietnam?
Setting up a company in a new market can be a complex process, especially for foreign investors. La Défense Law Firm is a trusted partner for Japanese companies looking to expand in Vietnam. With extensive experience in foreign investment law, La Défense offers tailored legal solutions that ensure your business complies with all local regulations and operates efficiently.
Why Choose La Défense Law Firm?
Expertise in Foreign Investment: La Défense specializes in guiding foreign companies through the complexities of the Vietnamese legal landscape. Their expertise ensures that you can navigate the registration process, tax laws, and labor regulations with ease.
Tailored Solutions: Every business is unique. La Défense offers customized advice that aligns with your specific needs and goals, helping you achieve long-term success in Vietnam.
End-to-End Services: From company registration to post-investment compliance, La Défense provides comprehensive support throughout the entire process, ensuring your business remains compliant and efficient.
Local Insights: With deep local knowledge and expertise, La Défense offers valuable insights into the Vietnamese market, helping you minimize risks and maximize opportunities.
For Japanese companies looking to invest in Vietnam in 2025, La Défense Law Firm is your go-to legal advisor to ensure smooth operations, minimize risks, and help you thrive in this promising market.
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