How to Set Up a Japanese Company in Vietnam 2025

Vietnam has become a popular destination for foreign investors, particularly those from Japan, due to its rapid economic growth, strategic location in Southeast Asia, and favorable business environment. In 2025, many Japanese companies are considering expanding their operations into Vietnam, making it an ideal time for new market entry. If you’re planning to set up a Japanese company in Vietnam, this guide will walk you through the entire process, key considerations, and the advantages of doing business in Vietnam.

Why Set Up a Japanese Company in Vietnam?

Vietnam offers a range of benefits for Japanese businesses looking to expand.

Here are some of the key advantages:

Robust Economic Growth: Vietnam has been one of the fastest-growing economies in Southeast Asia, with GDP growth averaging around 6-7% in recent years.

Young, Skilled Workforce: With a population of nearly 100 million, Vietnam has a large, young, and increasingly educated workforce, perfect for industries like manufacturing, technology, and services.

Competitive Labor Costs: Labor costs in Vietnam are relatively low compared to other countries in the region, providing Japanese businesses with a cost-effective option for manufacturing and outsourcing.

Strong Trade Relations: Japan is one of Vietnam’s largest trading partners, benefiting from trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Vietnam-Japan Economic Partnership Agreement (VJEPA).

Strategic Location: Situated in the heart of Southeast Asia, Vietnam serves as an ideal gateway for accessing other ASEAN countries, as well as major markets like China.

Types of Business Structures for Japanese Companies in Vietnam

When setting up a company in Vietnam, Japanese investors have several options for structuring their business. The main types of business entities include:

1. Wholly Foreign-Owned Enterprise (WFOE): A WFOE allows a Japanese company to operate in Vietnam without the need for a local partner. It provides full control over business operations, making it a popular choice for Japanese companies in sectors like manufacturing, retail, and technology.

2. Joint Venture (JV): A joint venture involves partnering with a local Vietnamese business. This structure is often chosen by Japanese companies that want to leverage local knowledge, distribution networks, or government connections. Both parties share profits, risks, and responsibilities in the venture.

3. Representative Office: A representative office is ideal for companies that wish to explore the market, conduct research, or promote their products without directly engaging in sales or business activities. This option is frequently used for market entry and brand awareness.

4. Branch Office: A branch office is an extension of a parent company and can conduct limited business activities such as marketing and sales, but it is not allowed to engage in direct profit-generating operations in Vietnam. It’s a suitable option for businesses looking to establish a presence without full-scale operations.

Key Steps to Set Up a Japanese Company in Vietnam (2025)

1. Conduct Market Research and Feasibility Study when Establishing a Japanese Company

Before diving into the registration process, it is crucial to conduct comprehensive market research. This will help you understand consumer behavior, local competition, and market demand, and will guide you in selecting the most appropriate business sector for your operations in Vietnam.

2. Choose the Right Business Structure when Establishing a Japanese Company

Once you’ve gathered sufficient market data, the next step is to decide on your company’s legal structure. Your options include a wholly foreign-owned enterprise (WFOE), a joint venture, a representative office, or a branch office. Each structure comes with its own advantages and challenges, so it’s important to consult with legal and business experts to choose the best option for your specific needs.

3. Register Your Company Name when Establishing a Japanese Company

You must register your company name with the Department of Planning and Investment (DPI). The name must be unique, comply with Vietnamese regulations, and not conflict with other registered business names. It’s important to verify availability before proceeding.

4. Prepare Required Documents when Establishing a Japanese Company

The following documents are typically required for company registration in Vietnam:

Investment Registration Certificate (IRC)
Enterprise Registration Certificate (ERC)
Company Charter (Articles of Incorporation)
Lease Agreement for Office Space
Bank Account to Deposit Capital

Additionally, you may need to provide proof of your parent company’s financial standing, such as audited financial reports from Japan.

5. Apply for the Investment Registration Certificate (IRC)

Once you have prepared your documents, submit the Investment Registration Certificate (IRC) application to the DPI. This certificate grants approval for foreign investors to set up a business in Vietnam. The processing time typically ranges from 15 to 30 days, depending on the complexity of your investment.

6. Apply for the Enterprise Registration Certificate (ERC)

After obtaining the IRC, you can apply for the Enterprise Registration Certificate (ERC) from the DPI. The ERC confirms your business’s legal existence and provides details about your business activities, tax obligations, and business scope.

7. Open a Local Bank Account

You will need to open a local bank account in Vietnam to manage your company’s capital and operational expenses. The capital deposit requirement will depend on the type of business entity, but it generally ranges from USD 10,000 to USD 100,000 or more.

8. Register for Taxes and Social Insurance

As a foreign-owned business, you must register with the General Department of Taxation for the following taxes:

Corporate Income Tax (CIT): The standard CIT rate in Vietnam is 20%, but certain sectors may qualify for tax incentives.

Value Added Tax (VAT): VAT applies to most goods and services, with a standard rate of 10%.

Social and Health Insurance: If you hire local employees, you are required to contribute to their social security and health insurance through the Social Insurance Agency.

9. Obtain Necessary Licenses and Permits

Depending on the nature of your business, additional licenses or permits may be required, such as:

Import/Export License (for trading businesses)
Construction/Real Estate License (for construction-related projects)
Food Safety License (for food and beverage businesses)
Ensure that you apply for the appropriate licenses to comply with local regulations.

10. Start Your Operations

Once all registration and licensing requirements are complete, you can start your business operations in Vietnam. This includes setting up your office, hiring employees, and launching your products or services.

Costs of Setting Up a Japanese Company in Vietnam

The costs of setting up a Japanese company in Vietnam will vary depending on factors such as location, business sector, and company size. On average, here are some costs you can expect:

Legal and Registration Fees: Approximately USD 1,000 to USD 3,000 for the registration process, legal consultations, and obtaining business licenses.

Office Rent: Office rental costs in major cities like Ho Chi Minh City or Hanoi range from USD 500 to USD 3,000 per month, depending on location and size.

Employee Salaries: Skilled workers typically earn between USD 500 and USD 2,000 per month, while unskilled labor tends to earn less.

Initial Capital Investment: The initial capital investment required for registration may range from USD 10,000 to USD 100,000 or more, depending on the nature of the business.

Legal Considerations for Japanese Investors in Vietnam

When setting up a business in Vietnam, it is important to consider the following legal aspects:

Foreign Ownership: Most sectors in Vietnam allow 100% foreign ownership, but certain industries such as banking, media, and telecommunications may require joint ventures with local partners.

Labor Laws: Vietnam has strict labor protection laws that govern employee rights, including minimum wages, social security, and insurance benefits.

Taxation: The corporate income tax rate in Vietnam is typically 20%. However, certain sectors like manufacturing and high-tech industries may qualify for tax incentives.

Legal Services for Foreign Investment by La Défense Law Firm

If you’re a Japanese investor looking to establish a company in Vietnam, La Défense Law Firm offers expert legal services that can guide you through the entire process. We specialize in providing comprehensive legal support for foreign investment in Vietnam, including:

Investment Consulting and Company Formation: We assist in business registration, selecting the most suitable business structure, and providing detailed guidance on local regulations.

Contract Drafting and Negotiation: Our team can help draft and negotiate investment contracts, labor agreements, commercial contracts, and other business-related documents.

Tax and Social Insurance Registration: We guide you through the process of tax registration, ensuring compliance with corporate tax laws, VAT, and social insurance regulations.

Dispute Resolution: La Défense helps resolve disputes related to labor issues, commercial agreements, and business operations in Vietnam.

Why Choose La Défense Law Firm?

Here’s why you should consider La Défense Law Firm as your trusted legal partner for setting up your Japanese business in Vietnam:

Extensive Experience: With over 10 years of experience in Vietnam, our lawyers are highly knowledgeable about the legal landscape and foreign investment regulations.

Comprehensive Services: We offer a full range of legal services, from company formation to post-setup legal support, ensuring your business is fully compliant with Vietnamese laws.

Expert Team: Our legal team consists of experienced lawyers with a deep understanding of both international and Vietnamese business law.

Strong Government Relations: La Défense maintains strong connections with local authorities, which helps streamline the registration process and ensures your business is established smoothly.

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