Conditions and Procedures for Establishing a Japanese Company in Vietnam

Establishing a Japanese company in Vietnam is a strategic choice pursued by many Japanese enterprises, especially as Vietnam continues to assert itself as an attractive investment destination in Southeast Asia. With an increasingly transparent legal environment, abundant labor force, and favorable geographical location, Vietnam offers numerous business opportunities for foreign investors in general and Japanese investors in particular. However, to establish a company legally and effectively, Japanese investors must understand the legal conditions, licensing procedures, and specific regulations related to business sectors, investment capital, and compliance obligations. This article provides an in-depth analysis of Vietnam’s current legal provisions regarding the establishment of a Japanese company, covering investment forms, legal requirements, and detailed procedural steps.

Legal Framework

• Law on Investment 2020 (Law No. 61/2020/QH14)

• Law on Enterprises 2020 (Law No. 59/2020/QH14)

• Decree No. 31/2021/ND-CP guiding the Law on Investment

• Decree No. 01/2021/ND-CP on enterprise registration

• International treaties between Vietnam and Japan, such as the Vietnam–Japan Economic Partnership Agreement (VJEPA) and CPTPP

Forms of Investment by Japanese Investors in Vietnam

Japanese investors may choose from the following forms:

• Establishing a new economic organization (a 100% Japanese-owned company or a joint venture with a Vietnamese partner)

• Contributing capital, purchasing shares or capital contributions in existing Vietnamese enterprises

• Business Cooperation Contracts (BCC)

Among these, the most common form is setting up a limited liability company or joint-stock company with foreign capital.

Conditions for Establishing a Japanese-Invested Company in Vietnam

a) Legal Status and Financial Capacity of the Investor
The investor must be a Japanese legal entity or individual with full legal capacity and must prove the lawful origin of the investment capital in Vietnam.

b) Conditions Regarding Business Sectors
The intended business activity must not fall under the prohibited sectors as per the Investment Law. If it is a conditional business sector, the investor must meet all relevant conditions. Special attention is required for sectors involving WTO commitments or international treaties such as logistics, education, healthcare, and telecommunications, where ownership ratios and permissible investment forms may vary.

c) Project Location
The investor must secure a specific project location. The location must align with land use planning and have valid legal documentation (e.g., lease agreements or preliminary site agreements).

d) Minimum Investment Capital
Vietnamese law does not impose a general minimum capital requirement for all business types, except for sectors with statutory capital requirements. However, the proposed capital must demonstrate project feasibility and match its scale.

Procedure for Establishing a Japanese-Invested Company in Vietnam

This process includes two main stages:

Stage 1: Obtaining the Investment Registration Certificate (IRC)
Applicable to foreign investors investing in Vietnam for the first time.

Required documents include:

• Written request to implement the investment project

• Copy of passport (for individuals) or Business Registration Certificate (for Japanese legal entities)

• Investment project proposal stating the project scale, location, total capital, and duration

• Financial capacity documentation (bank statements, financial reports, capital commitment from the parent company, etc.)

• Lease contract or site agreement

• Other documents depending on the specific business sector

Issuing authority: Department of Planning and Investment of the province where the company is based
Processing time: approximately 15–20 working days

Stage 2: Obtaining the Enterprise Registration Certificate (ERC)
After obtaining the IRC, the investor proceeds to register the enterprise.

Required documents include:

• Application for enterprise registration

• Company charter

• List of members or shareholders

• Legal identification documents of the investor

• Copy of the granted IRC

Processing time: approximately 3–5 working days

Post-registration Requirements

• Company seal engraving and notification of the seal sample

• Opening a corporate bank account and notifying the Department of Planning and Investment

• Initial tax registration, application for digital signature, and e-invoice issuance

• Capital contribution according to the committed timeline in the IRC (no later than 90 days from the ERC issuance date)

• Obtaining additional business licenses (if required)

Important Notes for Japanese Investors

• It is recommended to carry out procedures through an experienced legal consultancy firm to ensure compliance and avoid application rejection due to omissions

• Profit repatriation is permitted by Vietnamese law once the company has fulfilled its financial obligations

• Investors must submit periodic investment activity reports to the Department of Planning and Investment

• The investment project duration is specified and can be extended if necessary

Investment Support Services in Vietnam from BKC Law

With a team of experienced lawyers in foreign investment, BKC Law offers comprehensive legal consulting services specifically for foreign investors, especially Japanese businesses. We accompany investors from the market research stage and choosing the right investment form, to preparing documentation, obtaining the Investment Registration Certificate (IRC), the Enterprise Registration Certificate (ERC), and other required licenses.

Our services include:

• Consulting on investment conditions for Japanese investors based on specific sectors

• Drafting and reviewing legal documents as required by the authorities

• Representing clients in dealings with the Department of Planning and Investment, tax authorities, banks, and other relevant agencies

• Guiding procedures for capital contribution, opening investment accounts, and profit repatriation

• Ongoing legal consulting after company establishment: taxation, contracts, labor, intellectual property

Contact BKC Law for in-depth investment consulting and to best protect your legal interests in Vietnam:

Phone: 0901 3333 41

Email: info@bkclaw.vn

Head Office (District 1): 9th Floor, Diamond Plaza, 34 Lê Duẩn, District 1, HCMC

Branch Office (Bình Tân): 41 Tên Lửa, Bình Tân District, HCMC

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