Japanese investors set up a company in Vietnam

The economic cooperation between Vietnam and Japan began in the 1990s and has been growing strongly since then. With strong investment in fields such as automobile, electronics and mechanical manufacturing, Japanese businesses have made an important contribution to the process of industrialization and modernization of the country. Famous brands such as Toyota, Honda, Panasonic have become familiar to Vietnamese consumers. In addition, Japan is also one of the largest ODA donors to Vietnam, supporting infrastructure development and improving the competitiveness of the economy. For Japan, Vietnam is a potential market with a young, dynamic workforce and competitive production costs, helping Japanese businesses expand their markets and global supply chains. Viet An Law would like to guide customers through the procedures for Japanese investors to establish a company in Vietnam through the article below.

Legal Basis

• Law on Investment 2020 and related guiding documents;
• Law on Enterprises 2020 and related guiding documents;
• WTO Schedule of Commitments on Services.
• Vietnam-Japan Economic Partnership Agreement (VJEPA)

Why do Japanese investors choose Vietnam to set up a company?

There are many factors that attract Japanese investors to Vietnam, including:

• Abundant workforce: Vietnam has a young, dynamic workforce and competitive labor costs.
• Large and growing domestic market: With a young population and rising incomes, Vietnam is a potential consumer market for many products and services.
• Attractive investment incentive policies: The Vietnamese government has issued many investment incentive policies to attract foreign capital, creating favorable conditions for foreign investors.
• Favorable geographical location: Vietnam is located in the center of Southeast Asia, which is convenient for trade and export of goods.
• Good cooperative relationship: The history of friendship and cooperation between Vietnam and Japan has built confidence among Japanese investors.

So, in what forms can Japanese investors invest in Vietnam?

– Japanese investors can invest in Vietnam by establishing a Japanese capital company or registering to buy shares or buy contributed capital.

Compare the pros and cons between the two forms of investment

Japanese investor establishes new economic organization in Vietnam

Step 1: Apply for a Japanese Investor Investment Certificate (IRC)

• Written request for implementation of the investment project;
• An investment project proposal includes the following contents: the investor implementing the project, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, investment schedule, labor demand, proposal for investment incentives, impact assessment, etc socio-economic efficiency of the project;
• Dossier proving the company’s head office: Lease contract, Notarized copy of real estate documents of the lessor: Land use right certificate, Construction permit; if the lessor is a company: It is necessary to provide a copy of the enterprise registration certificate with the function of real estate business;
• Confirmation of account balance corresponding to the capital intended to establish an FDI company is consular legalized and notarized

Depending on whether the investor is an individual or a legal entity, it will be necessary to provide the following additional documents:

Place of application: Department of Planning and Investment where the head office is expected to be located.

Processing order: Within 15 days from the date of receipt of a complete and valid dossier, the Department of Planning and Investment will issue an Investment Registration Certificate to the foreign investor. In case of refusal, the Department of Planning and Investment will reply in writing and clearly state the reason.

Step 2: Apply for an Enterprise Registration Certificate (ERC)

• Application for enterprise registration;
• Charter of the enterprise;
• List of members of a limited liability company with two or more members or a list of general partners;
• A notarized copy of the identity card or valid passport of the individual member; a notarized copy of the enterprise registration certificate of the member being an organization; a notarized copy of the valid identity card or passport of the legal representative of that organization;
• The investment registration certificate of the Japanese investor has been completed above.

Place of application: Department of Planning and Investment where the enterprise is headquartered.

Duration: 03 – 06 working days.

Dossier of registration for purchase of contributed capital and shares of a Vietnamese company

• Written registration of capital contribution, purchase of shares, purchase of contributed capital (according to Form A.I.7 issued together with Circular 25/2023/TT-BKHDT).
• Written agreement in principle on capital contribution, share purchase or purchase of contributed capital between foreign investors and economic organizations with foreign investors contributing capital, purchasing shares or purchasing contributed capital.
• Copies of legal papers of individuals and organizations contributing capital, purchasing shares, purchasing contributed capital; and of economic organizations with foreign investors contributing capital, buying shares, buying contributed capital.
• In case of necessity, the External Economic Relations Division may request the supply of a copy of the land use right certificate of the economic organization to which foreign investors contribute capital, purchase shares or purchase contributed capital.

Place of application: Department of Planning and Investment where the head office is expected to be located.

Processing order: Within 15 days from the date of receipt of a complete and valid dossier, the Department of Planning and Investment will issue a written confirmation of the purchase of contributed capital to the foreign investor. In case of refusal, the Department of Planning and Investment will reply in writing and clearly state the reason.

Customers who need to support the procedures for Japanese investors to establish a company in Vietnam, please contact Viet An Law for the fastest support!