Pre-Entry Support for Vietnam Market Entry

Background and Challenges

In recent years, Japanese investment into Vietnam has continued to expand significantly, with Japanese companies establishing a growing presence across the northern, central, and southern regions of the country — particularly in Ho Chi Minh City, Hanoi, and Da Nang. While the spread of the internet has made market information far more accessible than in the past, many Japanese companies still tend to base their investment decisions on "information obtained through existing personal networks." While this is the most familiar entry point when venturing into a new country, this approach has led to business failure in no small number of cases. In practice, our firm has observed many cases of the following pattern. A former technical intern who once worked in Japan returns to Vietnam, begins hiring local staff through that personal network, and — acting on that individual's proposal — establishes a Vietnamese entity, only to be forced to shut the business down within a short period. The reasons vary: the business fails to perform as expected and becomes unprofitable, or misconduct by a trusted local staff member comes to light, among other issues. These outcomes are not unusual — they arise naturally from the following "structural factors." (1) Issues on the Vietnamese staff side - Having lived in Japan for an extended period, they lack sufficient understanding of, or experience with, Vietnam's current market environment and business customs. - Their background is as a "worker," not as someone with specialized knowledge of corporate management or administration. - Overconfidence arising simply from being "a fellow Vietnamese" leads to launching the business without adequate preparation or verification. (2) Issues on the Japanese company side In many cases, Japanese companies come to rely on limited information obtained from local staff before conducting comprehensive market research. - Objective limitations: a lack of information-gathering capability and experience means the market cannot be assessed from multiple angles. - Subjective bias: local staff may, based on their own personal objectives or preferences, share only information that is favorable to them. As a result, investment and hiring decisions end up being made on the basis of insufficient information, making it difficult to identify risks at an early stage.

Services We Provide

Our firm works together with market research and public-opinion survey firms, investment strategy consultancies, and accounting and tax service providers to deliver to our clients "the most comprehensive report available for grasping every aspect of an investment in Vietnam in a single package." This enables Japanese companies to obtain, without omission and in a clear, practice-oriented format, all of the information needed to make sound investment decisions in Vietnam. Specifically, we provide the following services. 1. Preparation of market reports We systematically organize information directly relevant to your business — market size, competitive landscape, demand trends, applicable regulations, and infrastructure conditions in the target region and industry — and provide the data needed for decision-making. 2. Advice on investment strategy Drawing on the characteristics of the Vietnamese market, its legal framework, and regulatory trends, we support strategic decisions such as the optimal timing, structure, and region for your investment. 3. Support in designing your investment scheme (investment model) This is one of our firm's particular strengths and a service for which we consistently receive high praise from clients. Investment objectives, business content, and existing business ecosystems (partner relationships, group companies, customer base, etc.) vary greatly from company to company. For this reason, a uniform approach — simply "incorporating an entity" or "signing the same type of contract" as everyone else — is not necessarily effective. We carefully analyze your specific circumstances and propose an optimal investment scheme that simultaneously satisfies the following requirements: - Full compliance with Vietnamese law - Minimized tax, accounting, and administrative costs - Maximum use of your existing ecosystem (business partners and supply chain) - A structure that is realistic and workable in day-to-day operation 4. Tax and accounting advice Depending on the investment model proposed, we organize the necessary tax treatment, accounting arrangements, transfer pricing (TP) considerations, and the treatment of dividends and royalties, and provide practical advice for conducting your business operations in Vietnam appropriately and efficiently.