ONE-VALUE Strengthens License Application Agency Services to Support Japanese Companies Entering Vietnam

ONE-VALUE Co., Ltd. (Headquarters: Koto-ku, Tokyo; Representative Director: Phi Hoa), a consulting firm that supports Japanese companies' expansion and business growth in Vietnam, is strengthening its on-site license application agency services in the country.

In Vietnam, starting a business requires obtaining an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC). Additionally, depending on the industry—such as retail, food and beverage, construction, education, healthcare, real estate, logistics, e-commerce, or labor dispatch—individual business licenses or sub-licenses are often necessary.

However, navigating Vietnam's licensing practices requires more than just reviewing legal provisions. A wide range of practical issues must be addressed, including defining the scope of business, selecting the appropriate business lines for application, verifying foreign ownership restrictions, ensuring capital adequacy, meeting location and office requirements, and dealing with varying local government practices and official inquiries.

Leveraging its expertise in a wide range of areas, including Vietnam market research, market entry support, M&A advisory, and its network with local companies and government agencies, ONE-VALUE is enhancing its license application services to help Japanese companies smoothly launch and expand their operations in Vietnam.

## Background for Service Enhancement

Vietnam is an attractive destination for Japanese companies across various sectors, including manufacturing, consumer goods, food and beverage, retail, education, healthcare, construction, real estate, logistics, IT, and renewable energy. However, a common challenge many companies face upon entry is the lack of transparency in licensing and administrative procedures.

Typically, establishing a local subsidiary in Vietnam involves deciding on the company form and business activities, obtaining an IRC, and then an ERC. This is followed by opening a bank account, registering for taxes and social insurance, handling labor contracts, and obtaining any necessary industry-specific permits.

A crucial point is that company establishment is not complete with just the IRC and ERC. To actually commence operations, multiple post-establishment tasks are required, such as securing additional industry-specific licenses, work permits for foreign expatriates, and completing tax, social insurance, and labor-related procedures.

For example, retail businesses may need a Trading License, food service businesses require food safety certifications, and construction companies need a construction activity capacity certificate. For foreign expatriates working long-term, the standard process is to obtain a Work Permit (or an exemption certificate) followed by a Temporary Residence Card.

In these procedures, the initial design is critical. It's not just about preparing application documents but also determining 'which licenses are needed,' 'which business codes to apply under,' 'whether the business activity is permissible for foreign-invested enterprises,' 'if the capital amount is deemed appropriate by authorities,' and 'if the property, office, or factory complies with the business purpose.'

## Common Challenges for Japanese Companies in Vietnam's License Application Process

- **Prolonged screening due to ambiguous business descriptions:** It's essential to confirm in advance which business lines the proposed activities fall under and if there are any conditions for foreign companies. Abstract descriptions can lead to requests for additional clarification, delaying the process.
- **Discovering the need for additional licenses after obtaining IRC/ERC:** Certain industries require sub-licenses before operations can begin. Overlooking these can lead to launch delays, extra costs, administrative penalties, or business suspension risks.
- **Capital amount or investment plan deemed inadequate:** Even if there's no legal minimum capital, authorities check if the amount is reasonable for the business plan. An extremely low amount may trigger requests for an increase or further explanation.
- **Choice of location affecting license acquisition:** The location and its intended use must be compatible with the business activities. Discovering a mismatch after signing a lease can hinder license acquisition.
- **Changes in administrative divisions or local government practices:** Ongoing administrative reforms in Vietnam can change contact points and procedures, sometimes causing delays if local officials lack clear guidelines.

In such an environment, proactive communication with relevant departments and responses aligned with administrative practices are crucial.

## Details of ONE-VALUE's Enhanced License Application Services

ONE-VALUE offers the following support to Japanese companies considering expansion into Vietnam:

1. **Pre-Establishment Research on Business Activities and License Requirements**
We review the planned business activities in Vietnam to identify necessary licenses, foreign investment restrictions, feasibility, required documents, estimated timelines, and risks. We break down the Japanese company's business model to align with Vietnam's legal system and administrative practices, determining the best application strategy.

2. **Support for IRC and ERC Acquisition**
We assist in obtaining the IRC and ERC required for establishing a local subsidiary. This includes support in preparing investor information, business plans, capital, company structure, legal representative details, articles of association, and other application documents, as well as managing submission and follow-up with local authorities.

3. **Support for Industry-Specific Sub-License Applications**
We provide assistance in obtaining additional licenses required for specific industries such as retail, food and beverage, construction, education, healthcare, real estate, logistics, e-commerce, and human resources.