Why Japanese Firms Hire Vietnamese Engineers (2026 Data)

Answer first: 56.9% of Japanese-affiliated companies in Vietnam plan to expand their operations over the next one to two years, the highest expansion appetite in ASEAN for the second consecutive year, against an ASEAN average of 46.8% (JETRO, FY2025 Survey on Business Conditions of Japanese-Affiliated Companies Overseas, 2025).

That intent is not abstract. It is being executed through engineering headcount, because the constraint Japanese firms face at home is people rather than capital: Japan’s Ministry of Economy, Trade and Industry projects a shortfall of roughly 790,000 IT professionals by 2030 (METI, Study of Recent Trends and Future Estimates Concerning IT Human Resources, cited by Nomura Research Institute, 2019).

This piece sets out what the published data says about why Vietnam has become the destination for that demand, what the arrangement costs, where the friction actually sits, and what it means if the team you are building works on blockchain.

Table of contents

1 Why is Japanese investment in Vietnam concentrating on engineering?
2 How large is Japan’s engineering shortfall?
3 What makes Vietnam Japan’s second-largest software partner?
4 What does a Vietnamese engineering team actually cost?
5 Where does blockchain fit into the Japan–Vietnam picture?
6 What does BlockchainWork’s Q3 2026 hiring data show?
7 What are the real friction points?
8 How should a Japanese employer structure a Vietnam team?
9 Frequently asked questions

Why is Japanese investment in Vietnam concentrating on engineering?

Answer first: because Japanese firms in Vietnam rate the market highly on exactly the two dimensions an engineering expansion needs, growth and cost, and they are acting on it faster than in any other ASEAN market.

In JETRO’s FY2025 survey, Japanese companies operating in Vietnam named market size and growth potential (68.4%), low labour costs (55.2%) and a stable socio-political situation (53.2%) as the leading attractions. On forward plans, 56.9% intend to expand, 38.2% to maintain current operations, 4.2% to scale down and 0.7% to relocate or withdraw. Looking at 2026 against 2025, 47.6% expect business conditions to improve (JETRO, 2025).

JETRO FY2025 findings: Japanese companies in Vietnam	Share
Plan to expand operations in the next 1–2 years	56.9%
Plan to maintain current operations	38.2%
Cite market size and growth potential as an attraction	68.4%
Cite low labour costs as an attraction	55.2%
Cite socio-political stability as an attraction	53.2%
Expect improved business conditions in 2026 vs 2025	47.6%

Source: JETRO, FY2025 Survey on Business Conditions of Japanese-Affiliated Companies Overseas (Asia and Oceania) (2025).

Read that table alongside the domestic picture and the logic closes. A company that cannot staff a project in Tokyo, and that already rates Vietnam first in the region on expansion appetite, does not run a lengthy site-selection exercise. It extends a relationship it already has.

How large is Japan’s engineering shortfall?

Answer first: METI’s long-running projection puts the gap at roughly 790,000 IT professionals by 2030, up from an estimated shortage of 170,000 in 2015 and around 370,000 by 2020 (METI, cited by Nomura Research Institute, 2019). The Vietnamese industry press works from the same figure, describing a forecast shortage of 800,000 IT personnel by 2030 (VietnamNet, 2026).

The demographics behind that number do not reverse inside a planning horizon, which is why the response has been structural rather than cyclical. Two channels are running in parallel.

The first is inbound. Foreign workers in Japan reached a record 2.57 million as of the end of October 2025, up 11.7% year on year, and Vietnamese nationals are the largest single group at 605,906 people, or 23.6% of the total (Japan’s labour ministry, reported by Tuoi Tre News / Jiji, January 2026; Nippon.com, February 2026). Workers holding residence status in specialised or technical fields now number about 870,000 across all nationalities (Nippon.com, 2026).

The second is offshore, and for software it is the larger of the two. That is the channel this article is about.

What makes Vietnam Japan’s second-largest software partner?

Answer first: two decades of accumulated relationships, and a shift in what Japanese clients actually delegate. Vietnam is now Japan’s second-largest software partner, and Le Quang Luong, Chair of the Vietnam–Japan IT Cooperation Committee, described “hundreds of thousands of Vietnamese engineers” as operating the arteries of Japan’s economy (VietnamNet, 2026).

The institutional layer is unusually thick for an outsourcing relationship. Japan ICT Day 2026 was held in Hanoi on 4 February 2026 under the auspices of Vietnam’s Ministry of Science and Technology, jointly organised by the Vietnam Software and IT Services Association (VINASA), the Vietnam–Japan IT Cooperation Committee (VJC), JETRO and the Japan Information Technology Services Industry Association (JISA). At that event VINASA and the VJC set out three directions for the next phase: moving from manpower outsourcing to AI-powered productivity partnerships, opening the Vietnamese domestic market to Japanese digital firms, and building two-way talent exchange mechanisms (VietnamNet, 2026).

The scope of the work has moved with it. VINASA dates the relationship to 2007, when exports to Japan were modest and largely low-cost outsourcing; Tran Anh Tu, Deputy Director General of the Department of IT Industry, described the partnership today as shifting “from outsourcing to co-creation, from technology transfer to joint mastery” (VietnamNet, 2026). For an employer evaluating the market today, that is the practical difference: you are choosing between partners who can co-own a product area, not only ones who can staff a sprint.

What does a Vietnamese engineering team actually cost?

Answer first: a mid-level engineer at the Vietnamese blockchain benchmark costs roughly VND 39 million per month fully loaded, about USD 1,500 once mandatory employer contributions and the customary thirteenth month are included.

The starting point is base salary. BlockchainWork’s analysis of 1,029 blockchain job listings from companies operating in Vietnam puts the average base for technical roles with three or more years’ experience at around VND 30 million per month, roughly USD 1,150 at an exchange rate near VND 26,000/USD (BlockchainWork, Vietnam Blockchain Job Market Report 2025, published 2026).

Line item	VND/month	USD/month
Base salary, technical role with 3+ years’ experience	30,000,000	~1,150
Employer social, health and unemployment contributions (21.5%)	6,450,000	~250
13th-month / Tet bonus, amortised	2,500,000	~96
Fully loaded	38,950,000	~1,500

Sources: BlockchainWork (2026) for base salary; employer contribution rates of 21.5% (17.5% social, 3% health, 1% unemployment) per LuatVietnam, Contribution rates from 2026 (2026). USD conversions at approximately VND 26,000/USD. Excludes equipment, workspace and any token or performance component. For role-by-role salary ranges, see BlockchainWork’s Vietnamese-language guide Lương blockchain Việt Nam 2026 (in Vietnamese). Contribution rates and ceilings are adjusted periodically; confirm the current position with a local payroll provider before finalising a budget.

Two operational factors matter as much as the number.

Time zone. Vietnam is UTC+7 and Japan is UTC+9. A two-hour offset means a Hanoi or Ho Chi Minh City team overlaps with Tokyo for effectively the whole working day: daily stand-ups, live incident response and same-day review cycles all work without anyone taking a call at midnight. Among offshore destinations available to Japanese firms, this is the operational advantage that is hardest to replicate at distance.

Depth of the pool, and its limits. Vietnam ranks among the fastest-growing open-source crypto developer communities in Asia (Electric Capital, Developer Report: Geography, data through 2026), but the JETRO survey also found that close to half of Japanese companies in Vietnam (48.2%) have found recruitment harder over the past two years. Cost advantage does not come with an easy hiring process attached.

Where does blockchain fit into the Japan–Vietnam picture?

Answer first: Japan has made Web3 an explicit policy priority, and the engineering demand that policy creates is landing in the same offshore channels that already run between Tokyo and Hanoi.

The clearest marker is legislative. On 15 July 2026 Japan’s Diet gave final approval to the Bill for Partial Amendment of the Financial Instruments and Exchange Act and the Payment Services Act, which moves roughly 105 crypto-assets, Bitcoin and Ether among them, out of the Payment Services Act and into the Financial Instruments and Exchange Act under a new “specified cryptoassets” category, with stablecoins carved out and left under the PSA. The reclassification targets fiscal 2027 for full effect, and the separate 2026 Tax Reform Outline targets a flat 20.315% rate (15% national, 5% local) on gains from specified cryptoassets traded on FSA-licensed exchanges, projected to apply to individual traders from 1 January 2028 (TFTC, 2026). Building products against a defined regulatory category creates engineering work (compliance reporting, custody, exchange integration), and that work needs staffing. BlockchainWork covered the industry side of this shift in WebX 2026 Tokyo: when Japan places Web3 at the center of national strategy.

The Vietnamese side of that pairing has its own regulatory foundation. The Law on Digital Technology Industry (No. 71/2025/QH15), effective 1 January 2026, defines digital assets and crypto-assets in law, and Resolution 05/2025/NQ-CP pilots a regulated crypto-asset market. For a Japanese employer building a blockchain product with a Vietnamese engineering team, that combination, a policy-backed home market and a legally defined offshore base, is newer than the offshore relationship itself.

BlockchainWork sits directly on this corridor: the company is a member of the Japan Blockchain Association, an honorary member of the Vietnam Blockchain Association, and closed its Seed 2 round at USD 142,000 from Japanese investors (announcement, 2026).

What does BlockchainWork’s Q3 2026 hiring data show?

Answer first: demand on the Vietnamese side is rising, and it is shifting towards mid-level, business and AI-related roles. On BlockchainWork’s job board, blockchain, Web3 and tech job listings in Q3 2026 rose 22.2% from Q2, and advertised positions rose 28.2% (BlockchainWork, Vietnam Blockchain Talent Report 2026, 2026).

BlockchainWork job board, Vietnam	Q2 2026	Q3 2026
Engineering share of listings	47.7%	41.2%
Marketing, sales and finance share	22.2%	33.7%
Listings mentioning AI, machine learning or data engineering	4.6%	7.5%
Listings asking for more than 5 years’ experience	10.5%	4.8%
Hanoi share of listings	49.7%	59.4%

Source: BlockchainWork job board, approved listings Q2-Q3 2026, published in the Vietnam Blockchain Talent Report 2026 (2026).

Three implications for a Japanese employer planning a Vietnam team. First, competition for engineers is rising while the market grows, so the JETRO finding that recruitment is getting harder is likely to hold through 2027. Second, senior-level listings fell to under 5% while about 7 in 10 listings asked for 1-5 years’ experience: most of the available pool is mid-level, so plan for a small senior core plus mentoring rather than an all-senior team. Third, companies are moving from building products to taking them to market, which means a Vietnam hub may need business development, marketing and community roles alongside engineering.

What are the real friction points?

Answer first: three, and none of them is cost. Recruitment difficulty, language expectations, and retention.

Recruitment has become harder, not easier. Nearly half of Japanese companies in Vietnam (48.2%) reported that recruitment has become more difficult over the past two years (JETRO, 2025). The market rewards employers who move quickly and run a clear process; a four-week decision cycle loses candidates to a two-week one regardless of the salary at the end of it.

Language. Requiring Japanese across a whole engineering team narrows an already competitive candidate pool. The practical answer most Japanese firms reach is a bridge-engineer or bridge-SE layer with the language requirement, and English as the working language for the rest of the team.

Retention. In BlockchainWork’s 2025 survey of Vietnam’s blockchain workforce, 48% of candidates had spent under one year at each company and only 13% stayed beyond three years. Asked what moves them, they named salary (68%), skill development opportunities (66%) and quality of leadership (45%), in that order (BlockchainWork, 2026). Vietnam’s tech market also has a pronounced post-Tet movement period, with resignations clustering after the Lunar New Year holiday, which puts reviews, bonuses and promotions in the quarter before that window, not after it.

How should a Japanese employer structure a Vietnam team?

The decision is less about whether to hire in Vietnam than about which layer of the relationship you want to own. Three arrangements are in common use: contracting a local development partner for a defined scope; building a dedicated offshore team through a partner while you direct the work; or hiring directly, through an Employer of Record or your own entity, when the team is intended to be permanent and to hold product knowledge.

Whichever layer you choose, the same three preparations decide the outcome: set the language requirement per role rather than across the team, plan a decision cycle short enough to compete for scarce candidates, and budget the fully loaded figure rather than the base salary.

One statutory detail worth building into the plan early: under Article 25 of Vietnam’s Labour Code No. 45/2019/QH14, probation is capped at 60 days for jobs requiring college-level or higher technical qualifications, which covers most engineering roles, and probationary pay must be at least 85% of the agreed salary. That is a shorter assessment window than many Japanese employers are used to, so the onboarding plan for the first two months has to be written before the first day, not after it.

For the complete picture on talent pool, hiring models, labour law and process, see our pillar guide: Hire Blockchain Developers in Vietnam: 2026 Employer Guide.

BlockchainWork is a specialised blockchain recruitment platform in Vietnam with 25,000+ registered candidates, 12+ educational institution MOUs and 350+ hiring companies. Create an employer account at blockchainwork.net/employer-signup to post roles and reach engineers already working in blockchain and Web3, or contact our team (contact@blockchainwork.net) to discuss what a realistic team structure and timeline look like for the roles you are planning. For the latest quarterly data, read our Vietnam Blockchain Talent Report 2026.

Frequently asked questions

1. How many Japanese companies in Vietnam are expanding in 2026?

JETRO’s FY2025 survey found that 56.9% of Japanese-affiliated companies in Vietnam plan to expand operations over the next one to two years, the highest share in ASEAN for the second consecutive year and above the ASEAN average of 46.8%. A further 38.2% plan to maintain current operations, while 4.2% plan to scale down and 0.7% to relocate or withdraw (JETRO, 2025).

2. Why do Japanese companies use offshore development in Vietnam rather than hiring at home?

Because the domestic pool cannot cover the demand. METI projects a shortfall of roughly 790,000 IT professionals in Japan by 2030 (cited by Nomura Research Institute, 2019). Vietnam is now Japan’s second-largest software partner, and the two countries’ IT associations are moving the relationship from manpower outsourcing towards AI-powered productivity partnerships (VietnamNet, 2026).

3. What does a Vietnamese engineer cost a Japanese employer?

For a technical role with three or more years of experience, the Vietnamese blockchain benchmark base is around VND 30 million per month (roughly USD 1,150). Adding 21.5% in mandatory employer contributions and an amortised thirteenth-month bonus brings the fully loaded figure to roughly VND 39 million, or about USD 1,500 per month (BlockchainWork, 2026; Vietnamese social insurance rates in force from 2026). Equipment, workspace and any token or performance component sit on top.

4. How much time-zone overlap is there between Japan and Vietnam?

Two hours. Vietnam is UTC+7 and Japan is UTC+9, so a Vietnamese team overlaps with Tokyo for essentially the entire working day. Daily stand-ups, live incident handling and same-day code review all run synchronously without out-of-hours calls on either side.

5. Is Japanese language ability required for a Vietnamese engineering team?

Not across the whole team; requiring it everywhere shrinks the candidate pool unnecessarily. The usual structure is a bridge-engineer layer carrying the Japanese requirement, with English as the working language for the rest of the team.

6. Is demand for engineers in Vietnam still growing in 2026?

Yes. On BlockchainWork’s job board, Q3 2026 listings rose 22.2% from Q2 and advertised positions rose 28.2%, while listings mentioning AI and data doubled as a share of the total (BlockchainWork, 2026).

7. What is the biggest risk when hiring in Vietnam?

Retention rather than cost. In BlockchainWork’s 2025 workforce survey, 48% of blockchain candidates had spent under one year at each company and only 13% stayed beyond three years, with salary (68%), skill development (66%) and leadership quality (45%) named as the reasons they move (BlockchainWork, 2026). Nearly half of Japanese companies in Vietnam (48.2%) also reported that recruitment has become harder over the past two years (JETRO, 2025).

Sources

BlockchainWork, Vietnam Blockchain Talent Report 2026: Q3 Job Market Trends (2026): https://insider.blockchainwork.net/en/vietnam-blockchain-talent-report-2026
JETRO, FY2025 Survey on Business Conditions of Japanese-Affiliated Companies Overseas (Asia and Oceania) (2025)
JETRO, FY2025 Survey on Business Conditions of Japanese-Affiliated Companies Overseas (Global Edition) (2025)
The Investor, Japan firms in Vietnam most willing in Southeast Asia to expand operations: JETRO survey (2026)
VietnamNet, Vietnam’s software engineers power Japan’s digital backbone (2026)
Tuoi Tre News (Jiji), Foreign workers in Japan hit record 2.57 million (2026)
Nippon.com, Japan’s Foreign Workforce Rises to Record 2.6 Million (2026)
Nomura Research Institute, Shortage of IT Human Resources in the Digital Era, citing METI estimates (2019)
BlockchainWork, Vietnam Blockchain Job Market Report 2025 – Outlook for 2026 (2026): https://insider.blockchainwork.net/en/blockchainwork-releases-vietnam-blockchain-job-market-report-2025-outlook-for-2026
Electric Capital, Developer Report: Geography (data through 2026)
LuatVietnam, Employer and employee social, health and unemployment insurance contribution rates from 2026 (2026)
Labour Code No. 45/2019/QH14, Article 25 (probation)
TFTC, Japan’s Diet Passes FIEA Amendment, Cuts Crypto Tax and Opens ETF Path (2026)
LuatVietnam, Law on Digital Technology Industry No. 71/2025/QH15 (2025)
Vietnam Government Portal, Resolution 05/2025/NQ-CP on piloting the crypto-asset market in Vietnam (2025)

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