Market Scale and Strategic Importance

Vietnam’s labor export market to Japan has experienced sustained growth, positioning Japan as the largest destination for Vietnamese overseas workers. In the first 11 months of 2023, 74,354 Vietnamese workers migrated to Japan, accounting for nearly 51% of Vietnam’s total outbound labor force (Government News, 2025). Throughout 2023–2024, Japan consistently maintained a 46–50% market share, reflecting deep and growing economic interdependence between the two countries (VnExpress, 2024).

However, focusing solely on annual outbound flows (70,000–80,000 workers per year) underestimates the true scale of the remittance market. A more critical factor is the existing Vietnamese labor community in Japan, which surpassed 518,346 people in early 2024, accounting for 25.3% of Japan’s total foreign workforce (VnExpress, 2024). This makes Vietnamese workers the largest foreign labor group in Japan, overtaking Chinese workers and forming the backbone of a stable, recurring remittance flow to Vietnam.

Key Labor Programs and Financial Behaviors

The structure of the Vietnamese working community in Japan is becoming increasingly diverse, with a clear distribution among different visa groups. Statistics show that Technical Interns account for the largest number (about 183,677 people), followed by Specified Skills (97,485 people) and Engineers (87,904 people) (Doslink, 2025). Each of these groups has distinct income levels, length of stay, and financial needs, creating different market segments.

The two key and largest programs are the Technical Intern Trainee Program (TITP) and the Specified Skills Program (Tokutei Gino). The TITP program, established in 2012, has relatively low entry requirements (mainly high school graduation) and focuses on the goal of "studying and improving skills". TITP salary usually ranges from 25-32 million VND/month. Due to constraints such as not being allowed to change companies and not being able to sponsor family, the "financial life cycle" of a trainee is often short-term, with the core goal being to maximize cash accumulation to send home to pay off exit costs and support the family's economy. They are the core customers of traditional C2C money transfer services.

In contrast, the Specified Skills Program, implemented since April 2019, marks a qualitative change in Japan's labor reception policy. This program has higher entry requirements, requiring specialized skills and Japanese language proficiency. In return, workers receive higher salaries (equivalent to Japanese people of the same level), the right to change jobs within the same industry, and have the opportunity to settle permanently as well as sponsor relatives to Japan if they are transferred to the Specified Skills Category 2.

A monthly financial picture clearly shows savings goals and urgent need for funds. Cash flow is a minimum base salary of around 140,000 to 180,000 JPY/month, which can be increased by overtime pay. Cash outflow includes required deductions and monthly living expenses. After deducting the total fixed costs (estimated at 31,000 JPY to 67,500 JPY), a worker can save a significant net amount, ranging from 70,000 JPY to over 140,000 JPY per month (Doslink, 2025).

Beyond C2C: New Labor Segments Driving Change

While C2C remittances remain dominant, new labor models are redefining the corridor. Remote employees working for Japanese firms face complex challenges related to tax withholding, social insurance, and legal compliance across jurisdictions. At the same time, freelancers and digital content creators benefit from flexible income sources but struggle with irregular cash flows, self-declared taxation, and limited institutional support in Vietnam.

These segments remain largely underserved by traditional remittance providers, which focus primarily on transaction speed and cost. This creates a strategic opportunity for fintechs to deliver integrated cross-border solutions that combine remittances, tax automation, compliance support, and financial management tools tailored to B2C and C2B income models.

Remittance Flow and Economic Impact

Although country-specific data on Japan–Vietnam remittances remains limited, macro-level indicators show strong and sustained growth.

In 2025, remittances to Ho Chi Minh City are estimated to reach approximately USD 10.5 billion, representing an increase of over 10% year-on-year, reinforcing remittances as one of the city’s most stable and significant sources of foreign capital (VnEconomy, 2025).

Previously, remittances to Ho Chi Minh City reached nearly USD 9.6 billion in 2024, while in the first nine months of 2025 alone, inflows through formal channels amounted to USD 7.97 billion (CafeF, 2025). Asian markets account for 53.8% of total remittances and recorded the highest growth rate at +24.1% YoY, reinforcing Asia and Japan in particular, as a central pillar of Vietnam’s remittance ecosystem (CafeF, 2025). Vietnamese workers in Japan alone are estimated to remit approximately USD 3 billion annually, highlighting Japan’s strategic importance despite the lack of official bilateral data (Tuổi Trẻ, 2023).

Competitive Landscape

The Vietnam-Japan remittance market is highly competitive and evolving quickly. Traditional banks and post offices such as Yucho Bank are trusted but hampered by high fees, paperwork-heavy processes, and mandatory currency conversions from yen to U.S. dollars before transfers. Western Union, while fast and convenient for recipients, charges prohibitively high fees, making it impractical for monthly savings transfers. Fintech challengers such as Smiles and DCOM have disrupted the market by offering lower fees, competitive exchange rates, faster delivery times, and intuitive mobile apps in Vietnamese.

Their real competitive advantage, however, lies in solving the “last-mile deposit” problem. By integrating with Japan’s retail payment infrastructure-including ATMs, convenience store networks, and supermarkets-they have made it seamless for workers to load cash into remittance systems. As fees and rates converge, the competition is increasingly shifting toward user experience and value-added services like tax refund receipts, loyalty programs, and round-the-clock Vietnamese-language support.

The Vietnam-Japan remittance corridor is evolving into a more complex and segmented ecosystem, far beyond simple transfers. Success in this market will depend on the ability of service providers to identify and resolve hidden pain points that traditional channels have ignored. For fintechs, the most promising pathway lies in targeting freelancers and content creators, offering tax automation and compliance support as part of core services. Once these customer bases are secured, providers can extend their brand into skilled labor markets with more sophisticated financial needs. For investors, the real value is not in companies that compete only on fees but in those that solve structural challenges such as taxation and regulatory compliance. Policymakers, meanwhile, can enable market growth by making remittance data more transparent and simplifying cross-border income tax procedures, particularly for individuals in the digital economy.

Conclusion: From Transfers to Transformation in Cross-Border Finance

The remittance market between Vietnam and Japan is no longer defined by traditional labor transfers alone. It is a dynamic ecosystem shaped by diverse worker segments, from short-term technical interns to permanent residents, and increasingly by remote employees and digital freelancers. Each group exhibits distinct financial behaviors and regulatory challenges.

The next phase of growth will be led by providers that move beyond cost competition to deliver integrated solutions combining remittance, compliance, and financial management into a seamless experience. For Vietnam and Japan alike, this market represents not only a financial lifeline but also a strategic bridge for deeper economic integration in the era of digital labor mobility.