Vietnam Manufacturing Companies: How to set up a Company in Vietnam

Vietnam’s burgeoning manufacturing sector plays a pivotal role in its export-driven economy, attracting international companies with favourable conditions for foreign ownership. The experts at Ecovis Vietnam advise what you need to know before establishing a manufacturing company in Vietnam.

Manufacturing is one of Vietnam’s fastest developing industries and has been improving steadily, leading many international companies to set up manufacturing plants in Vietnam. According to Statista1, the value of Vietnam’s manufacturing sector was approximately USD 94.6 in 2022, equivalent to a quarter of the country’s total Gross Domestic Product (GDP).

Manufacturing is also the main contributor to Vietnam’s export-oriented economy, with mobile phones and parts, electronics, garments, textiles and footwear among the main products manufactured in Vietnam. These products accounted for more than 80 per cent of Vietnam’s total export value. The manufacturing sector therefore plays a vital role in Vietnam’s economic development and trade balance.

Vietnam’s manufacturing sector is flourishing, and Ecovis is here to provide you with the essential steps and insights to make your journey a success, backed by our expert guidance.

What should you know before incorporating your manufacturing company and the relevant legal procedures for setting up a manufacturing company in Vietnam?

1. Embrace Foreign Ownership

Did you know? In Vietnam’s manufacturing sector, foreign investors enjoy the privilege of full ownership. It’s a welcome environment designed to encourage international collaboration and investment.

2. Finding the Right Legal Structure

Choosing the best legal structure for your business is crucial. Whether you opt for a Limited Liability Company (LLC) or a Joint-Stock Company (JSC), we will guide you through the legal requirements and tax implications so that you can make an informed decision.

3. Selecting the Ideal Location

Location matters! From land availability to tax incentives, we will help you navigate the factors that will impact your choice of factory location. Explore Vietnam’s industrial zones, each tailored to specific industries, to find the perfect fit for your manufacturing needs.

4. Factory Setup Process

5. Major taxes and investment incentives

Investment incentives are available to certain investment projects based on various factors, such as preferred investment sectors, geographical investment areas, investment capital, and labour demand. Investment projects that qualify for different levels of investment incentives can apply for the highest tax incentive.

6. Capital Investment Requirements

While there’s no minimum charter capital requirement for manufacturing companies, it’s essential to have sufficient capital resources (“investment capital”) to conduct your business activities successfully. The Ecovis experts will guide you through the process of obtaining the necessary investment registration certificate (IRC) and enterprise registration certificate (ERC), ensuring compliance with Vietnamese laws.

7. Employment Matters

Addressing employment matters is crucial for foreign investors establishing a manufacturing company in Vietnam. Our team will help you navigate local labour laws, ensure compliance and devise effective strategies for hiring and managing employees. We will also help you understand cultural nuances and language barriers to facilitate a smoother recruitment process and foster a positive working environment.

8. Dividends Distribution and Repatriate of Profit

Ecovis experts will guide you through the process of remitting dividends and distributing profits in accordance with Vietnamese law. We will ensure that all tax obligations and financial requirements are met before distributing profits to foreign investors, safeguarding the financial stability of your business.

Ready to take the next step? Contact Ecovis Vietnam today at quynh.vu@ecovislaw.vn or hotline +84 898 120 121. Let’s make your manufacturing venture in Vietnam a resounding success!

Reference sources

• https://www.statista.com

*Disclaimer: This newsletter provides informational guidance and does not constitute legal advice. For specific inquiries, consult with professional legal advisors of Ecovis.