Vietnam has become an appealing market for foreign investors due to the steady growth in the manufacturing sector. This article will give you an overview of how you can enter the market by setting up a manufacturing company in Vietnam.
Table of contents
Minimum requirements for a manufacturing company in Vietnam
In general, there is no minimum capital requirement for setting up a manufacturing company in Vietnam.
However, the authorities will determine the approval of the investment based on whether or not the amount of your capital covers your planned activities.
For example, if you want to establish a factory for producing craft beer, you must have sufficient funds to build it. You cannot do that with an unrealistic capital of only 1,000 USD, the capital should be based on the actual necessities.
What comes to shareholding, the maximum allowed foreign ownership for manufacturing companies in Vietnam is 100%.
For more information on this matter, have a look at our article about the minimum capital requirement in Vietnam.
Types of legal entities available for foreigners in Vietnam
Two most common legal entity types for foreign investors in Vietnam are a limited liability company (LLC) and a joint-stock company (JSC).
For small to medium-sized businesses, setting up a limited liability company would be the most suitable option. The corporate structure of an LLC is simple and it can have 1 to 50 members.
On the other hand, establishing a joint-stock company would be the best option for medium to large-sized businesses. It has a more complex structure than a limited liability company. However, as opposed to an LLC, joint-stock companies have shareholders instead of members.
How to set up a manufacturing company in Vietnam
In general, the process of setting up a manufacturing company in Vietnam is the same as for any other foreign investment company.
However, there are some additional licenses and special requirements for manufacturing companies.
#1 Investment registration certificate
First of all, you must obtain an investment registration certificate from the Department of Planning and Investment. The investment license allows you to conduct business activities in Vietnam.
#2 Business registration certificate
Secondly, you need to apply for a business registration certificate. After the Department of Planning and Investment has issued the certificate you have 90 days to make the capital contribution.
#3 Licenses and requirements
Thirdly, you may need additional licenses or submit some reports. This depends on the business line, products that will be manufactured, and whether the production will have an impact on the environment.
- Construction permit – in case you intend to build a new factory or a warehouse
- Fire protection and fire safety license
- Certificate of Food Safety
- Certificate of Food Safety knowledge
- Announcement of technical regulations conformity
- Register an Environmental Impact assessment report
Setting up a manufacturing company in Vietnam can take up to four months, including the acquisition of all the necessary licenses for production.
Fortunately, you do not need to worry about the paperwork or communication with the state authorities. Emerhub will handle all the necessary procedures of company registration in Vietnam on your behalf.
Manufacturing company registration timeline in Vietnam
Location of a manufacturing company
In general, there are no restrictions on the location of the factory. You can establish your manufacturing company either inside an industrial zone or outside of it.
However, the benefit of an industrial zone is that it already has the necessary infrastructure, such as water and waste systems. Therefore, your factory would already be in compliance with the requirements.
Special requirements for a manufacturing company in Vietnam
There are three general requirements manufacturing companies need to fulfil:
- Register the environment impact assessment or the environmental protection plan (depending on the scale of the project)
- Obtain the certificate of land use
- Obtain the construction permit
However, depending on the business line, there are additional requirements for some manufacturing companies. For example:
Some examples of the specific requirements
Tax reporting in Vietnam
After the incorporation, your foreign-owned company must follow reporting requirements in order to comply with the local law.
For example, quarterly taxes include value-added tax, personal and corporate income taxes. The business license tax is paid once a year.