How to Start a Manufacturing Company in Vietnam: What Foreign Investors Need to Know

Are you looking to expand your manufacturing operations to Vietnam? According to the Asia Manufacturing Index 2026, Vietnam ranks third among Asia’s top manufacturing destinations, behind only China and Malaysia. The country’s competitive labor costs, political stability, and extensive free trade agreement network continue to draw foreign manufacturers looking to diversify their supply chains.

This guide covers the setup process for a foreign-owned manufacturing company in Vietnam, including the free trade agreements and incentives that benefit manufacturers, and the key requirements to consider before getting started.

Why Foreign Manufacturers Set Up in Vietnam

The case for Vietnam comes down to three structural factors that directly affect manufacturing economics.

Vietnam’s Free Trade Agreements that Benefit Manufacturers

Vietnam holds 16 active free trade agreements, making it one of the most trade-connected manufacturing hubs in Southeast Asia. FTAs reduce or eliminate tariffs on goods traded between Vietnam and partner countries, which directly lowers the cost of exporting finished goods and importing raw materials. 

The three most relevant for foreign manufacturers are:

• EU-Vietnam Free Trade Agreement (EVFTA): Provides preferential access to one of the world’s largest consumer markets, including Germany, France, Italy, and the Netherlands.
• UK-Vietnam Free Trade Agreement (UKVFTA): Maintains the trade benefits established under the EU framework for the British market.
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): Connects Vietnam to major economies including Japan, Canada, and Australia.

These agreements deliver zero or reduced export tariffs on finished goods, lower import duties on raw materials, and improved IP protection. For European-bound manufacturing, the EVFTA is the single most important advantage, with most industrial goods now entering the EU duty-free. 

However, one important consideration before committing to a sourcing model is whether your goods meet the relevant rules of origin. Under the EVFTA, for example, garments must use fabric woven in Vietnam or a qualifying partner country to qualify for zero duty. Your supply chain setup determines whether you can actually claim these benefits.

Streamlined Investment Framework

The Law on Investment 2025 took effect on 1 March 2026, replacing the 2020 framework. Two relevant changes for most foreign manufacturers include:

• ERC-first sequencing. Foreign investors can now establish their company (Enterprise Registration Certificate or ERC) before obtaining the Investment Registration Certificate (IRC). Under the previous framework, the IRC had to come first. The new sequence lets you incorporate, sign leases, open bank accounts, and prepare for operations while the IRC application runs in parallel. The IRC must still be obtained within 12 months of ERC issuance.
• Special Investment Procedure (SIP) for industrial zones. Projects located in industrial parks, export processing zones, hi-tech zones, free trade zones, and functional areas within economic zones can use a simplified procedure that bypasses several pre-approval steps. The Management Board issues the IRC within 15 working days, and the project is exempt from investment policy approval, technology appraisal, environmental impact assessment, detailed planning, construction permit, and fire safety appraisals. These obligations are replaced by a compliance commitment subject to post-inspection.

This is the single biggest practical advantage of locating in an industrial zone. Setting up outside a designated zone typically requires 6 to 12 additional months of pre-approval steps.

Labor Costs and Skilled Workforce

Vietnam’s labor cost advantage remains one of the strongest cases for foreign manufacturers. At US$3.00 per hour compared to China’s US$6.50, the gap is meaningful even as Vietnamese wages continue to grow at around 8 to 10% annually.

Where you locate within Vietnam matters as much as the cost itself. 

The north, particularly around Hanoi, Hai Phong, and Bac Ninh, has become Vietnam’s electronics and high-tech manufacturing heartland. Global names like Samsung, Canon, and Foxconn have anchored major operations here over the decades. This contributed to a skilled workforce that is well-suited to precision assembly and component production.

The south centers around Ho Chi Minh City, Binh Duong, and Dong Nai. It is home to the country’s largest concentration of industrial zones and a far more diverse manufacturing base, from garments to footwear, furniture, food processing, and consumer goods. Brands like Nike, Adidas, and IKEA have long-established production in the region, supported by a large labor pool, mature supplier networks, and strong port connectivity.

Emerhub’s local team can identify the right zone for your sector, verify your FTA eligibility, and map out a market entry strategy before you commit. Schedule a free consultation today.

Choosing a Business Structure: Limited Liability Company vs Joint Stock Company

Foreign manufacturers in Vietnam have two main legal entity options. Both allow 100% foreign ownership in most manufacturing sectors.

Limited Liability Company (LLC) in Vietnam

A Limited Liability Company (LLC) in Vietnam is the standard choice for foreign manufacturers. It allows 100% foreign ownership, has no statutory minimum capital, and supports between 1 and 50 members. It is recommended, however, that you register the necessary capital for supporting manufacturing expenses in case of capital assessment.

Most foreign manufacturing operations in Vietnam, including major electronics, garment, and consumer goods producers, operate as LLCs.

Establishing a Joint Stock manufacturing company in Vietnam (JSC)

A Joint Stock Company (JSC) requires at least 3 founding shareholders and supports an unlimited number of subsequent shareholders. It allows you to issue different classes of shares and is the only structure that can list publicly. 

JSCs are more common for trading and financial services than for manufacturing, but they make sense for large-scale facilities with multiple investors or where future public listing is part of the plan. 

Feature	LLC	JSC
Minimum members/shareholders	1 (single-member) or 2-50 (multi-member)	At least 3 founding shareholders
Foreign ownership	Up to 100% in most sectors	Up to 100% in most sectors
Share issuance	No formal shares; capital contributions	Formal shares with multiple classes possible
Public listing	Not eligible	Eligible
Setup complexity	Simpler	More complex
Best for	Most manufacturing operations	Large-scale facilities, multi-investor projects, future IPO plans

For most foreign manufacturers, the LLC is the right choice. Convert to a JSC later if your needs change.

If you are unsure which structure suits your operations, Emerhub’s local team can assess your business model and recommend the right entity type before you incorporate.

How to Set Up a Foreign Manufacturing Company in Vietnam: Step-by-Step Process

The following process reflects the post-March 2026 framework under the Law on Investment 2025. Most foreign manufacturers in industrial zones will follow this path.

Step 1: Establish Your Legal Entity (Obtain the ERC)

The Enterprise Registration Certificate (ERC) gives your company legal standing in Vietnam. It is issued by the Business Registration Division under the provincial Department of Finance and is typically processed within 3 to 5 working days when documentation is complete.

Emerhub can prepare and file the full application on your behalf, including:

• A completed enterprise registration form specifying your company type, business lines, charter capital, legal representative, and registered address
• Your company charter, outlining the organizational structure and rights of members or shareholders
• A list of capital contributors with their ownership ratios
• Copies of valid passports or ID documents for all members and the legal representative
• Proof of a lawful registered office address in Vietnam
• For corporate investors: incorporation certificate and company constitution from your home jurisdiction, consular legalized and translated into Vietnamese.

Once your ERC is issued, you can hire staff, sign contracts, open a bank account, and secure a factory lease while the IRC application runs in parallel.

Step 2: Complete Post-Establishment Compliance

Once your ERC is issued, several compliance steps must be completed before you can begin operations. Emerhub manages all of these as part of our incorporation package:

• Open a Direct Investment Capital Account (DICA): All foreign capital contributions must flow through this account at a licensed Vietnamese bank. Your charter capital must be deposited within 90 days of ERC issuance.
• Tax and VAT registration: Your enterprise code doubles as your tax identification number, but VAT registration and initial tax declarations must still be completed separately.
• Appoint a Chief Accountant and General Director: Both roles are mandatory under Vietnamese law before operations commence.
• Engrave the company stamp and register with the Statistics Office: These are administrative requirements that must be completed post-incorporation.
• Register with labour authorities and social insurance: Notify DOLISA that your company is employing staff. Then, register with the district-level Social Insurance agency within 30 days of signing your first employment contract.

Step 3: Obtain the Investment Registration Certificate (IRC)

The IRC formally approves your investment project under the Law on Investment 2025. It records project name, location, business scope, investment capital, project term, and any applicable incentives or conditions.

The authority handling your application depends on where your factory is located:

Authority	Projects
Management Board of the relevant zone	– Projects within industrial parks, export processing zones, high-tech parks, digital technology zones, or economic zones. – Covers the majority of foreign manufacturing setups.
Provincial Department of Finance	– Projects outside designated zones.  – Less common for foreign manufacturers but relevant for operations tied to specific land or resource access, such as large-scale agricultural processing or raw material extraction near a production site.
Investment Registration Authority at the executive office	– Projects spanning two or more provinces – Projects located both inside and outside designated zones, or  – Projects in zones without a Management Board

For projects using the Special Investment Procedure (SIP) inside industrial zones, the Management Board issues the IRC within 15 working days. Standard processing for non-SIP projects runs 1 to 3 months depending on sector and project complexity.

The IRC must be obtained within 12 months of ERC issuance. 

After securing the ERC, our local experts manage the IRC process in parallel to avoid delays. 

Step 4: Secure for Industry-Specific Licenses 

Depending on your manufacturing sector, you may need additional licenses before commencing operations. These include:

• A retail or trading license, if your company will sell products locally or export directly
• An e-commerce sublicense for selling through Vietnam’s online marketplace
• Product registration with the Vietnamese Food and Drug Administration (FDA), for regulated goods such as cosmetics, food and beverages, pharmaceuticals, or medical devices
• An import license, for bringing in foreign-produced raw materials or manufacturing components

The scope of these requirements depends on what you manufacture, not just how your company is structured. Some sectors carry specific facility, personnel, and quality standards that apply regardless of company size, for example: 

Industry	Key Requirements
Cosmetics production	– The product manager must have a degree in either Chemistry, Biology, Pharmaceutical Science or in another relevant major  – Separate areas for storing flammable and explosive matters, highly toxic substances, discharged or returned products  – Raw materials must meet the quality standards adopted by the manufacturer
Food and Beverage production	– Secure a food safety certification and comply with product-specific nutritional regulations– Production facilities must meet safety criteria in terms of equipment, storage, and layout
Film production	– Certificate granted by the Ministry of Culture and Information confirming that all business conditions are fulfilled – The director or general director must be a Vietnamese citizen permanently residing in Vietnam and have practical experience in cinematography

If you’re unsure which applies to your current business model, our team will conduct a full review and validate all mandatory requirements before you decide to commit.

Step 5: Leasing Land in an Industrial Zone

Land ownership is not permitted for foreign companies in Vietnam. When choosing a location for your manufacturing facility, you therefore need to consider several factors to ensure your operations run efficiently and remain compliant. Key factors to evaluate when selecting a zone:

• Industry specialization: Some zones specialize in electronics, others in textiles, food processing, or heavy industry. A zone aligned with your sector gives you access to relevant infrastructure and a compatible supplier ecosystem.
• Logistics access: Proximity to ports, highways, and logistics corridors directly affects your cost of moving materials and finished goods.
• Labor availability: Northern zones around Hanoi, Hai Phong, and Bac Ninh concentrate electronics and high-tech workforces. Southern zones around Ho Chi Minh City, Binh Duong, and Dong Nai are stronger for consumer goods, garments, and food processing.
• Facilities: Some zones offer pre-built factory units for lease. Others require greenfield construction. Your timeline and capital position will determine which is feasible.

Bear in mind that industrial zones in Vietnam are commonly independently owned, but state ownership does exist in some areas. Approval of your lease depends entirely on the managing party of the specific zone, and each zone has its own sector plans and capital requirements that factor into whether your facility is approved.

Choosing the right zone is one of the most consequential decisions in your setup. Under the amended Investment Law, projects inside industrial parks, high-tech zones, or free trade zones are exempt from construction permits, fire safety approvals, and environmental impact assessments. Therefore, the right choice saves you six to twelve months over greenfield setup outside zones.

How Emerhub Supports Your Manufacturing Setup in Vietnam

Setting up a manufacturing operation in Vietnam involves coordinated work across multiple government agencies, document legalization in your home country, and on-the-ground negotiations with industrial zone Management Boards. Emerhub’s local team in Vietnam supports foreign manufacturers through every stage:

• Sector eligibility verification and FTA benefit analysis
• ERC and IRC application preparation and submission
• Industrial zone identification and lease coordination
• Document legalization through the Vietnamese embassy in your home country
• Tax, payroll, and DOLISA registration
• Sector-specific license applications
• Ongoing compliance and reporting after operations commence

Talk to our consultants about your manufacturing plans in Vietnam. We can run an initial assessment, identify the right zone for your sector, and walk you through the full setup timeline before you commit.