Legal procedure to establish a manufacturing company

Legal procedure to establish a manufacturing company

Legal procedure to establish a manufacturing company

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. Minimum requirements for a manufacturing company in Vietnam. In general, there is no minimum capital requirement.


Minimum requirements for manufacturing company in Viet Nam

The approval of the investment based on your planned activities. For example, if you want to establish a factory for producing textiles, you must have sufficient funds to build it. You cannot do that with an unrealistic capital of only 2,000 USD, the capital should be based on the actual necessities. And the maximum allowed foreign ownership for manufacturing companies in Vietnam is 100%.

Type of legal entities available for foreigners in Viet Nam

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.

See more at our article for more detail: Structure of a limited liability company and structure of a joint stock company.

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. Vnclearview will handle all the necessary procedures of company registration in Vietnam on your behalf.

Manufacturing company registration timeline in Vietnam

There are 3 major steps that an investor needs to fullfil to establish a manufacturing company in Viet Nam : Investment certificate, business registration certificate and additional licenses (if required).

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 fullfil:

  • 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:

IndustrySome examples of the specific requirements
Cosmetics productionProduct manager must have a degree in either Chemistry, Biology, Pharmaceutical Science or in other relevant major Separate areas for storing inflammable and explosive matters, highly toxic substances, discharged or returned products Raw material must meet the quality standards adopted by the manufacturer
Film productionMinimum capital of 1 billion VND (~44,000 USD) Certificate granted by Ministry of Culture and Information confirming that all business conditions are fulfilled Director or general director must be a Vietnamese citizen permanently residing in Vietnam and have practical experience in cinematography

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.
Read our previous articles on corporate compliance and tax reporting in Vietnam to learn more about tax rates and reporting requirements in Vietnam.

If you have any further questions or you would like to get started with the company registration process in Vietnam, reach our consultants via contact@vnclearview.com or by filling in the form below. Or reach at our service : Business registration, 100% REMOTE