Tips to rent a factory or warehouse in Vietnam with low price and legally
– You want to manufacture or store your product in Vietnam and you need to rent a factory or warehouse? Do you ever think about legal process to manufacture/store after you rent a factory/warehouse?
– Even you rented an expensive factory. Do you know that how many legal papers it must comply? and in that location is it allowed to produce your kind of product?
– Very important tip: that most people do not know when renting factory/warehouse: Is that in preferential zone?
Here we will help you understand about:
- 1. Legal process to set up a manufacturing company in Vietnam?
- 2. Store your product in Free Trade Zone warehouse, Pros and cons?
- 3. How to choose a good factory/warehouse and cheap?
- 4. Preferential zone that helps investors save millions USD
- 5. What value we offer?
(Sources from which you can find factory or warehouse in Vietnam, compare prices/preferences-click Here)
Or Let’s leave your email address to get latest policies and factory for rent prices from 324 industrial zones in Vietnam.
1. Legal process to set up a manufacturing company in Vietnam?
Step 1: SETUP COST ESTIMATE, that including cost of leasing factory and taxes, labor’s wage.
If you choose a factory in preferential zones, you would be saved a lot of tax duties (Click Here for more detail), I will explain in item 2 below.
For example, your company is going to produce high-tech products in Vietnam, there are generous preferences from the Vietnam Gorvernment : land-use, tax incentives.
Or if you set up your factory in preferential zones, there will be CIT tax exemption up to 2, 4 , 9 years.
Step 2: CHOOSE A LEGAL ENTITY, there are 2 common legal entities to start with, it is depending on your scale of business, number of founders:
Step 3: OWN A FACTORY, you must own a factory contract before going to the final step (step 4)
There are some legal documents a factory must have so that you can apply for manufacturing:
- Land using certificate of the owner
- Fire protection license
- Environmental protection licence
- Construction permit
- Business registration certificate
Step 4: CERTIFICATES, after you chose a legal entity to start with and owned a factory as described in step 3, this step is to bring it come true.
(Remember: factory for rent must comply some legal documents from that you can apply for certificates)
-Apply for an investment certificate from the department of planning and investing.
-Apply for a business registration certificate.
There is much easier way to do all steps above in Vietnam, bacause Vietnam’s law allows authorization to Register company. So you can outsouce a consulting firm to setup a manufacturing company in Vietnam, all you have to prepare is just a copy of your passport.
2. Store your product in Free Trade Zone warehouse, Pros and cons?
Pros of warehouse in Free trade zone:
-Free Trade Zone, Vietnamese usually knows as bonded warehouse (a place to be supervised by Vietnam customs tightly 24/24. It means when unloading your goods, you make customs clearance and transfer goods to there you do not need to pay import tax right away for all amount of goods just stepped in Vietnam.
You just pay import tax for each time you bring your goods out to your customers in Vietnam territory correspondingly, You are only able to bring out if you do Customs clearance one more time.
-Bonded warehouse is also a convenient place to store goods in order to export to a third country without doing Export procedure and import procedure in Vietnam
-Highly secured with 24/24 security
-Area and duration for lease ranging flexible,
You want to store 200 pallets this month and want to rent 200 sqm in a Bonded warehouse, next month you want to store 500 pallets and want to rent 300 sqm. That is fine for you.
Cons of warehouse in Free trade zone:
-Price unit per sqm is normally high, for example, a sqm in a bonded warehouse 35 km away from Cat Lai port is $6.5/m2/month
-If your product is stored in a bonded warehouse with the purpose of importing to Vietnam, you have to make Customs Clearance for every single time you want to take your goods out from that.
3. How to choose a good factory/warehouse and cheap?
-Factory-warehouse chain for lease:
In 2020, regardless of COVID-19, the price of industrial real estate leasing is not going down due to the moving wave from China to Vietnam and the EU- Vietnam free trade agreemnet effective 1st August 2020.
The business model of ready-built factories is very popular recent years. Many companies which built and supply ready-built factories from the North to the South like this company:
Most factories of the company are designed to locate in preferential zones, tax incentives, good infrastructure, easy connect to ports.
The public prices from $4.5, $5, $5.5, $6 per sqm per month (before tax).
-Spare space of factories:
Many investors built their factories with 30-year-vision and expect either their production expands or for lease that resulting in Spare spaces.
There are many even newly built and also designed to locate in preferential zones, tax incentives, good infrastructure, easy connect to ports.
It is not be public as factory chain model is, few people knows but the price is cheaper up to 35% than that in the factory chain.
Here is a factory which is in preferential zone, 30 minute drive to Hanoi, ready for lease:
- Newly built end of 2019
- Total 4000 sqm
- There are 2 blocks, each block is 2000 sqm and 1 block is spare, ready for lease
- Highly secured 24/7
- Tax incentives: 2 years CIT tax exemption and next 4 years CIT tax 50% deduction.
- The leasing price is $3 before tax.
See how to calculate CIT (click Here).
Catching up the booming need of factory/warehouse in Viet nam recent years. There are many locals who see the good fortune, they build their own warehouses/factories on their own land or on the land they get permits by themselves which are outside of industrial zones. The area of a warehouse varies from 70 m2 to even thousands m2. The leasing price is between $2 and $3 per square meter per month.
Notice: there are no tax incentives here, best suitable for logistic warehouse.
–Per industrial zone is licenced for a particular kind of product, with different preferences. For example Hoa Lac industrial zone located in suburbs of Ha noi is for high tech products only, Samsung industrial zone (SEVT) in Thai nguyen is just for products of Samsung, 2000-hectare Dong van industrial zone in Ha Nam or Binh duong industrial zone in the south province are for machanics, car products, high-tech products, electronics etc. Some special products are just assigned and located in special industrial zones.
-There are hundreds of business lines, industrial zones, 63 provinces in Viet Nam, each with a slightly different investment environment and slightly different procedures.
If you want to know detail about a particular industrial zone, the expected location, required licenses that are corresponding to your business or want to be consulted about tax, policy, etc. Do not hesitate to contact us by leaving your comment or email for the best consultancy.
4. Preferential zone that help investors save million
Preferential zones usually in industrial zones that established after 2016 (due to the FDI attraction policy of the Government), here are some lucrative preferences that investors can’t ignore:
–Preferential tax: according to decree 218/2013/ND-CP of the Governent, from 1/1/2016, to new establishments in specific industrial zones will be exempt for 2 years and duducted 50% for the next 4 years from the Corporate income tax.
Make it simple: Corporate income tax (CIT)= (turnover-expenses)x20% (while in China is 25%), if you are in a preferential zone (like this option, you do not need to pay CIT for the first 2 years and next 4 years (just pay 50%).
More cases with tax incentives (Click)
(Click Here to see detail how to calculate CIT- Remember: Not all industrial zones are applied this preferential tax).
–Export proccessing zone: To all enterprises located in an Export proccessing zone, taxes 0% applied for: VAT, import and export taxes
5. What value we offer?
-Free consultancy for your business : tax, setup cost, low cost property, vendors, sourcing properties
-Validate legality of factories and validate if your product ‘s allowed to be produced or not in per industrial zone
-Save your time: just one time sign off documents remotely which are provided and guided by us and you will have CERTIFICATES after determined date.