How to set up a manufacturing company in Vietnam

How to set up a manufacturing company in Vietnam

How to set up a manufacturing company in Vietnam

10 March, 2020


There are frequently asked questions from foreign investors:

-How to set up a manufacturing company in Vietnam?

-How much does it cost to rent/build a factory in Vietnam?

-Why Vietnam is a good place to invest?

In this article we will guide you step-by-step to setup a manufacturing company as well as help you comprehend the manufacturing environment in Vietnam.

Let’s leave your email address to get latest policies from the Vietnam government and access to the information of 324 industrial zones in Vietnam.


1. How to set up a manufacturing company in Vietnam?

Step 1: SETUP COST ESTIMATE is your estimate about all expenses or penalties that may happen before and during your business operation so that you will have a suitable plan to invest in Vietnam.

Although SET UP COST in Vietnam is among the lowest in South Asia but it shall be known before stepping in Vietnam so that you can anticipate the required budget.

Statistics of labor’s wage and construction cost in Vietnam compared to other countries:

See more: Pros and cons of setting up manufacturing in Vietnmam

There are 3 major factors that affect your SETUP COST ESTIMATE (click Here for more detail):

  • TAXES AND POLICIES
  • FIXED ASSETS (PROPERTY)
  • LABOR WAGES

If you know how to optimize 3 factors above, your company will be saved a lot . Click Here for the detail explanation or continue reading to end of this article.

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.

Set up your company address in right industrial zone, also will be saved a lot of Taxes.

See more at:

Minumum wage in Vietnam (2020).

Tax preferences in Vietnam.


Step 2: SETUP A LEGAL ENTITY, there are 2 common legal entities to start with, it is depending on your scale of business, number of founders:

A limited liability company or

A joint stock company.


Step 3: OWN A PROPERTY, owning a land-leasing-contract or a warehouse-leasing-contract is a legal basic to establish a manufacturing company in Vietnam, it is used to apply for certificates or licenses. There are many sources that you can lease a land for 50 years or a ready-built factory/warehouse, you can also contact directly to the owners or through associtaions:

Associations in Vietnam


Step 4: CERTIFICATES, after you chose a legal entity to start with and owned a property as described in step 3, this step is to bring it come true

-Apply for an investment certificate from the department of planning and investing.

-Apply for a business registration certificate.

-Other licenses (depending on your type of production):

  • Construction permit – in case you intend to build a new factory or a warehouse.
  • Fire protection and fire safety license.
  • Certificate of Food Safety.
  • Announcement of technical regulations conformity.
  • Register an Environmental Impact assessment report.


There is much easier way to do all steps above in Vietnam, bacause Vietnam’s law allows authorization to Register company. So you can outsource a consulting firm to setup a manufacturing company in Vietnam, all you have to prepare is just a copy of your passport.


Here are our services:


What you get from us?

-Free consultancy for your business line: tax, setup cost, low cost property, vendors

-Save your time: just one time sign off documents remotely which are provided and guided by us.

-End to end service during your operation in Vietnam: tax accounting, work permit, audit, recruitment, legal support, management


2. How much does it cost to build a factory or lease a warehouse in Vietnam?

Build new one, built-to-suit, ready-built warehouses/factories or local’s warehouses are among the most common types in Vietnam. You can build it from the ground as a foreigner or lease it, let’s be wise:

-Build a new factory/warehouse from the ground:

First, you need to have the design, then use the design to apply for a construction permit granted by the authorities.

Building a new one is usually for the investor who intends to stay business in Vietnam long term, the cost to build a new factory or a warehouse varies, depending on the location, the standard, land-use preference.

For example, if you are going to build an one-hectare factory around Ha Noi, the cost will be about 1.6 million to 2.2 million USD, which is including 50-year-land-use, construction fee and licenses fee.

-Ready-built factory/warehouse:

In 2020, regardless of COVID-19, the price of industrial real estate leasing is going up 10% corresponding period of preceding year as the moving wave from China to Vietnam in manufacturing sector increasing. Ready-build warehouse/factory will save time and procedure for entrepreneurs. The price for leasing is between $2 and 5$ per square meter per month.

Tips to choose a legal warehouse with affordable price(click).

-Built to suit:

Is growing year by year, entrepreneurs can send the design to landlords then they will build it according to your design. The price for leasing is between $2 and $7 per square meter per month.

-Local’s warehouses:

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 or inside of crowded cities, outside of industrial zones. The area of a warehouse varies from 70 m2 to even thousands m2. This type of business normally fits small-medium enterprises. But inconveniently, the system is not integrated : smaller road, no adjacent factory, no facilities, no professional caterer that compared to industrial zones. The leasing price is between $2 and $3 per square meter per month.

See more: How we helped client optimize the setup cost and growed business in Vietnam.


Note:

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.


Build new one or lease it? which is better?

Let’s make a simple calculation by comparing cost between leasing a warehouse/factory and building a new one from the ground.

By our calculation: the cost of two-year-leasing-contract of an one-hectare-warehouse is enough for you to build a new one eligible to use for 50 years.

But, why the ready-built warehouse in Vietnam is increasing year by year? Because the foreign investors fear to face with procedures, laws and regulations, construction permit, at leat 4 months timeline to register.

Hereby we are created to solve this problem for you, our skilled members are from many fields of business: Construction, Legal, IT, Design who were actively supporting to many foreign companies and with many years of experience, will help you out from location servey, warehouse design, setup cost estimate, working with authorities to get permits, certificates.


3. Why Vietnam is a good place to invest?

-Low tax: standard corporate income tax for all companies in Vietnam is 20%, it is among the lowest in South Asia, but still there are a lot of tax incentives, tax exemption cases as FDI attraction policies of the Government.

-Low labor cost: despite the yearly increase of minimum wage, Vietnam is still a country with low labor costs. minium wages in Vietnam remain less than half of that are in China. The minimum wage per month for a worker in Hanoi (as regulated by the Government 2020) is only under $200.

-Stable politics: Vietnam is among a few countries in the world that has a stable political environment while the locals are polite and gentle.

-Strategic location:

Located in the center of ASEAN, Vietnam has a strategic location, it is close to other major markets in Asia, the most notable neighbor of them being China.

Its long coastline with more than 3000 kms, direct access to the South China Sea and proximity to the world’s main shipping routes, perfect conditions for trading.

-Trade agreements: Vietnam is totally open to the world by the numerous trade agreements that Vietnam has signed: EVFTA ( EU-Vietnam free trade agreement), Member of ASEAN and ASEAN Free Trade Area (AFTA), Member of World Trade Organisation (WTO), Bilateral Trade Agreement (BTA) with the US, CPTTP, etc.


TIPS:

Register a manufacturing company in VN, 100% REMOTE (click here).

Setup cost estimate (click here).

How did we help a foreigner (who has never stepped in Vietnam) set up a manufacturing in Vietnam (click here).


Members of Clearview have years of experience in industry and business registration. Served hundreds of clients.
We guarantee to offer you 100% :
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Establishing A Manufacturing Company In Vietnam takes at least 3 Months

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