How to set up a manufacturing company in Vietnam

Vietnam’s competitive labor costs and investor-friendly policies make it an ideal hub for manufacturing businesses. To establish a company, you must choose the right business structure, secure necessary licenses, and comply with local regulations. This guide outlines the key steps to help you set up your manufacturing company efficiently.

Learn how to set up a company in Vietnam

Understanding the manufacturing landscape in Vietnam

The Law on Foreign Investment in Vietnam ( Law No. 61/2020/QH14), effective from January 1, 2021, establishes Vietnam as an attractive destination for manufacturing. It provides foreign investors streamlined registration processes, tax incentives, and access to developed industrial zones. With strategic Southeast Asian location, low labor costs ($150-200/month), and free trade agreements (EVFTA, CPTPP), Vietnam significantly attracts manufacturing-focused FDI, comprising over 64% of total FDI in 2023.

Lear more: How to Set Up a Manufacturing Company in Vietnam

Key industries

Vietnam’s manufacturing sector thrives across diverse industries, notably electronics, textiles, automotive, and sustainable manufacturing. The Law on Foreign Investment in Vietnam offers incentives like tax exemptions for priority sectors. Electronics, led by companies like Samsung, attracts significant FDI, while textiles and footwear benefit from low labor costs and free trade agreements like EVFTA. High-tech and green manufacturing also gain support from government policies, presenting attractive opportunities for companies setting up manufacturing operations in Vietnam.

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Market trends and opportunities

As of 2025, Vietnam’s manufacturing landscape thrives due to supply chain shifts under the “China Plus One” strategy, driving significant FDI growth. Automation and digitalization enhance efficiency, especially in electronics and automotive sectors. High-tech industries and sustainable manufacturing offer promising opportunities, supported by favorable policies under the Law on Foreign Investment in Vietnam.

Legal framework and business structures

The Law on Foreign Investment in Vietnam (Law No. 61/2020/QH14), effective from January 1, 2021, provides a clear legal framework for foreign investors establishing manufacturing companies. Alongside the Law on Enterprises 2020, it details business structures, registration processes, and investor protections. With manufacturing representing over 64% of Vietnam’s FDI in 2023 and attractive incentives like tax exemptions, understanding these laws is crucial for success in this sector.

Types of business entities

When planning to set up a manufacturing company in Vietnam, investors typically consider these primary business structures:

 

Lear more: Types of Companies in Vietnam

Legal requirements

To set up a manufacturing company in Vietnam under the Law on Foreign Investment in Vietnam, foreign investors must follow a structured process involving multiple legal steps. Below is an elaboration of these requirements, designed to help you establish a manufacturing company in Vietnam efficiently:

Guide to setting up a manufacturing company in Vietnam

The Law on Foreign Investment in Vietnam (Law No. 61/2020/QH14) guides investors to set up a manufacturing company in Vietnam. Law effective since January 1, 2021. Manufacturing drives over 64% of Vietnam’s FDI in 2023. Offers tax exemptions for up to 4 years for a manufacturing company in Vietnam. A step-by-step guide simplifies establishing a manufacturing company in Vietnam.

Step 1: Choose the appropriate business structure

• Selecting a business structure is key to set up a manufacturing company in Vietnam.
• Governed by the Law on Foreign Investment in Vietnam.
• 100% Foreign-Owned Company: Full control for the investor, ideal for electronics or automotive manufacturing, suits a manufacturing company in Vietnam needing independence.
• Joint Venture: Partnership with a local entity, best for textiles or footwear industries, benefits a manufacturing company in Vietnam with local expertise.
• Business Cooperation Contract (BCC): Non-equity, contract-based collaboration, flexible for short-term projects, simplifies set up a manufacturing company in Vietnam without a legal entity.

Lear more: How to Set Up an FDI Company in Vietnam

Step 2: Secure a suitable location

• Securing a suitable location is a pivotal step to set up a manufacturing company in Vietnam, impacting logistics, costs, and compliance.
• Options include industrial zones (e.g., VSIP, Deep C), export processing zones, or high-tech parks, offering infrastructure and tax benefits for a manufacturing company in Vietnam.
• Industrial zones provide pre-built factories or land leases (up to 50 years), streamlining setup for industries like electronics or textiles.
• Location factors to consider: proximity to ports (e.g., Hai Phong, Ho Chi Minh City), access to raw materials, and labor availability.
• Foreigners cannot own land but can lease from the state or private entities, requiring a legal lease agreement under the Law on Foreign Investment in Vietnam.

Step 3: Prepare and submit necessary documentation

• Preparing and submitting documentation is essential to set up a manufacturing company in Vietnam under the Law on Foreign Investment in Vietnam.
• Key documents include an Investment Registration Certificate (IRC) application for projects over $800,000, detailing the project scope and financial capacity.
• An Enterprise Registration Certificate (ERC) application follows, specifying the business structure (e.g., 100% foreign-owned) for a manufacturing company in Vietnam.
• Additional paperwork may include a lease agreement for industrial zone land, plus an Environmental Impact Assessment (EIA) for factory operations.
• Submit to the Ministry of Planning and Investment (MPI) or provincial DPI; IRC takes 15-30 days, ERC 3-5 days, per legal timelines.

Step 4: Obtain licenses and permits

• Obtaining necessary licenses and permits is a critical step to set up a manufacturing company in Vietnam under the Law on Foreign Investment in Vietnam.
• An Environmental Impact Assessment (EIA) is required for factory operations, ensuring compliance with environmental standards; approval takes 30-60 days.
• Sub-licenses may apply for conditional sectors (e.g., chemicals, electronics), issued by ministries like the Ministry of Industry and Trade, within 15-45 days.
• Construction permits are needed for building or modifying facilities, processed by local authorities in 20-30 days for a manufacturing company in Vietnam.
• Post-registration, operational licenses (e.g., fire safety, factory operation) finalize legal readiness, typically secured within 5-15 days.

Step 5: Capital contribution and bank account setup

• Capital contribution and bank account setup are vital to set up a manufacturing company in Vietnam under the Law on Foreign Investment in Vietnam.
• Investors must contribute the registered capital (minimum varies by sector, e.g., $100,000 for manufacturing) within 90 days of ERC issuance.
• Capital can be cash, equipment, or technology, transferred to a direct investment capital account at a licensed Vietnamese bank.
• Opening this account requires the ERC and IRC (if applicable), typically completed in 5-10 days for a manufacturing company in Vietnam.
• Funds must comply with Vietnam’s foreign exchange regulations, ensuring smooth repatriation of profits later.

Learr more: How to Open a Bank Account in Vietnam as a Foreigner

Step 6: Recruitment and staffing

• Recruitment and staffing are key to operational success when you set up a manufacturing company in Vietnam under the Law on Foreign Investment in Vietnam.
• Investors can hire local workers (minimum wage $150-200/month) and expatriates, adhering to Vietnam Labor Law for Foreigners.
• Local talent is abundant, with a young workforce ideal for a manufacturing company in Vietnam, though specialized training may be needed.
• Work permits are required for foreign staff, processed within 7-15 days via the Ministry of Labor, Invalids and Social Affairs (MOLISA).
• Labor contracts must comply with regulations, ensuring fair wages and working conditions.

Setting up a manufacturing company in Vietnam is a strategic move, supported by the Law on Foreign Investment in Vietnam and its investor-friendly incentives. Establishing a manufacturing company in Vietnam offers immense potential, thanks to robust legal support and a dynamic market.

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