EPE Status and Domestic Sales in Vietnam: What Korean and Japanese Suppliers Need to Know

In brief

• Domestic sales are permitted. Article 26(11) of Decree No. 35/2022/ND-CP expressly allows export processing enterprises (EPEs) to sell goods into Vietnam’s domestic market.
• The customs boundary still matters. Transactions between an EPE and areas of Vietnam outside non-tariff zones are generally treated as export/import transactions, subject to the exceptions in Article 26(4).
• The operating model needs review. Check the investment project scope, the nature of the goods, customs and tax treatment, and any separation or equipment-use requirements before accepting domestic orders.

A component manufacturer may establish an EPE in Vietnam to serve overseas customers, then receive an order from a Vietnamese assembler. Permission to sell domestically does not remove the need to examine how the sale fits the EPE’s registered project and customs arrangements.

1. The rule: an EPE may sell goods domestically

Article 26(11) of Decree No. 35/2022/ND-CP states, in our unofficial English translation:

“Export processing enterprises are permitted to sell goods into the domestic market. Goods imported from export processing enterprises or export processing zones into the domestic market are subject to tax in accordance with the law on export and import duties.”

The starting point is therefore permission, not a blanket prohibition. A manufacturer should not assume that it must abandon EPE status or establish another company simply because a Vietnamese customer wants to buy its products; whether any structural change is needed depends on the project scope and customs arrangements discussed below.

That permission is not a complete transaction approval. Under Article 26(3), the tax treatment applicable to non-tariff zones applies from the time the EPE objective is recorded in the Investment Registration Certificate (IRC) or EPE registration confirmation. Customs must also confirm that the enterprise meets the relevant inspection and supervision conditions before it operates.

Decree No. 35/2022/ND-CP has been amended by Decree No. 178/2025/ND-CP.

2. How a domestic sale is treated

Article 26(4) treats trade in goods between an EPE and other areas of Vietnam that are not non-tariff zones as an export/import relationship, subject to the exceptions stated in that provision. Customs procedures, inspection, supervision and export/import duties follow the rules applicable to separate customs areas and non-tariff zones.

For a finance or supply-chain team, this means a domestic purchase order should not be processed as though the EPE and its buyer were necessarily in the same customs territory.

Article 26(11) refers to tax under the export/import duty law. The applicable result depends on the goods and, where relevant, their inputs. It requires a case-by-case review; the decree provisions quoted here do not establish a universal amount or tax outcome.

3. Selling used assets or liquidating goods

A different rule addresses the sale or liquidation of used assets and goods. Article 26(4)(c) permits an EPE to sell or liquidate them into the domestic market in accordance with investment law and related laws.

At the time of sale or liquidation, export/import management policies generally do not apply. However, the provision preserves requirements for goods subject to conditions, standards or specialised inspection that were not completed on import. Goods requiring a licence also need written consent from the licensing authority.

This is a specific rule for sales or liquidation of assets and goods. It should not be used as a substitute for analysing routine domestic sales of newly manufactured components.

4. Other business alongside export processing

Article 26(6) allows an EPE to conduct other business activities under the investment and enterprise laws, subject to three express conditions:

1. Storage of goods used for export processing must be separate from storage for other activities.
2. Revenue and costs from export processing and other activities must be accounted for separately.
3. Assets and equipment benefiting from EPE tax incentives must not be used for other activities. If they are used for those activities, the tax incentives previously exempted or reduced must be repaid.

These requirements matter when an EPE proposes an additional line of business, including a possible purchase-and-resale model. The enterprise should first determine whether its proposed transaction falls within its export-processing project or constitutes another activity. Article 26(11) should not be read as an automatic grant of every trading or distribution right.

5. Checklist before the first domestic sale

The CFO, plant manager and legal team should document the answers to these questions:

1. What is being sold? Distinguish finished goods made by the EPE, goods purchased for resale, and used assets or goods being liquidated.
2. What does the IRC cover? Verify the registered project objectives and whether the proposed sales fall within the approved scope; assess any need for amendment.
3. Is the EPE operationally confirmed? Check the EPE registration position and customs confirmation required by Article 26(3).
4. Where is the buyer located? Establish whether the transaction crosses the customs boundary described in Article 26(4).
5. What customs and tax review is required? Examine the products, relevant inputs, movement of goods and proposed transaction structure without assuming a uniform tax result.
6. Are additional business rights relevant? For goods not produced by the EPE, assess whether trading or distribution rights and related approvals need to be obtained.
7. Are storage and accounts separated? Where other activities are involved, check physical storage arrangements and separate revenue and cost accounting under Article 26(6).
8. Which equipment and assets are involved? Identify tax-incentivised equipment used for other activities and assess any repayment exposure; apply the specific liquidation checks when relevant.

Confirm the transaction classification before shipment.

6. When to obtain legal advice

Seek a transaction-specific review when the project description is unclear, a domestic sales channel is being added, imported goods will be resold, or tax-incentivised machinery may be used for an additional activity. Legal, customs and finance teams should agree on one documented operating model.

For related background, see our factory setup and customs FAQ, manufacturing investment guide and Vietnam FDI guide for Japanese and Korean investors.

Planning domestic sales from an EPE? Request a project-specific legal and customs review.

Frequently asked questions

Can an EPE sell finished goods to a Vietnamese customer?

Yes. Article 26(11) expressly permits domestic sales. The project scope and the customs and tax treatment of the particular goods still need to be reviewed.

Does a domestic sale mean the enterprise loses EPE status?

Article 26(11) does not make loss of EPE status an automatic consequence of a domestic sale. Nor should every structure be assumed to leave EPE conditions unaffected. Review the IRC, customs supervision arrangements and the activities actually undertaken.

Can we use tax-incentivised machinery for domestic production?

Article 26(6)(c) restricts using tax-incentivised EPE assets and equipment for other business activities and requires repayment of the exempted or reduced incentives if they are so used. Whether a particular production arrangement is an “other activity” needs specific analysis.

Do we need a trading licence to resell imported goods?

Article 26(11) alone does not answer that question. Reselling goods not manufactured by the EPE should trigger a review of the IRC, trading and distribution rights, and any relevant approval requirements before sales begin.

Is a sale to a local buyer treated as an ordinary domestic sale?

Not for customs purposes simply because the customer is in Vietnam. Article 26(4) generally characterises transactions across the EPE/non-tariff-zone boundary as export/import relationships, subject to the provision’s exceptions.

General information, not legal advice for a specific matter. Legal references as of 6 November 2026.