100 FAQ about Factory Setup Vietnam for Foreign Manufacturers

Attorney Vu Manh Quynh is the Managing Partner of ECOVIS Vietnam Law, advising international investors on Foreign Direct Investment (FDI), corporate governance, and regulatory compliance in Vietnam.

Part of our guide: Manufacturing Investment in Vietnam

Foreign manufacturers planning a factory in Vietnam tend to ask the same one hundred questions, in roughly the same order: whether the location makes sense, which entity to form, where to put the plant, which approvals come first, what the factory must have before it can operate, how it is taxed, how it hires, how it imports and exports, what it must keep filing after licensing, and how to manage risk or exit. We have organised those questions into ten sections. Use this page as a map: pick the question that matches your stage and follow the link to the full answer.

Each section is a standalone article with its own review date. If you are at the start of a project, read Section I and Section II first, then the Complete Legal & Investment Guide. If you already hold an IRC and ERC, go to Section IX and the 20 steps before first production.

I. Market Entry and Investment Strategy (Q1–Q10)

Answered in: Vietnam Factory Setup FAQ — Section I

1. Q1. Why is Vietnam a competitive location for foreign manufacturing investment?
2. Q2. Is 100% foreign ownership allowed in manufacturing in Vietnam?
3. Q3. What are the different modes of entry for foreign manufacturers in Vietnam?
4. Q4. Which provinces or industrial zones are most suitable for export manufacturing?
5. Q5. What is the realistic timeline from investment decision to factory production start in Vietnam?
6. Q6. What is the minimum registered capital required for a foreign-invested manufacturing company in Vietnam?
7. Q7. How does Vietnam’s regulatory framework for manufacturing investment compare to other Southeast Asian destinations?
8. Q8. What industry sectors are restricted or conditional for foreign investors in Vietnam?
9. Q9. What are the key risk factors foreign manufacturers should assess before committing to Vietnam?
10. Q10. Can a foreign company test the market with a representative office before setting up a factory?

II. Legal Structure and Incorporation (Q11–Q20)

Answered in: Vietnam Factory Setup FAQ — Section II

1. Q11. What is the difference between an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC)?
2. Q12. When must the IRC be obtained before the ERC in Vietnam?
3. Q13. What legal entity types are available to foreign manufacturers in Vietnam?
4. Q14. What charter capital amount should a foreign-invested manufacturing company register?
5. Q15. What is the timeline for capital contribution after receiving the IRC?
6. Q16. Can a foreign company appoint a foreign national as legal representative in Vietnam?
7. Q17. What are the governance requirements for a foreign-invested LLC in Vietnam?
8. Q18. Can a single foreign investor own 100% of a Vietnamese manufacturing company?
9. Q19. What is the procedure for amending the IRC after the company is established?
10. Q20. What ongoing corporate governance obligations does a foreign-invested manufacturing company have?

III. Location and Industrial Land (Q21–Q30)

Answered in: Vietnam Factory Setup FAQ — Section III

1. Q21. What is the difference between an industrial park, export processing zone and industrial cluster in Vietnam?
2. Q22. How does a foreign company lease land in a Vietnamese industrial park?
3. Q23. What are the typical lease terms for industrial land in Vietnam?
4. Q24. Who are the major industrial park developers in Vietnam?
5. Q25. What due diligence should a foreign investor conduct before signing an industrial park sub-lease?
6. Q26. What infrastructure and utilities should a foreign manufacturer verify at an industrial park?
7. Q27. Can a foreign-invested factory be located outside of an industrial park?
8. Q28. How do expansion rights work for factory land in Vietnamese industrial parks?
9. Q29. What happens to the land lease if the industrial park operator changes or is acquired?
10. Q30. How does land use right registration work for foreign-invested factories in Vietnam?

IV. Licensing and Approvals (Q31–Q40)

Answered in: Vietnam Factory Setup FAQ — Section IV

1. Q31. What is the correct sequence of approvals for setting up a foreign-invested manufacturing factory in Vietnam?
2. Q32. What documents are required for an IRC application in Vietnam?
3. Q33. What is the statutory timeline for IRC approval and what are the realistic processing times?
4. Q34. Which authority approves the IRC for a manufacturing project in Vietnam?
5. Q35. What triggers an Environmental Impact Assessment (EIA) and how long does it take?
6. Q36. What is the construction permit process for a factory in Vietnam?
7. Q37. What fire safety approvals are required for a factory in Vietnam?
8. Q38. Can a foreign company import and install machinery before receiving the ERC?
9. Q39. What sector-specific approvals are required beyond the IRC and ERC?
10. Q40. What happens if the approved project scope needs to change after IRC issuance?

V. Environmental, Construction and Operational Readiness (Q41–Q50)

Answered in: Vietnam Factory Setup FAQ — Section V

1. Q41. What environmental permits are required before a factory can start production in Vietnam?
2. Q42. What is the Environmental Impact Assessment process for manufacturing projects?
3. Q43. What is the difference between an EIA and an Environmental Protection Plan?
4. Q44. What fire safety standards apply to foreign-invested factories in Vietnam?
5. Q45. Who inspects and certifies fire safety compliance before factory operation?
6. Q46. What are the construction permit requirements for factory buildings in Vietnam?
7. Q47. Can construction begin before an EIA is approved?
8. Q48. What is the legal definition of “production commencement” in Vietnam?
9. Q49. What operational readiness checklist should a factory complete before starting production?
10. Q50. What are the most common delays between construction completion and legal production start?

VI. Tax, Accounting and Incentives (Q51–Q60)

Answered in: Vietnam Factory Setup FAQ — Section VI

1. Q51. What corporate income tax (CIT) rate applies to foreign-owned factories in Vietnam?
2. Q52. What CIT incentives are available for manufacturing companies in priority sectors or zones?
3. Q53. When does the CIT tax holiday begin — and what is the most common timing mistake?
4. Q54. What VAT obligations apply to foreign-invested manufacturing companies?
5. Q55. How do transfer pricing rules apply to intra-group transactions in Vietnam?
6. Q56. What withholding tax (foreign contractor tax) applies to payments to foreign service providers?
7. Q57. What accounting standards must a foreign-invested company in Vietnam use?
8. Q58. When must a foreign-invested manufacturing company submit its annual financial statements?
9. Q59. What are the import VAT obligations for machinery and raw materials?
10. Q60. What are the most common tax compliance risks for foreign-owned factories?

VII. Labor, Expatriates and HR Compliance (Q61–Q70)

Answered in: Vietnam Factory Setup FAQ — Section VII

1. Q61. What work permit categories are available for foreign managers and technical staff in Vietnam?
2. Q62. What documents are required to apply for a work permit in Vietnam?
3. Q63. How long does work permit approval take in Vietnam?
4. Q64. How many foreign employees can a foreign-invested company employ in Vietnam?
5. Q65. What are the employer’s social insurance obligations for a factory workforce?
6. Q66. What minimum wage applies to factory workers in Vietnamese industrial zones?
7. Q67. What must a company’s Internal Labor Regulations include and when must they be registered?
8. Q68. What overtime rules apply to factory workers in Vietnam?
9. Q69. What are the trade union requirements for a foreign-invested factory?
10. Q70. What are the key HR compliance risks for foreign-invested factories in Vietnam?

VIII. Customs, Import-Export and Supply Chain (Q71–Q80)

Answered in: Vietnam Factory Setup FAQ — Section VIII

1. Q71. What machinery and equipment qualify for import duty exemption?
2. Q72. What is the difference between an Export Processing Enterprise (EPE) and a standard FIE?
3. Q73. What customs procedures apply when importing machinery for factory setup?
4. Q74. What certificate of origin requirements apply to exports from Vietnam?
5. Q75. How does EPE customs status affect VAT and import duty obligations?
6. Q76. What documentation is required for raw material imports?
7. Q77. Can a factory store bonded goods before customs clearance?
8. Q78. What are the customs compliance risks for foreign manufacturers?
9. Q79. What contract risks exist when sourcing raw materials from Vietnamese domestic suppliers?
10. Q80. What export licenses or restrictions apply to manufactured goods from Vietnam?

IX. Post-Licensing and Operational Compliance (Q81–Q90)

Answered in: Vietnam Factory Setup FAQ — Section IX

1. Q81. What are the capital contribution deadlines and what happens if they are missed?
2. Q82. How does a foreign-invested company open and operate foreign currency accounts?
3. Q83. How does a foreign-invested company legally start issuing invoices?
4. Q84. What foreign loan registration obligations apply?
5. Q85. What annual reporting obligations does a factory have to the DPI?
6. Q86. What customs reporting obligations apply to EPE factories on an ongoing basis?
7. Q87. How does a foreign company repatriate profits from Vietnam?
8. Q88. What triggers an annual financial audit and when are audit reports due?
9. Q89. What are the ongoing tax compliance obligations for a foreign-invested factory?
10. Q90. What are the most common post-licensing compliance failures for foreign-invested factories?

X. Risk Management, Disputes and Exit Strategy (Q91–Q100)

Answered in: Vietnam Factory Setup FAQ — Section X

1. Q91. What are the most common legal risks in industrial park lease agreements?
2. Q92. How can a foreign investor protect against regulatory risk in Vietnam?
3. Q93. What intellectual property protections are available for foreign manufacturers in Vietnam?
4. Q94. What dispute resolution mechanisms are available to foreign investors in Vietnam?
5. Q95. How does commercial arbitration work for disputes with Vietnamese counterparties?
6. Q96. What investor protections are available under Vietnam’s Bilateral Investment Treaties?
7. Q97. What are the key indicators that a factory project is facing regulatory delay rather than normal processing?
8. Q98. How can a foreign company exit an industrial park sub-lease before the term expires?
9. Q99. What is the process for winding up a foreign-invested manufacturing company in Vietnam?
10. Q100. What legal issues should a foreign investor address when selling or transferring ownership of a Vietnamese factory?