Vietnam set up factories

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Question: I am Chinese. I want to set up a factory in Vietnam. My client is in Singapore Industrial Zone. I signed a contract with him.

So I want to set up a factory in Vietnam Industrial Zone. Do I need to apply for a certificate of processing and export enterprise?

What are the requirements for this certificate? What information do you need? How much is the charge?

Answer: SBLAW would like to advise you as follows:

Export Processing Enterprise (EPE) are enterprises specializing in production of export goods and provide services for production of export goods and export activities, which are established and operated under the Government's regulations on EPE.

EPE are exempted from export tax or import tax on goods exported from export processing zones to foreign countries or from foreign countries imported into export processing zones and enjoy tax incentives for special cases, especially encouraging investment in accordance with the provisions of Vietnam law.

According to Investment Law 2014, an investment in the form of the establishment of an economic organization will require a Foreign Investor to go through a two-step licensing process.

The first one is investment conditions and the second being business conditions (also known as business condition or baby permit).

In summary, under applicable laws the following procedures need to be implemented:

Step 1: Apply and obtain an Investment Registration Certificate (IRC) for the investment project, especially the status Export Processing Enterprise (EPE) shall be recorded in the IRC accordingly. In practice, depending on the local government of where the investment project is located, In-approval for Investment Decision must be granted by the Provincial Government prior to issuance of the Investment Registration Certificate to the investment project.

Step 2: Registration of a Foreign Invested Company conducting the investment project by obtaining Enterprise Registration Certificate (ERC) of the FIC.

Step 3: Registration of an Export Processing Enterprise (EPE) to the relevant Customs Departments.

Step 4: Upon obtainment of In-approval for Investment Decision (if any) and IRC and ERC, the FIC may need to apply for additional Business Licenses/Permits if so required by laws. This depends on the business line, products that will be manufactured, and whether the production will have an impact on the environment. Those Business Licenses may include:

o   Construction Permit – in case you intend to build a new factory or a warehouse;

o   Land Use Right Certificate (LURC) – in case you intend to rent a land to build factory/warehouse;

o   Register an Environmental Impact Assessment Report or an Environmental Protection Plan (depending on the scale of the project);

o   Fire Prevention and Fighting Certificate;

o   Announcement of technical regulations conformity; and

o   Other permits as the case maybe.



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