Establishing Chinese manufacturing company in Vietnam

Vietnam is currently a strategic destination for many Chinese investors in the manufacturing sector, thanks to its favorable geographical location, competitive labor costs, and increasingly stable investment environment. Establishing a Chinese manufacturing company in Vietnam not only helps businesses expand their markets and optimize supply chains but also allows them to leverage preferential treatments from the free trade agreements Vietnam has joined. However, to operate legally and efficiently, investors need to thoroughly understand the legal regulations related to business conditions, investment procedures, and enterprise registration, as well as issues concerning taxation, environment, and land use in Vietnam. In the article below, Viet An Law Firm will provide clients with important legal information related to establishing Chinese manufacturing company in Vietnam.

Conditions for establishing chinese manufacturing company in Vietnam

Market access conditions for foreign investors, specifically Chinese investors

According to Vietnam’s commitments to the WTO, manufacturing activities are classified under services incidental to manufacturing (CPC 884 and 885). In the first three years after joining the WTO, Vietnam imposed restrictions on foreign investors in this sector, only allowing the establishment of joint ventures with foreign ownership not exceeding 50%. However, these restrictions have now been lifted, and foreign investors—including Chinese investors—can establish manufacturing enterprises in Vietnam with 100% foreign capital.

Conditions regarding project location (Factory)

Foreign investors who wants to establish a company operating in the manufacturing sector must prove they have a factory location within industrial parks or industrial clusters that meets the conditions related to the investor’s manufacturing sector. Companies are not permitted to be established with factories outside industrial parks or industrial clusters, unless the investor directly leases land from the state based on a specific proposal for investment policy approval.

Business sectors that Chinese manufacturing companies can register

Currently, with a diverse range of manufacturing business sectors, enterprises can choose business lines that suit their financial and human resource conditions. According to Point a, Clause 1, Article 27 of the Enterprise Law, one of the conditions for an enterprise to be granted an Enterprise Registration Certificate is that the registered business lines are not prohibited from investment and business. Enterprises are only permitted to conduct business activities that have been registered with the competent state authorities.

Common manufacturing sectors chosen by enterprises include:

• 1010: Processing and preserving of meat and meat products
• 1020: Processing and preserving of fisheries and fishery products
• 1030: Processing and preserving of fruit and vegetables
• 1520: Manufacture of footwear
• 1610: Manufacture of wood and of products of wood and cork, except furniture; manufacture of products of straw and plaiting materials
• 1680: Manufacture of feeds for cattle, poultry and aquatic animals
• 1709: Manufacture of other articles of paper and paperboard

Procedures for establishing chinese manufacturing company in Vietnam

Step 1: Register Investment Registration Certificate (IRC)

Required documents include:

• A written request for permission for execution of the investment project;
• A copy of the passport (if the investor is an individual);
• An investment proposal;
• Copies of bank confirmation stating a balance corresponding to the investment amount;
• If the project does not use land allocated, leased out by the State, or is not permitted by the State to change land purposes, a copy of documents proving land use rights must be submitted: real estate lease contract, land use right certificate, construction decision, or other documents proving the project location;
• The explanation for the application of technologies to the project mentioned in the List of technologies restricted from transfer under the law on technology transfer;
• Other documents related to the investment project, requirements for conditions, and investor capacity as stipulated by law (if any).

Competent authority: Department of Finance

Processing time: 15 days from the date of receipt of a complete and valid application

• If the application is not valid, the competent authority will respond in writing, stating the reasons
• If the application is valid, the enterprise will receive the Investment Registration Certificate

Step 2: Register Enterprise Registration Certificate (ERC)

Required documents include:

• An application form for business registration;
• The company’s charter;
• A list of members (for limited company) or stakeholders (for joint-stock company);
• List of beneficiary owner;
• Certified copies of: Copies of the ID card or other ID papers of members being individuals; certified copies of Enterprise Registration Certificate of organizational members; certified copies of valid ID card or passport of the legal representative of that organization;
• Investment Registration Certificate of the Chinese investor obtained in the previous step.

Competent authority: Department of Finance

Processing time: 03 working days.

Step 3: Complete other procedures

• Seal engraving and company signage:
• Once the enterprise has its tax code, engraving the corporate seal is an important step to complete the establishment procedures. The corporate seal is the official identifier of the enterprise, used in transactions and legal documents.
• Additionally, the enterprise must display its company name signage at its headquarters. Information printed on the sign must comply with regulations.
• Opening bank accounts:
• Investors submit documents to their chosen bank. The bank will appraise the documents and open an investment capital account for the investor.
• After opening the investment capital account at the bank, the Chinese company proceeds with its capital contribution obligations. The enterprise must ensure that the committed capital is fully contributed within 90 days from the date of issuance of the Enterprise Registration Certificate, in accordance with Vietnamese law. Capital transfer is performed by transferring money from the investor’s overseas account to the investment capital account in Vietnam. Once the transaction is complete, the bank will provide written confirmation of the capital contribution as legal grounds for subsequent procedures.
• Purchasing digital signatures and invoices.
• Registering for electronic tax filing.

Note: The above procedures apply to establishing a new manufacturing company with 100% Chinese capital or less. However, there is also a case for establishing a Chinese manufacturing company in Vietnam through the acquisition of capital contributions or shares in a Vietnamese enterprise. Clients can find more detailed information in Viet An Law Firm’s article on “Establishing Chinese Company in Vietnam.”

Examples of Chinese Manufacturing Companies in Vietnam

TOP OPTO Technology Co., Ltd

• Tax code: 0302060291
• Address: Zone C, Lot U.32b-34-36, Street 22, Tan Thuan Export Processing Zone, Tan Thuan Dong Ward, District 7, Ho Chi Minh City, Vietnam.
• TOP OPTO Technology Co., Ltd. was established in 2000 with 100% foreign investment. The company currently operates in the manufacturing of optical glass products, with a workforce of over 1000 employees.

Tenwei Vietnam Technology Co., Ltd

• Tax code: 1101925839
• Address: Block B, COBI LOGIS II, Lot 3F-1, Street 12, Long Hau 3 Industrial Park, Long Hau Commune, Can Giuoc District, Long An Province, Vietnam
• Tenwei Vietnam Technology Co., Ltd. was established in Vietnam in 2019 with a current factory size of approximately 2000m². Currently, the company operates in the manufacturing of 3C digital communication products, chargers, electronic components, mobile phone power supplies,…

Center Power Tech Vietnam Co., Ltd

• Tax code: 3600892847
• Address: Road 5C, Nhon Trach II Industrial Park, Hiep Phuoc Town, Nhon Trach District, Dong Nai Province, Vietnam
• Center Power Tech Vietnam Co., Ltd. is a single-member limited liability company with investment capital from China. Center Power Tech Vietnam Co., Ltd. is currently listed among the large Chinese companies in Vietnam. The enterprise was established in 2007, in Nhon Trach 2 Industrial Park, Dong Nai Province. The company has a total area of over 73,000 square meters, with an investment capital of VND 708 billion.
• Currently, the company operates in the manufacturing of batteries for telecommunications and industrial use. The current workforce of the enterprise is approximately over 300 people.

Above is the advice of Viet An Law on the issue of establishing Chinese manufacturing company in Vietnam. Clients who have related questions or need legal support, please contact Viet An Law Firm for the best support!