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Establishing a Manufacturing Presence in Vietnam

Nov. 19 – When looking to expand your manufacturing business into Vietnam, there are a variety of key issues for which extra attention needs to be paid. You need to be aware of not just your potential location, but also what establishing a presence in that location means – specifically with regard to different zone types and any relevant tax or administrative issues.

Vietnam has a number of different zones throughout the country in which you can establish a manufacturing presence (e.g. industrial zones and economic zones), and you may be subject to different implications and/or tax rates or incentives when you establish your presence there.

The use of these zones has been beneficial for Vietnam as foreign-owned enterprises located within have created many new jobs for local Vietnamese workers, which has reduced the country’s unemployment rate. As of December 2011, these zones have created over 2 million new jobs, with more than 1.2 million in areas with foreign-invested capital.

Location, Location, Location
Throughout the world, especially in developing countries such as Vietnam, different types of zones play a major part in a country’s economic development.

The use of development zones started in Vietnam about 20 years ago when the United States lifted its trade embargo on the country. Firms investing in these zones typically enjoy preferential governmental policies and advantages like modern infrastructure and greater access to utility services on top of preferential tax and/or tariff rates.

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