Comprehensive Guide to Entering Vietnam’s Manufacturing Industry: Benefits, Procedures, and Keys to Success

Vietnam has firmly established itself as the "new factory of the world," becoming an unmissable destination for global manufacturers. With supply chain shifts accelerating globally, establishing a manufacturing base in Vietnam is not just a cost-cutting strategy but a critical move to ensure flexibility and access to the dynamic Asian market.

Establishing a manufacturing base in Vietnam for supply chain flexibility

This article, Kizuna - a leading partner in the ready-built factory sector, offers you a comprehensive guide. We will analyze the core benefits, essential legal procedures, and proven strategies for success, helping your business quickly realize its production goals in this promising market.

1. Unmatched Advantages of Manufacturing Investment in Vietnam

The decision to invest in Vietnam brings a range of competitive advantages, underpinned by favorable economic and political factors.

1.1 Competitive Operating Costs

Labor costs in Vietnam remain significantly competitive compared to traditional manufacturing hubs in the region. This helps businesses minimize their overall production expenses. Furthermore, the Vietnamese Government offers various corporate income tax incentives and land rent exemptions in industrial parks, helping to maximize profitability.

Foreign investors benefiting from Vietnam’s competitive operating costs

1.2 Strategic Geographic Location and Vast Market Access

Vietnam holds a strategic position, situated near international shipping routes and serving as the gateway to Southeast Asia. The country is an active participant in numerous crucial Free Trade Agreements (FTAs), including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA), and the Regional Comprehensive Economic Partnership (RCEP). These FTAs allow businesses to benefit from preferential tariffs, facilitating easy export to large markets like the EU, Japan, South Korea, and North America.

Citation: According to the UNCTAD World Investment Report 2023, Vietnam continues to be one of the world's leading destinations for FDI attraction, confirming its status as a vital link in the global supply chain.

1.3. Abundant and Young Workforce

Vietnam has a population of nearly 100 million with a favorable "golden population structure." The young workforce is capable of quickly adapting to new technology and skills, meeting the demands of high-tech industries such as electronics, automotive, and general manufacturing.

2. Essential Legal Procedures and Process

To enter the manufacturing sector, foreign investors must adhere to the following legal steps:

2.1 Project Preparation and Investment Registration

1. Select Investment Form: Decide whether to establish a 100% Foreign-Invested Enterprise (FIE) or a joint venture.
2. Choose Location: This step is crucial, determining logistics costs, labor access, and proximity to suppliers.
3. Apply for Investment Registration Certificate (IRC): The investor submits the application to the Department of Planning and Investment (or the Management Board of the Industrial/Economic Zone). This is the first license confirming the right to implement the project in Vietnam.

Enterprise Registration Certificate (ERC) in Vietnam

2.2 Enterprise Establishment and Project Deployment

1. Apply for Enterprise Registration Certificate (ERC): After obtaining the IRC, the business proceeds to register its legal entity.
2. Open Capital Account: Open a bank account to transfer investment capital into Vietnam.
3. Apply for Specialized Licenses: Depending on the industry (e.g., chemical production, pharmaceuticals, wastewater treatment), the business must apply for relevant environmental and fire safety permits.
4. Construct or Rent Factory Space: Proceed with factory construction or sign a lease agreement for a ready-built factory.

Note: Custom construction (build-to-suit) typically takes 12–18 months. The solution of renting a ready-built factory allows businesses to bypass the construction phase and potentially start production within just 3–6 months.

3. Keys to Success for Manufacturing Businesses in Vietnam

Market understanding and the right partnership strategy are decisive factors for long-term success.

3.1 Optimizing Cost and Time with Ready-Built Factory Solutions

For businesses requiring rapid market entry, the ready-to-use factory model is the optimal choice.

• Minimize Investment Risk: Avoid the large initial capital outlay for land purchase and construction.
• Save Time: Start production faster, maximizing time spent on product focus and sales.
• Synchronous Infrastructure: Ensure stable power supply, centralized wastewater treatment systems, and 24/7 security.

3.2 Ensuring Comprehensive Management and Operational Systems

Cultural differences and language barriers can complicate administrative and HR management. A comprehensive operational support system is essential.

• Legal and Administrative Support: Partner with providers who assist with local compliance, tax, and accounting procedures.
• HR Support: Efficiently recruit, train, and manage labor in accordance with Vietnamese law.
• Multilingual Support Services: Ensure smooth communication between foreign management and local operational teams.

3.3 Building a Sustainable Partnership

Choosing a reputable industrial real estate provider is not just about leasing space; it's about selecting a support ecosystem. Partners like Kizuna provide "One-Stop Service" to help investors solve every issue, from project initiation to stable operation.

4. Conclusion: Transforming Challenges into Opportunities with Kizuna

Cost-efficient factory leasing solutions by Kizuna for international businesses

Vietnam is truly a promising platform for global manufacturing, but success requires thorough preparation and a smart partnership strategy. Choosing the Ready-built Factory model is not only a strategy to optimize cost and time, but also a smart move to avoid complex legal and operational barriers.

Kizuna Factory offers more than just factory space; we provide a complete solution. From the advantage of our strategic location and synchronous infrastructure to our "One-Stop Service" system with multilingual support (including Japanese and Korean) covering legal, administrative, and HR needs—Kizuna is the key partner that helps foreign businesses transition quickly from idea to stable and efficient production operations.

Don't let administrative hurdles impede your growth. Partner with Kizuna to turn market entry challenges into a competitive advantage, and start your journey toward sustainable success in Vietnam today.

Contact us for a free consultation on the most suitable factory solution and learn how Kizuna can help you focus entirely on your core manufacturing activities.