Setting up a company in Vietnam free zones in 2022

invest in Vietnam free zone company

Since 2003, Healy Consultants Group PLC assist our Clients with setting up their business in Vietnam industrial zones (IZs) to benefit from reduced taxes and enjoy other numerous Government investment incentives. Vietnam industrial zones are ultimate spots for foreign entities looking to set up manufacturing companies in Southeast Asia with intent to distribute their products globally.

  • Advantages of setting up in a Vietnam free zone

    • Vietnam has a massive network of more than 250 industrial and export processing zones. The major zones are i) the Northern Vietnam Key Economic Region ii) Southern Key Economic Zone iii) Central Vietnam Key Economic Region and iv) Mekong River Delta Economic Zone. Each zone specialises in different sectors, thereby offering multinational Clients a wide range of choice.
    • Vietnamese free zones offer a wide range of tax benefits, including:
      • A 10% reduction in corporate income tax for up to 15 years for all projects.
      • A 10% reduction in corporate income tax for up to 30 years for high-tech projects.
      • A 10% reduction in corporate income tax for social projects such as health and education for the life of the project.
      • 100% corporate income tax exemption for up to four years for approved projects, followed by 50% corporate income tax reduction for up to nine years once the initial four-year exemption is complete.
      • A five-year exemption on import duties on raw materials for manufacturing.
      • A 50% reduction in personal income tax for both local and foreign employees.
    • Vietnamese free zones are especially attractive for manufacturing, because:
      • Manufacturers are exempt from paying import duties on raw materials for up to five years after production starts.
      • Manufacturers are also exempt from VAT and excise tax for goods processed or manufactured within an Industrial Zone.
      • Low labour costs compared with other Asian countries. Vietnam’s current minimum wage ranges from US$96-US$138 per month.
      • Lower utility costs compared to other Asian countries. For example, in a Vietnamese free zone, electricity prices average US$0.082 per kilowatt hour (kWh), compared with US$0.101 in Indonesia or US$0.112 in Thailand.
    • Vietnamese Industrial Zones are also attractive to trading companies because:
      • Industrial Zone companies benefit from reduced or zero tariffs on goods traded within ASEAN (of which Vietnam is a member).
  • Major industrial zones in Vietnam

    Vietnam Singapore Industrial Park (VSIP)

    • VSIP has projects located in Southern (Bac Ninh, Hai Phong) and Northern (Binh Duong) Vietnam.
    • Specialises in i) automotive components ii) electronics iii) pharmaceuticals and iv) consumer goods.

    Phuoc Dong Industrial Park (PDIP)

    • Specialises in i) logistics and supporting services ii) bio-fuel iii) construction materials iv) steel components and v) textiles.

    Hiep Phuoc Industrial Park (HPIP)

    • Specialises in i) leather processing ii) building materials iii) mechanics and iv) chemicals.

    Dinh Vu – Cat Hai Economic Zone

    • Specialises in i) electronics ii) telecommunications iii) machinery iv) electrical and science equipment and v) chemical industries.
  • Table comparing different free zones in Vietnam

    Summary at a glanceVSIP Binh DuongHPIPPDIPDinh Vu – Cat Hai
    Average annual industrial space rent per 1000 sqmUS$26,500US$31,200US$35,000US$29,000
    Company incorporation time3 months3 months3 months3 months
    How long to open company bank account1 month1 month1 month1 month
    Quality of utilitiesExcellentGoodGoodExcellent
    Allowed to sign sales contracts with Vietnamese ClientsYesYesYesYes
    Allowed to invoice Vietnamese ClientsYesYesYesYes
    Corporate tax payable in VietnamDependent on activityDependent on activityDependent on activityDependent on activity
    Corporate bank accountHSBCHSBCHSBCHSBC
    Physical office space requiredYesYesYesYes
    Industrial space availabilityManyLimitedManyMany
    Allowed to import raw material?YesYesYesYes
    Allowed to export goods?YesYesYesYes
    Wholly foreign ownedYesYesYesYes
    Can the entity hire expatriate staff in VietnamYesYesYesYes
    Minimum number of directors1111
    Minimum number of shareholders2222
    Tax registration certificate requiredYesYesYesYes
    Individual shareholders allowedYesYesYesYes
    Corporate shareholders allowedYesYesYesYes
    Public register of shareholders and directorsYesYesYesYes
    LLC company allowedYesYesYesYes
    Can apply for immigration visasYesYesYesYes
    Annual audited financial statementsYesYesYesYes
    Annual tax return to be submittedYesYesYesYes

Frequently asked questions

Contact us

For additional information on our free zone company registration services in Vietnam, please contact our in-house country expert, Mr. Simon Guidecoq, directly:
client relationship officer - Simon