The need of establishing FDI enterprises is increasing because Vietnam is attracting a lot of foreign investors, especially in the manufacturing sector. Industrial parks and export processing zones are reliable places where foreign investors want to set up factories and operate.
However, in order to open a manufacturing company in an industrial park, an export processing zone will have to carry out more complicated and special procedures than foreign-invested companies operating in the service sector outside the industrial parks and export processing zones. It is probably difficult for foreign investors to invest in Vietnam for the first time.
What is an enterprise operating in an export processing zone (export processing enterprise)?
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According to Article 2(10) of Decree 82/2018/ND-CP, the concept of export processing enterprises is defined as follows:
“Export processing enterprise is an enterprise established and operating in an export processing zone or an enterprise specializing in the production of export products operating in industrial parks or economic zones.”
Export processing enterprises that are not located in export processing zones are separated from outside areas according to the regulations applicable to non-tariff zones in the law on export and import taxes.
From the above concept, it can be seen that an export processing enterprise is an enterprise specializing in the production of export goods. Export processing enterprises can be located in export processing zones or in industrial parks and economic zones. If the export processing enterprise is located outside the export processing zone, it is necessary to separate it from the outside areas by a hard fence, with the inspection and supervision of goods and means of entry and exit like the export processing zone.
Conditions for establishing FDI export processing enterprises
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For export processing enterprises with foreign capital, they must satisfy both regulations and conditions of export processing enterprises and enterprises with foreign capital. Therefore, first of all, foreign investors need to meet the conditions to establish a company with foreign capital in Vietnam such as not doing business in prohibited industries and specific conditions for each industry according to the following steps:
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Carry out procedures for issuance of Investment Registration Certificate (IRC).
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After being granted an investment registration certificate (IRC), the investor shall carry out the procedures for applying for an enterprise registration certificate (ERC).
In addition, according to Article 30, Decree 82/2018/ND-CP, export processing enterprises also need to meet specific conditions such as:
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Export processing enterprises that are not in export processing zones, must be separated from normal enterprises by a system of fences and separate entrances as prescribed for non-tariff zones. They must ensure inspection and supervision conditions of customs and functional agencies. Currently, many customs departments require export processing enterprises to install surveillance cameras connected to customs departments.
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All manufactured goods must be 100% exported abroad.
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Officials and employees working in export processing zones, export processing enterprises, when bringing foreign exchange from inland Vietnam into export processing zones, export processing enterprises and vice versa are not required to make customs declarations.
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When an export processing enterprise is permitted to do business in goods trading and activities directly related to the purchase and sale of goods in Vietnam, it must open a separate accounting book for revenue and expenses related to its operations purchase and sell goods in Vietnam and arrange a goods storage area separate from the goods storage area in service of production activities of export processing enterprises or establish a separate branch located outside the export processing enterprise, processing to perform this activity.
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There must be a written consent from the customs departments on the approval of the establishment of an export processing enterprise.
Notes for investors when establishing an FDI manufacturing company in an industrial park in Vietnam
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- Note on the selection of manufactured products: Investors should know that not all fields are allowed to invest in business and manufacture in Vietnam, so investors should carefully consider the laws of Vietnam. as well as international treaties to which Vietnam is a member.
For example: Schedule of commitments to liberalize trade in services of Vietnam in GATS.
Accordingly, Vietnam will have restrictions on investment methods or forms of investment and business establishment for certain industries.
Or in the Investment Law, it also stipulates the professions that are prohibited or restricted from doing business.
Thus, the investment industry is the first thing that investors need to pay attention to avoid being rejected for business investment, causing loss of time and money for investors.
- Note on investment location selection: Investors need to carefully choose suitable investment locations. For a manufacturing company in an industrial park, investors need to choose an industrial park based on factors such as the planning of the industrial park, land rent, incentives of the industrial park, location advantages. geography…
- Notes on investment capital and capital contribution to establish a company: The manufacturing sector, especially manufacturing in industrial parks, is often large projects. Investors need to have a capital determination suitable to the scope and scale of the project to ensure the feasibility to avoid affecting the production process when the factory comes into operation.
Charter capital must be contributed according to the time limit registered on the Investment Registration Certificate and must not exceed 90 days.
- Notes on construction of facilities: If building a production plant in an industrial park, investors should pay attention to the construction of factories, workers' quarters, and the installation of machinery and equipment systems for production. Especially for high-tech manufacturing industries, it is necessary to pay more attention to transportation and installation of production lines.
- Note on labor: Foreign-invested enterprises, when established in Vietnam, must comply with Vietnam's regulations on the use of employees. For companies operating in the manufacturing sector, it will need a large number of workers, so investors need to have a specific recruitment plan and prepare in advance so as not to affect the company's production activities.
Investors can hire Vietnamese or foreign workers. If employing foreign workers, it is necessary to carry out procedures for applying for a work permit for that foreign worker.
- Notes on project reporting: When establishing an FDI enterprise, according to Vietnamese law, the investor must conduct the investment project reporting regime, register an account and comply with the reporting regime. projects through the National Investment Portal.
In addition to the separate issues to be noted above, FDI enterprises must also fully comply with the same regulations as domestic enterprises when conducting business such as using seals, paying taxes, etc.
Legal basis
Consultation on establishing FDI enterprise in industrial parks and export processing zones that Siglaw provides:
"Customer satisfaction is the measure of Siglaw's success. To us, every customer is a brand ambassador!"
Therefore, Siglaw takes care of each customer in the most thoughtful way, when using the consultation on establishing FDI enterprise in industrial parks and export processing zones of Siglaw, customers will receive the most enthusiastic support as follows:
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Provide consultation and answer to customers the provisions of the current law related to the establishment of enterprises with foreign capital in industrial parks, export processing zones in Vietnam.
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Provide consultation and analyze various types of businesses in Vietnam for customers to choose the right type for their needs.
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Provide consultation on advantages and legal incentives of each type of business so that customers can make a suitable choice.
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Provide consultation on tax incentives, legal incentives of enterprises in industrial parks and export processing zones.
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Provide consultation and analyze and select industrial parks and export processing zones in accordance with the needs and desires of customers.
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Provide consultation on legal issues related to the construction of production plants, housing for employees.
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Guide investors to prepare financial statements, financial documents and other relevant legal documents.
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Provide consultation on preparing all necessary documents to apply for the establishment of a foreign-invested manufacturing company in an industrial park or export processing zone.
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Monitor the processing of applications by competent state agencies.
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Provide consultation on operational issues, relevant annual reports.
Service quality standards:
At Siglaw, with the slogan "Confidential - Responsible - Professional - Prestigious", we establish "Standards for providing services to customers" and all Siglaw's lawyers and experts always perform at the highest level:
1. High professional quality: Our legal services are always counseled and performed by lawyers and experts with deep professional knowledge and experience to ensure the consulting solutions are always accurate, comply with the law and bring high value to customers.
2. Confidentiality: Ensuring the security of customer information is, in any case, always one of our top priorities.
3. Punctuality: We guarantee to meet the requirements of the work deadlines. Accordingly, the work progress will always be closely followed and promptly informed to customers.
4. Quick response: Any exchange, contact or customer request will be responded to quickly, promptly or within 24 hours at the latest.
5. Integrity: We always maintain integrity in all cases, comply with regulations on professional ethics in all cases.
6. Professionalism: We bring professionalism in the deep legal knowledge of our team of Lawyers and Experts in any profession or field; professionalism in multilingual communication when customers always feel easy to exchange work with us in many different languages (Vietnamese, English, Chinese, Korean); professionalism in attitude and working style with customers.
7. Enthusiasm and friendliness: We are always ready to support our customers to the best of our ability and in any case. We ensure that our clients always feel comfortable and at ease with friendly communication with any Lawyer.
8. Simple and Convenient: We always strive to find ways to provide our services in a way that makes our customers feel as comfortable and convenient as possible.
9. Value added: In the process of providing services, we always try our best to provide consulting options/suggestions to help customers compare and choose the best and complete solution.
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