What is an export processing enterprise? What is an export processing zone?

Export processing enterprises in export processing zones

1. What is an export processing zone?

According to point (a) of Article 2.1 of Decree 82/2018/ND-CP on management of industrial parks and economic zones, export processing zones are defined as follows:

“Export processing zone means an industrial park specially intended for manufacture of exported goods, rendering of services meeting the needs of production of exported goods and is established in conformity with conditions, processes and procedures as applied to industrial parks in accordance with this Decree. 

Export processing zone is separate from outside in accordance with regulations so applied to free trade zones prescribed in laws on import and export duties.”

Thus, it can be understood that an export processing zone is an industrial zone specializing in manufacturing of exported goods. 

An export processing zone must have a defined geographical boundary, separated from the outside area by hard fences, with gates and entrance and exit to fulfill requirements for inspection, supervision, and control activities of the customs authorities, also there is a customs office to supervise and inspect goods and vehicles entering and exiting the zone.

2. What is an export processing enterprise?  

According to Article 2.10 of Decree No. 82/2018/ND-CP, export processing enterprise means:

“Export processing enterprise means a company which is established and operated within an export processing zone, or an enterprise specializing in manufacturing exported products within an industrial park or economic zone. 

Export processing enterprise which is not located in export processing zones shall be separated from the outside area as per the regulations on non-tariff areas laid down in the import and export tax law.”

Based on the above concept, an export processing enterprise is an enterprise specializing in manufacturing of exported goods. Export processing enterprises can be 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 essential to separate it from the outside areas by hard fences, with inspection and supervision of goods and vehicles entering and exiting like the export processing zone.

3. Legal basis

Decree 82/2018/ND-CP on management of industrial parks and economic zones dated 22 May 2018.