Depending on the specific characteristics of each manufacturing sector, there are different provisions of the law. Below are several notable issues when starting a manufacturing business in Vietnam

Firstly, headquarters location

Enterprises operating in the sectors of producing, processing, farming, etc. are not permitted to be headquartered in densely populated areas or urban areas but only in adjacent regions far away from residential areas. In case where an enterprise wishes to place its headquarters within the city, such enterprise may only conduct the activities of purchasing and selling goods and displaying products and is required to establish factories/branches in adjacent areas for production, processing, farming, etc.

Once the proposed location has been determined, the enterprise needs to check the legal information of the site, such as the land use purpose, land use term, dispute status, or security measures being applied. One of the most crucial issues to note is to contact and check the planning related to the location before signing a deposit or rental contract.

With the specificity of the manufacturing sector, the enterprise needs to prioritize choosing locations that are stable and long-term. Avoid the case of having to change the head office address many times, affecting the business and production activities of the enterprise.

Secondly, regulations on environmental protection

Depending on the nature, scale, and capacity of a project, the project owner must register for the environment, apply for an environmental permit, prepare reports on environmental protection, periodical environmental monitoring reports, environmental impact assessment reports, or other environmental protection schemes in accordance with regulations.

Enterprises may be fined from VND 500,000 to VND 15,000,000 for violations of regulations on environmental registration, from VND 10,000,000 to VND 100,000,000 for violations of regulations on environmental impact assessment, from VND 5,000,000 to VND 500,000,000 for violations against regulations on environmental permits under Decree 45/2022/ND-CP on penalties for administrative violations in the field of environmental protection.

For specific activities of each enterprise, information on environmental protection will be regulated differently, such as the object of goods intended to be produced, capacity, design, wastewater treatment, emissions, etc.

In case an enterprise locates a production plant in an industrial park or export processing zone, the enterprise must comply with specific regulations applicable to that industrial park or export processing zone.

Thirdly, sublicenses

Depending on certain manufacturing and trading sectors, enterprises are required to apply for one or several business licenses/business eligibility certificates/other documentation (collectively referred to as “sublicenses”) as provided for by laws before operating

For instance:

  • For the veterinary drug manufacturing industry, the enterprise must have a license to manufacture veterinary drugs.
  • For the bottled drinking water industry, the enterprise must have a Certificate of eligibility for food hygiene and safety and a Certificate of Product Standard Announcement (after obtaining a Certificate of eligibility for food hygiene and safety)

Manufacturing activities have some characteristics and are more complicated than normal business activities, the purchase and sale of goods and the provision of services. Therefore, when establishing and operating a business in the field of manufacturing, the company needs to understand the legal regulations governing its activities and the tasks that must be performed to avoid penalties for violations.

The article is based on laws applicable at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable laws and the specific cases that the reader may wish to apply may have changed. Therefore, the article is for referencing only.


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