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A Complete Guide Of Moving Manufacturing To Vietnam
By VICO
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Guide Of Moving Manufacturing To Vietnam     

Vietnam is evolving at a speed that no one can even fathom and quickly surpassing China to becoming the prime destination for manufacturers. 
What does that mean? It is going to be the most important supply-chain hub in the ASEAN before you and I even realize. The manufacturing relocation will continue as companies seek to move their supply chains and lower costs but with more diversification.  Let take a look at the below information in this article that may help for your moving process. 

1. WHY YOU SHOULD MOVE PLANTS TO VIETNAM   

Doing business in Vietnam has opened up opportunities for foreign investors in different fields, especially after the huge impact of the US-China trade war. From the 7 emerging Asian countries for manufacturing, Vietnam has emerged as number one, due to: 

  • Young and skilled labor force: Cost of labor is half of what it is in China 

  • More free trade: Soon with EU, SEA, ASEAN, Russia, Trans-Pacific Partnership, Free trade with Japan and Korea 

  • Fewer restrictions on Foreign Direct Investment 

  • Less counterfeiting problems 

  • Lower Tariffs  

Other than the obvious, Vietnam is a nexus for the following industries: Clothing and textiles, Footwears, Plastic and rubber, Coffee, Wooden goods. South Korea was the largest source of FDI, following by Japan, Singapore, Taiwan, and Hong Kong. In addition, the manufacturing shift from China will continue as companies seek to move their supply chains and lower costs but with more diversification... 

  • The ongoing impact of global pandemic and supply chain disruptions 
  • Companies focus on resilience and avoiding disruption vs. efficiency and cost 
  • Labor costs in China will continue to rise 


vietnam investment
Doing business in Vietnam has opened up opportunities for foreign investors

2. CHALLENGES WHEN SET UP MANUFACTURING BUSINESS IN VIETNAM:  

On the other hand, doing business in Vietnam may go with some main potential challenges: 

  • Not likely in China, sub-vendors in Vietnam are limited, manufacturers still need to import machines or materials from other countries. The accommodation for workers and experts in the surrounding industrial areas is limited. 
  • Infrastructure for logistics is still developing with high logistics costs, currently accounting for about 20% of the country’s gross domestic product. Transport and information technology infrastructure is still weak and inconsistent, making multimodal transport services difficult. 
  • For big projects, it takes time to obtain an investment certificate. Vietnamese laws are often revised and supplemented by different agencies within the Vietnamese legal system. It is quite difficult for foreign investors to understand all the provisions of the law. 

>> Find more about Factory relocation service at VICO Logistics Solution

3. WHAT TO PREPARE FOR YOUR MANUFACTURING MOVING PLAN  

It is often difficult for companies to decide where to move, how they plan to enter the Vietnamese market, and where they will conduct business in the country. The steps that should be considered during the relocation include:  

>> ​Vietnam Foreign Investment Booming in 2022-2023 
  • Market research (Labour cost, Logistics cost, Taxation, Buyer Reference, Location & Political Situation, Supply Chain solution, Customs Regulation). 
  • Preliminary screening & identify an optimal location: site analysis  will have a major impact on the success of the business, affecting production, operations, and sales. 
  • Detailed due diligence & comparison model:  investigation, audit, or review performed to confirm facts to analyze and reduce the risk of a business or investment decisions.  
  • Site visit and final evaluation

Vietnam has three key economic regions (KERS) that held the majority of foreign investment within the country. 

  • The North of Vietnam with notable industrial zones:Dinh Vu, Yen Phong Industrial Park, VSIP Hai Phong with close proximity to China. This is an opportunity for companies seeking to quickly relocate operations and importing components from China.  
  • The Central of Vietnam includes key provinces for industrial investment: Nghe An, Quang Ngai, Hue, Da Nang with low costs, room to relocate along with other partners if required. But the supplier networks and high-end industrial zone here are not yet fully established locally. Therefore, this region is best suited with companies seeking long-term investment strategies and willing to relocate the majority of the supply chain over time.  

  • The South of Vietnam with diversified supply base and close proximity to the rest of southeast Asia with notable industrial zone such as Long Hau, My Phuc III, Nhon Trach,…This is an opportunity for companies seeking to diversify their supply chain and distribution network and are interested in targeting the domestic market.  


vietnam investment
Vietnam has three key economic regions (KERS) that held the majority of foreign investment within the country. 

4. COMMON DOCUMENTS REQUIRED FOR IMPORT- EXPORT CUSTOMS  

Let  discuss some of the common documents required for import customs clearance procedures and formalities in Vietnam. Hope this information may help you to know about documents required for clearance generally. This is part of VICO Logistics standard e-customs procedures for import-export processing and production to export. 

  • The Investment License   

  • Certificate For Tax Code Registration 

  • The License Owner Factory Or Contract Rent Factory.  

  • The List Worker And List Social Insurance Of Worker.  

  • The Customs Sheets Import Machines (If Machine Import) Or Red Invoice (If Machine Buying At Viet Nam) Or Contract Rent Machines  

  • The Drawing For Production Procedure.  

  • The Letter To Apply Customs  

  • Identical Or Passport Of Director  

  • Authority Letter.  

  • Processing Contract 

The current explosion in eCommerce in Vietnam should also present opportunities, especially for companies interested in last-mile delivery and value-added distribution services. If you are in need of assistance with matters regarding investment in Vietnam, let VICO Logistics be your logistics partner every step of the way to your success. We offer logistics and supply chain solutions for all clients & factories across China and Indochina. 


VICO LOGISTICS – Indochina Logistics Expert
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