Foreign individuals and entities are flocking to Vietnam’s economic free zones in recent years, looking to form their manufacturing companies and enjoy the tax benefits for their products distribution and export. There are significant industrial zones in Vietnam, and they have emerged as a powerhouse for different industries, ranging from light to heavy. Here is a comprehensive guide.
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Free Zones in Vietnam
1. Vietnam-Singapore Industrial Park (VSIP)
This industrial park was built in 1996 and is known as one of the best world-class industrial parks. VIP’s projects are available in Binh Duong of northern Vietnam and Hai Phong and Bac Ninh in southern Vietnam.
Main investment projects in VSIP include electronics, automotive components, consumer goods, and pharmaceuticals.
2. Hiep Phuoc Industrial Park (HPIP)
The establishment of HPIP dates back to 2007, and this industrial park is situated in Nha Be District of Ho Chi Minh City.
HPIP has ready-built factories that spread across 4,000 hectares of industrial land. Export activities are vibrant in this industrial zone thanks to its accessibility to developed transportation infrastructure and roads.
3. Phuoc Dong Industrial Park (PDIP)
Situated between Trang Bang district and Go Dau district, this free zone is considered one of the most innovative and environmentally-focused commercial and manufacturing parks in Vietnam.
PDIP’s major investment industries are biofuel, steel components, logistics, support services, construction materials, and textile.
4. Dinh Vu-Cat Hai Economic Zone
This 22,540-hectare industrial zone is an essential coastal free zone in Vietnam strategically located in Hai Phong.
Machinery, electronic and telecommunication, chemical, science, and electrical equipment are the major industries in this free zone.
Reasons to Set up a Business in Vietnam Free Zone
Setting up a company in the right Vietnam free zone can serve as a strategic advantage for businesses in the long run. Currently, Vietnam has 250 industrial and export processing zones in four major economic zones: Southern Key Economic Zone (SKEZ), Central Key Economic Zone (CKEZ), Northern Key Economic Zone (NKEZ), and Mekong River Delta Economic Zone (MeKEZ).
Below are the reasons why foreign entrepreneurs establish their firms in free zones in Vietnam:
1. Reap the Tax Benefits
- Companies can enjoy reduced corporate income tax with a tax rate of 10% for a maximum of 15 years
- Foreign and local employees are eligible for a 50% reduction in personal income tax
- Approved projects are exempted from corporate income tax for a maximum of 4 years
2. Enjoy Additional Government Incentives
- High-technology projects have a 10% income tax rate reduction for a maximum of 30 years
- Socialized projects such as education and health are qualified for a 10% reduced tax rate throughout the entire project
- Imported, manufactured, or processed goods within the industrial zones are exempted from value-added tax (VAT) and excise tax
- Raw materials imported for manufacturing in Vietnam industrial zones are eligible for a 5-year tax holiday
3. More Benefits for Trading Companies
- Tariff cuts are applicable for company with goods traded in the ASEAN regions
- Areas with difficult socio-economic conditions get support from the government for their infrastructure development
- Companies can have access to the government’s preferential grants and are exempted from land rental fees
- Easy accessibility to low-cost labor with US$96 to US$138 monthly minimum wage
How Cekindo can Assist
Cekindo provides a wide range of business setup services in Vietnam’s free zone and across the country. Our clients include startups, medium enterprises, and large corporations from different domains. Expertise, quality, and trust are the trademark of our firm. Not to mention, our proven growth formula is one of the deciding factors to ensure the success of your business set up in the Vietnam free zone.
Starting a business in Vietnam is much more comfortable with assistance from the right professionals. Your success as an entrepreneur in Vietnam is our greatest reward. Check out Cekindo’s prestigious company setup services and other business support. Complete the form below.