Over the last 20 years, Vietnam has made a major transformation in national policy from an agricultural society to a clear emphasis on the manufacturing sector. The results have paid dividends as between 2010 and 2018, the country more than doubled its GDP and its standard of living has consistently increased. Today, industry contributes the largest share to Vietnam’s annual GDP. Featuring an expanding infrastructure, abundant natural resources, a young digitally-fluent workforce, tax incentives, and a stable government, it is no surprise that both FDI and domestic industrial growth has skyrocketed over the period. Further, unlike other countries in the region, there are no foreign ownership restrictions, which means that it is possible to establish 100% foreign-owned manufacturing companies (or to acquire up to 100% of existing Vietnamese manufacturing companies). Recently, foreign direct investment in industrial manufacturing reached $7,191 million in 2020 with a recorded 800 new projects and, despite the pandemic, appears to be on a long-term upward trajectory.
The list of manufacturing sectors in Vietnam is growing and surprisingly diversified. In the clothing, textiles and footwear industries, the country is now amongst the World leaders with nearly 10 percent growth yearly. Patagonia and The North Face do a majority of their production in Vietnam and H&M, Uniqlo, Gap, J.Crew, Nike, Adidas and many others have a vast manufacturing presence in Vietnam. In addition, other sectors, as diverse as plastics, furniture, agribusiness, construction materials and technology, are established and expanding as well. For example, Samsung produces a large share of its Galaxy smartphones in Vietnam and HP, Canon and others have significant manufacturing facilities. Traditionally, industry in Vietnam has been primarily concentrated in the South of the country, but this is changing. Foxconn, a key manufacturer for Apple and Sony, recently announced plans to move portion of its iPad and laptop assembly operations from China to a newly constructed factory complex in Bac Giang in northeast Vietnam.
There have also been recent developments in the law which add clarity and support the establishment of industry in Vietnam. For instance, a new draft decree submitted in 2021 increases the penalties for violations of industrial property rights. Further, Vietnam is moving in the direction of harmonizing its laws with international rules and practices in the environmental sphere. A new law on environmental protection, also introduced in 2021, provides greater detail regarding implementation as well as providing new legal requirements concerning waste management and environmental permits. In addition, the government offers various tax incentives such as Decree 57 which, as of June, 2021, allows enterprises supporting manufacturing industries to access corporate income tax incentives.
In Vietnam’s dynamic industrial environment, it is important to have a competent and dedicated team of professionals guiding your business through every stage of development. Located in Ho Chi Minh City, the commercial hub of the country, Corporate Counsels has decades of combined experience providing innovative and sustainable solutions whether forming a new business entity, or expanding, integrating, divesting or optimizing operations. Over the years, we have provided critical legal guidance to a number of large multinational corporations as well as investment groups, industrial parks, domestic entities and start-ups. Further, our manufacturing clients furnish a variety of products and sub-components for industrial, commercial businesses, consumers, distributors, and others in the supply chain. Corporate Counsels has a wide array of involvement in a number of sub-sectors, including, but not limited to, agribusiness, aviation, construction, electronics, energy, health care, textiles and footwear, and transportation and logistics. At the forefront of developments in the industrial sector of Vietnam, we keep ourselves and our clients updated on legal and market trends in order to meet the challenges of doing business in a rapidly changing world.
In addition, Corporate Counsels’ cross-disciplinary abilities deliver holistic and long-term solutions for our manufacturing clients. Unique in Vietnam, we bring together knowledge and experience from several practices including financing, outsourcing and licensing, trade practices, supply and distribution chains, insurance, M&A, technology, IP, taxation, labor & employment, and others. We understand not only the legal and regulatory challenges the modern manufacturing business faces today, but also the practical, real world aspects of doing business in a global economy. Moreover, this technical legal knowledge is coupled by Corporate Counsels’ continuing objective to understand the business from the viewpoint of our clients. As such, we bring deep market insight to the table and work with businesses to develop and achieve their strategic goals in a time of uncertain markets.
Corporate Counsels offers a wide array of indispensable advice and support to its manufacturing clients including:
- Banking, investment and financial solutions;
- Commercial contracts;
- Corporate formation and structure;
- Cybersecurity & data privacy;
- Digitalization and technology;
- Environmental strategy and compliance;
- Intellectual property;
- Labor and employment;
- Mergers & Acquisitions;
- Product development advice;
- Supply and distribution chains and customs;
- Real estate and construction;
- Regulatory compliance and permits;
- Workplace safety;