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Export Manufacturing in Vietnam: Logistics, Incentives, and Setup Considerations
For companies seeking to diversify their manufacturing base, Vietnam remains one of the most attractive destinations in Asia. Supported by competitive operating costs, an extensive network of free trade agreements (FTAs), and strategic access to major global markets, the country provides a favorable environment for export-manufacturing enterprises to integrate into the global value chain.
Key Takeaways
- Foreign investors can establish export-oriented operations in Vietnam through either an Export Processing Enterprise (EPE) or a conventional manufacturing company, with each structure offering different advantages in incentives, compliance obligations, and operational flexibility.
- Logistics connectivity remains a critical site-selection factor, with Northern Vietnam providing strong access to China and Northeast Asia, while Southern Vietnam offers direct links to major markets in the US and Europe through deep-water port infrastructure.
- Non-EPE manufacturers generally benefit from greater flexibility in site selection and simpler setup procedures, whereas EPEs can access broader customs and VAT incentives but face stricter facility and customs supervision requirements.
- As global markets increasingly prioritize sustainability and supply chain transparency, export manufacturers in Vietnam will need to complement cost advantages with investments in technology, compliance, and green production capabilities.
Vietnam has become one of the most attractive manufacturing destinations in Asia for companies seeking to establish export-oriented operations. This is reflected in the country’s export performance in 2025, with export turnover reaching US$475 billion, up 17 percent from the previous year. Manufacturing and processing activities accounted for 88.7 percent of the total export value, reinforcing demand for export-oriented manufacturing investment across the country.
For investors considering setting up an export manufacturing enterprise (EME) in Vietnam, the investment decision extends beyond cost competitiveness alone. Factors related to operational structure, logistics connectivity, and facility suitability can significantly influence the overall efficiency and long-term business performance.
Understanding these considerations is therefore essential when planning an export manufacturing investment in Vietnam.
Logistics connectivity
Over the past decade, Vietnam has become increasingly integrated into global supply chains, serving major export markets, including the US, China, the EU, Japan, South Korea, and other ASEAN regions.
For EMC in Vietnam, logistics connectivity is a critical site selection factor as it affects transportation costs, delivery schedules, and overall operational efficiency.
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Key Corridors to Vietnam’s Major Export Markets |
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|---|---|---|
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North |
South |
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Key international seaport |
Lach Huyen Port (Hai Phong) is the largest deep-water port system in Northern Vietnam, connecting to major international shipping routes throughout Asia, America, and Europe. |
Cai Mep – Thi Vai Port (Vung Tau) is one of the deep-water ports in the world that can accommodate large container vessels, serves as the country’s primary gateway for exports to America and Europe. |
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Key international airport |
Noi Bai International Airport (Ha Noi) is a major air cargo gateway, handling 729,000 tons of cargo in the first 9 months of 2025. |
Tan Son Nhat International Airport (Ho Chi Minh city) is the most busiest airport in Vietnam, serves as the southern hub for international air freight. |
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Cross-border road corridor |
3 corridors connecting China: Lao Cai, Lang Son, Quang Ninh, with expressway network links manufacturing hubs to border gates |
2 corridors connecting Cambodia: Tay Ninh (Moc Bai), An Giang (Tinh Bien) with expanding expressway network |
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Provinces for EME |
Quang Ninh, Hung Yen, Bac Giang, Hai Duong, and Hanoi |
Dong Nai, Long An, Tay Ninh, and Ho Chi Minh City, |
Operational structure
To set up an EME in Vietnam, businesses can either establish an Export Processing Enterprise (EPE) or a conventional manufacturing company.
While both structures support export manufacturing activities, EPEs enjoy greater customs and VAT incentives, yet require compliance with specific infrastructure and facility layout requirements. In practice, establishing an EPE within an Export Processing Zone (EPZ) is often more straightforward.
Vietnam currently has five EPZs in Southern Vietnam, most of which are fully occupied. These zones typically attract high-tech and automation-intensive industries, leading to more selective tenant admission criteria that may limit options for labor-intensive operations and low-value industries. In addition, investors are required to obtain EPE certification after incorporation and remain subject to ongoing customs supervision throughout operations.
By contrast, non-EPE manufacturers benefit from greater flexibility in site selection and simpler incorporation procedure, although the customs and VAT incentive packages are generally less extensive. For small-scale businesses, non-EPE model is often considered more practical, as it involves fewer compliance requirements, offers a wider site selection, and allows investors to accelerate project implementation and operational commencement.
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Criteria |
EPE |
Non-EPE |
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Before commencement |
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Site selection |
Established within an EPZ; or outside an EPZ, subject to meeting EPE infrastructure requirements. |
Greater flexibility in site selection across industrial parks. |
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Factory setup requirements |
Facilities must be seperated by fences; have dedicated entrances and exits, are equipped surveillance cameras, and other conditions applicable to non-tariff zones. |
No special requirements |
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Setup procedures |
Companies must obtain an additional certificate for EPE status within 12 months from the issuance of the IRC; Failure to achieve this certificate may convert to a non-EPE structure. |
Simpler setup process |
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Setup timeline |
Longer timeline, with multiple site inspections conducted by customs authorities for EPE registration. |
Generally shorter |
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During operations |
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Customs duties |
Customs duties are exempt |
Customs duties on raw materials are generally refundable if certain conditions are met; Normal export duties apply where relevant. |
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VAT |
Exempt from VAT on eligible import-export transactions |
Standard VAT rules apply. Company with export activities may be eligible for refunds of creditable input VAT (cap of 10% of export revenue) if the amount reaches VND 300 million (US$12,222). |
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Compliance & monitoring |
Subject to ongoing customs supervision, and periodic inspections. |
Greater operational flexibility |
Outlook for EMEs in Vietnam
Vietnam’s EME model is expected to maintain strong growth momentum over the 2026–2030 period, supported by continued foreign direct investment, supply chain diversification, and the country’s extensive network of FTAs.
While traditional export sectors such as textiles, garments, and footwear are expected to remain important contributors, future growth is likely to be driven by high-tech sectors, digital economy industries, and green production activities. To support this transition, the Vietnamese government continues to prioritize investment attraction in high-tech and green industries through various incentive programs and policies.
At the same time, EME in Vietnam should prepare for increasingly stringent requirements from international markets. As Vietnam continues to expand its extensive global network, major trading partners are placing greater emphasis on sustainability, supply chain transparency, and social responsibility.
EU introduced stricter carbon compliance requirements in 2026 through the enforcement of Carbon Border Adjustment Mechanism, turning emission reporting into a financial obligation for importers of steel, aluminum, cement, fertilizers, electricity, and hydrogen.
Meanwhile, US’s recent USTR findings signals a policy direction toward greater emphasis on importer responsibility for proving compliance with forced-labor rules. Consequently, EME in Vietnam can no longer rely solely on Vietnam’s cost advantages and will need to increasingly invest in technology, sustainable operations, and workforce development to remain competitive and meet evolving global standards.
Conclusion
Vietnam remains an attractive destination for export manufacturing model, supported by strong trade performance, extensive market access, and favorable regulatory development. While both EPE and non-EPE structures offer viable pathways for export manufacturing setup in Vietnam, investors should carefully evaluate their options based not only on available incentives but also on operational flexibility, logistics connectivity, facility suitability, and long-term business objectives.
A well-informed assessment of these factors will be critical to establishing a successful and sustainable manufacturing operation in Vietnam.
For international investors, Vietnam's different localities offer favorable conditions across almost every sector, particularly as the country shifts toward higher value-chain manufacturing, high-tech industries, and innovation. Taking a closer look at Vietnam's provinces and investment destinations before committing capital can provide a decisive competitive advantage. A tailored market study, dedicated location selection, or business matchmaking can uncover factors that are often hard to assess—such as special incentives, skilled labor availability, and tax breaks.
About Us
Vietnam Briefing is one of five regional publications under the Asia Briefing brand. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Hanoi, Ho Chi Minh City, and Da Nang in Vietnam. Dezan Shira & Associates also maintains offices or has alliance partners assisting foreign investors in China, Hong Kong SAR, Indonesia, Singapore, Malaysia, Mongolia, Dubai (UAE), Japan, South Korea, Nepal, The Philippines, Sri Lanka, Thailand, Italy, Germany, Bangladesh, Australia, United States, and United Kingdom and Ireland.
For a complimentary subscription to Vietnam Briefing’s content products, please click here. For support with establishing a business in Vietnam or for assistance in analyzing and entering markets, please contact the firm at vietnam@dezshira.com or visit us at www.dezshira.com
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