Tips on choosing location to start your business in Vietnam

# Industrial properties in Industrial Zones are suitable for MANUFACTURERS

Manufacturers prefer to set up factories in the Industrial Zones, where they have the synchronous infrastructure and outstanding investment incentives.  

Option 1. Leasing a ready-built factory from Industrial Zone Infrastructure Development Company 

This option is suitable for new or small and medium sizes manufacturers. They can save time in finding land, building a factory, and carrying out legal procedures, which could take months or years. Currently, the ready-built factories in Vietnam are very developing with diverse sizes from 200 m2 up to 25.000 m2. However, rental fees of ready-built factories are often higher than land.

Option 2. Sublease a ready-built factory from another manufacturer

Some manufacturers may have unused factory spaces for lease. The lessor must qualify the following conditions:

- Having consent of the factory owner

- Having real estate business lines

- Factory for rent has full legal documents. There is no dispute over ownership rights, is not distrained for judgment execution or to abide by an administrative decision of a competent state agency. If the factory is being mortgaged, the accepting unit's written approval is required

- The content of the sublease contract should pay attention to the division of responsibilities between the lessor and the sub-lessee for wastewater treatment and wastewater load before connecting to the general collection system of the industrial zone; responsibility for collection and transfer of solid waste and hazardous waste; the responsibility to pay for infrastructure maintenance, renovation and other fees; requirements on ensuring quality conditions of factories, fire prevention and fighting, the environment….

The sub-lessee must use the factory for the purpose specified in the land use right certificate, the land lease decision issued by a competent authority or or sub-lease contract which the giver rent signed.

Option 3. Lease a land then build a factory

# Service companies lease in commercial spaces outside of the Industrial Zones

Service companies are often located in commercial spaces such as office buildings, coworking spaces, retail properties, and buildings house all kinds. Of note, residential apartments are not allowed to locate the company.

A location may be used as the headquarters of many companies, as long as each company has its own separate working spaces.

# Licensing and management authority based on the location of the company

- Provincial Industrial Zones Authority is the licensing and management authority of enterprises operating inside industrial zones.

- Provincial Department of Planning and Investment is the licensing and management authority of enterprises operating outside the industrial zones

# Foreign investors must have a location before registering a company in Vietnam

According to the law on investment of Vietnam, foreign investors must submit a copy of land use right certificate, and/or other documents identifying the right to use the location to implement investment project, such as MOU, leasing contract or sublease contract, enterprise registration certificate of the lessor

 # How Nova Law can support you? 

Our lawyers will support the foreign investors on:

- Consulting legal conditions for the location of a specific type of business

- Reviewing the draft leasing agreement

- Reviewing the validity of the headquarter's legal documents

- Consulting the legal procedures to register the company

- Consulting the investment conditions for business scopes of the project

- Guiding the preparation documents for company registration

- Registering a new company on behalf of the investor