A 2027 Guide to Manufacturing in Vietnam
Vietnam has spent two decades building a reputation as one of Asia's most dependable manufacturing bases, and 2026 has strengthened that position. Registered foreign direct investment has reached its highest level since 2009, industrial output is growing at its fastest pace in years, and the legal framework for foreign investors has been rewritten. At the same time, the conditions facing foreign manufacturers keep changing: U.S. trade policy shifted several times in a single year, and the Vietnamese government has made clear that it now wants quality and technology from foreign investors, not only volume.
This guide is written for decision makers planning manufacturing projects in Vietnam for 2027. It uses the latest official 2026 data as a baseline and explains how foreign companies typically enter, what the main cost lines look like, how licensing works under the new Law on Investment, which tax rules apply, and which changes have already been adopted for 2027. All figures and legal references below come from Vietnamese legal texts, government portals and state media, or from official EU sources for EU rules.
Where Vietnamese manufacturing stands going into 2027
According to official statistics reported by the Ministry of Finance's newspaper, total registered foreign investment in the first ten months of 2026 reached USD 54.85 billion, up 74 percent year on year and the highest level since 2009. Disbursed foreign investment, a better indicator of factories actually being built and equipped, reached USD 24.08 billion, up 13.1 percent. Processing and manufacturing accounted for USD 19.96 billion, or 82.9 percent, of disbursed capital, and for USD 24.19 billion, or 51.6 percent, of newly registered and additional capital combined (Thoi bao Tai chinh Viet Nam).
Industrial production is moving in the same direction. The index of industrial production rose 12.4 percent over the first ten months of 2026, with processing and manufacturing up 13 percent (Ministry of Industry and Trade), the highest increase for the period since 2019 (Thoi bao Tai chinh Viet Nam).
The policy direction behind these numbers matters as much as the numbers themselves. Resolution No. 10-NQ/TW of the Politburo, dated 8 June 2026, targets roughly USD 200 to 300 billion in registered foreign investment over 2026 to 2030, with about 75 percent expected to come from developed economies, and aims for the foreign-invested sector to contribute around 30 percent of GDP by 2045 (VietnamPlus). The resolution marks a shift from attracting investment "at any cost" to selective attraction linked to national capacity, with incentives tied to commitments (Nhan Dan).
In practice, a manufacturer that brings technology, higher-value production or a commitment to local sourcing is likely to find a more receptive environment in 2027, while projects that rely only on low-cost assembly may find incentives harder to secure.
Choosing an entry model
Before looking at licenses or land, a foreign company should decide which manufacturing model fits its objectives. In our experience, most companies choose among three broad options.
The first is contract manufacturing, in which the foreign company places orders with an existing Vietnamese or foreign-invested factory and does not set up its own production entity. This is the fastest and least capital-intensive route, and it suits companies that want to test the market, diversify suppliers or move part of their volume out of another country. The critical work lies in finding capable suppliers and verifying their production capacity, quality systems, export history and legal standing. MSC supports this stage through partner and supplier search and company profiling.
The second is leasing a ready-built factory inside an industrial park. A foreign-invested company can begin operating within months rather than years, because the building, utilities and most of the site infrastructure are already in place. Demand is strong: the Ministry of Construction reported that rents for industrial land and ready-built factories generally edged up in the third quarter of 2026, supported by rising demand and high occupancy in key industrial parks (Tien Phong, citing the Ministry of Construction). Companies planning to start production in 2027 should therefore begin site selection early.
The third is leasing industrial land and building a dedicated facility. This route gives the greatest control over layout, process design and future expansion, and it is the usual choice for heavy, specialized or large-scale production. It also takes the longest, because construction, environmental and fire safety approvals must be completed before production begins.
Many companies combine these models over time, for example starting with contract manufacturing, moving to a ready-built factory once volumes are proven, and later building their own plant. The right starting point depends on product complexity, available capital, time to market and how much control the company needs over quality and intellectual property. Structured market research at this stage helps companies avoid committing to a model before they understand the supply base and cost structure.
What it costs to manufacture in Vietnam
Cost remains one of Vietnam's advantages, but budgets for 2027 should be built on current figures and adopted increases, not on assumptions carried over from earlier years.
Industrial land and factories. Land and factory rents vary widely by province, park and lease term, and the official trend in 2026 has been a slight increase (Tien Phong, citing the Ministry of Construction). Industrial land in Vietnam is generally leased for the remaining term of the industrial park, so quotations should be compared on the same basis. We recommend obtaining written quotations from several parks rather than relying on published averages.
Labor. Minimum wages for 2027 are now final. Decree No. 399/2026/ND-CP, signed on 2 November 2026 and effective from 1 January 2027, raises the monthly regional minimum wage to VND 5.70 million in Region I, VND 5.08 million in Region II, VND 4.45 million in Region III and VND 4.04 million in Region IV (Nhan Dan). This is an increase of VND 310,000 to 390,000 per month depending on the region, and the decree replaces Decree No. 293/2025/ND-CP (VietnamPlus). Minimum wages are only a floor: actual pay for skilled operators, technicians and engineers is higher, and employers must also contribute to social, health and unemployment insurance. Our payroll and personal income tax team can model these costs in advance.
Electricity. From 1 November 2026, the average retail electricity price was reduced by 2 percent to VND 2,159.9037 per kWh, excluding VAT (Bao Quoc te, citing VNA). From the same date, the peak, normal and off-peak time windows for production and business customers were adjusted under Decision No. 2892/QD-BCT of the Ministry of Industry and Trade (VietnamPlus). Energy-intensive manufacturers should review their shift planning for 2027 against the new windows.
The licensing roadmap under the new Law on Investment
The legal framework changed significantly in 2026. The Law on Investment No. 143/2025/QH15 was passed by the National Assembly on 11 December 2025 and took effect on 1 March 2026 (Dai bieu Nhan dan). The Government then issued Decree No. 96/2026/ND-CP guiding the law (Bao Dau thau).
Two sequences. Under the previous framework, a foreign investor normally had to obtain an Investment Registration Certificate (IRC) for its project before it could establish a company and receive an Enterprise Registration Certificate (ERC). Article 72 of Decree No. 96/2026/ND-CP now also allows a foreign investor to establish the company first and then carry out the IRC procedure. In that case, the company must complete the investment procedures for its project, and it is not recognized as the investor implementing the project until it holds the IRC. When establishing the company, the investor must still meet the market access conditions for foreign investors under Article 19(2) of the Law on Investment (Ministry of Finance, official Q&A of 30 October 2026).
For a manufacturer, the company-first route is useful when a legal presence is needed quickly, for example to sign a factory lease, open bank accounts or hire staff while the project dossier is being finalized. It is less suitable when the project's market access, land or technology position is still uncertain. Deadlines and conditions for each route are set out in Decree No. 96/2026/ND-CP and should be checked for the specific project before filing.
Further amendments in 2027. Law No. 24/2026/QH16 amending the Law on Investment was passed by the National Assembly on 24 August 2026 and takes effect on 1 March 2027. It removes 62 conditional business lines and amends 14 others (Thoi bao Tai chinh Viet Nam). Companies whose activities sit close to a conditional line should check the new list before filing in 2027.
After the certificates. For manufacturers, the IRC and ERC are the beginning of the regulatory process rather than the end. Depending on the scale and nature of production, a new plant typically needs environmental procedures, fire prevention design approval and acceptance before operation, construction procedures where a new building is involved, registration of foreign employees, and customs arrangements, including export processing status where relevant. Products such as medical devices, cosmetics, chemicals and food require their own registrations. All of these steps should be mapped into a single timeline from the start, so that a factory that is physically ready is not left legally unable to operate. Our regulatory and compliance team prepares this roadmap for clients before the first application is filed.
Corporate income tax and incentives
The Law on Corporate Income Tax No. 67/2025/QH15 took effect on 1 October 2025, and the standard rate is 20 percent. For qualifying income under the law's incentive provisions, companies can receive a tax exemption of up to four years followed by a 50 percent reduction for up to nine years in specified locations, or up to five years elsewhere (Can Tho City legal information portal). Eligibility depends on the activity and location defined in the new law and should be checked project by project rather than assumed from earlier projects.
Large multinational groups should also account for the global minimum tax. Under Resolution No. 107/2023/QH15, the rules apply to constituent entities of multinational groups with consolidated revenue of at least EUR 750 million in at least two of the four preceding years (text of Resolution No. 107/2023/QH15), and the minimum rate is 15 percent (Bao Phap luat Viet Nam). For groups within scope, a tax holiday may be worth less than its headline rate suggests, so the investment case should be modeled after any top-up tax. Our tax compliance and transfer pricing teams can support this analysis.
Trade policy and rules of origin
For manufacturers exporting to the United States, tariff policy has changed repeatedly. On 20 February 2026, the U.S. Supreme Court struck down the reciprocal tariffs imposed under emergency powers (Thoi bao Tai chinh Viet Nam), and U.S. Customs stopped collecting them from 24 February (Dai bieu Nhan dan). A temporary 10 percent global tariff followed (Bao Van hoa). Since 24 July 2026, under Section 301 of the U.S. Trade Act of 1974, goods from Vietnam have been subject to an additional tariff of 12.5 percent, with exemptions for products on the U.S. Trade Representative's exemption list (Bao Van hoa).
Two lessons follow for 2027 planning. First, U.S. tariff exposure should be modeled product by product, using the correct tariff classification and checking whether an exemption applies, and the model should be updated as policy changes. Second, origin compliance has become a core operational issue. Documenting genuine manufacturing in Vietnam, including bills of materials, supplier records and value added, protects both the company and its customers.
For companies selling to the European Union, the United Kingdom and other partners with which Vietnam has free trade agreements, preferential tariffs remain available, but only for goods that meet the rules of origin in each agreement. Origin planning should therefore be part of supplier selection rather than an afterthought at the point of export.
What to watch in 2027
The following changes have already been formally adopted. None of them is a proposal.
Higher minimum wages from 1 January 2027. Decree No. 399/2026/ND-CP raises regional minimum wages by VND 310,000 to 390,000 per month (VietnamPlus).
An amended Law on Investment from 1 March 2027. Law No. 24/2026/QH16 changes the list of conditional business lines (Thoi bao Tai chinh Viet Nam).
The first EU carbon border payments. Since 1 January 2026, the EU's Carbon Border Adjustment Mechanism (CBAM) has been in its payment phase, and iron, steel and cement are the Vietnamese sectors most affected. Importers pay for about 2.5 percent of covered emissions in 2026, rising to 5 percent in 2027 (Ministry of Industry and Trade). By 30 September 2027, EU importers must submit their first annual CBAM declaration covering 2026 imports and surrender the corresponding certificates (European Commission). Exporters and their EU customers will need verified emissions data.
Vietnam's domestic carbon market. The domestic carbon exchange is in a pilot phase until the end of 2028, with official operation planned from 2029 (Ministry of Agriculture and Environment newspaper). Allowances are allocated in two-year periods, with 2027 to 2028 following the current 2025 to 2026 period, and covered facilities may offset up to 30 percent of their allowances with carbon credits (Ministry of Agriculture and Environment). The pilot covers thermal power, iron and steel, and cement.
Continued U.S. tariff uncertainty. The Section 301 tariff remains in force, and the Vietnamese government has said it will continue working with the United States to adjust the rate applied to Vietnamese goods (Bao Van hoa). Any change would depend on future negotiations, so pricing and sourcing decisions for the U.S. market should be stress-tested against several tariff scenarios.
Common mistakes to avoid
Across the projects we support, the same issues recur.
Choosing a location on land price alone. Lower land costs can be offset by longer logistics routes, thinner supplier networks or labor shortages. Location decisions should weigh access to ports and airports, the local supply base and the availability of skilled workers.
Treating licensing as a single step. The IRC and ERC are only part of the process. Environmental, fire safety, construction and product-specific approvals determine when production can actually begin.
Choosing the company-first route without a clear project. The flexibility of the new decree is valuable, but the company cannot implement the project until it holds the IRC, so this route works best when the project is already well defined.
Underestimating origin and tariff risk. A product that relies heavily on imported components may not deliver the expected tariff advantage.
Assuming that old incentives still apply. The 2025 corporate income tax law changed the incentive rules, and the global minimum tax may reduce the value of incentives for large groups.
Budgeting 2027 on 2026 costs. The new minimum wages, electricity tariff changes and carbon reporting obligations should all be reflected in 2027 budgets.
How MSC Vietnam Consulting can help
Manufacturing in Vietnam in 2027 offers real opportunities, supported by strong investment flows, a more flexible licensing system and a government that actively seeks high-quality foreign investment. Turning that opportunity into a productive operation requires careful decisions on the entry model, location, licensing sequence, tax position and trade compliance.
MSC Vietnam Consulting supports international manufacturers at each stage, from market and supplier research and partner due diligence, through entity setup and investment licensing, to accounting, tax and ongoing compliance once the plant is running. If you are evaluating Vietnam as a production base for 2027, contact our team to discuss your project.
*Disclaimer: This article provides general information based on Vietnamese legal texts, government sources and state media, and on official EU sources for EU rules, as of 13 November 2026. It does not constitute legal or tax advice. Regulations and tariff measures may change and should be confirmed for each specific project.
