china plus one vietnam 2026: First in New Project Count, Key Destinations and Rules of Origin Compliance

Setting up factories in Vietnam is becoming an increasingly important part of China plus one Vietnam strategies. By the end of August 2026, 2,771 newly approved FDI projects had registered capital of USD 21.72 billion, up 96.8% year on year, while the number of projects rose 9.4%. Manufacturing and processing attracted USD 12.215 billion, or 55.9% of newly registered capital.

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If you are a manufacturing company planning to establish or expand a factory in Vietnam, you will need to assess investment costs, approval procedures and market access risks. This means understanding which industrial parks attract the most Chinese companies in Vietnam, the practical steps for meeting compliance requirements, and how to ensure your products satisfy Vietnam's rules of origin and those of export markets, particularly amid US tariff checks. This article addresses these issues using real-world examples from Chinese companies and the applicable regulations.

Why are Chinese companies in Vietnam concentrating their factories in the north?

In H1 2026, northern factory projects attracted approximately USD 6.3 billion in new manufacturing FDI capital. Industrial land in the Northern Key Economic Zone (NKEZ) averaged approximately USD 142/m² for the remaining lease term (C&W Q2 2026). This reflects the north's appeal to export-oriented manufacturers.

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How much does industrial land and factory space cost in Vietnam?

In Q2 2026, industrial land in the north averaged approximately USD 142/m² for the remaining lease term (C&W Q2 2026). In Q3, ready-built factories rented for approximately USD 5-5.3/m²/month in the north, while warehouses rented for USD 4.5-4.9/m²/month. In Q3 2026, ready-built factories recorded approximately 500,000 m² of new take-up. Industrial park occupancy stood at 81.7% in Q3 2026, up 0.4% quarter on quarter and 3.5% year on year (vietnam.vn).

What permits and compliance approvals do Chinese companies need to establish a factory in Vietnam?

Companies need to obtain a foreign direct investment (FDI) licence, an environmental permit, a construction permit and an import-export business licence. The provincial Department of Planning and Investment (DPI) issues the FDI licence. The local Department of Natural Resources and Environment (DONRE) reviews environmental impact assessments, depending on the industry. The industrial park (IP) management board separately approves the park occupancy agreement and infrastructure connections. These procedures are governed by the 2020 Law on Investment and relevant sector regulations. Coordinating directly with the IP management board and DPI is the most efficient way to confirm the required documents, as implementation standards vary slightly by province.

Exporters must also declare compliance with rules of origin to Vietnam Customs. If a Chinese company only assembles or temporarily stores products in Vietnam, without meeting the requirements for Vietnamese origin, US Customs will not recognize Vietnam as the country of origin, and goods exported to the US will be subject to the original tariffs.

How do rules of origin for Vietnam manufacturing affect compliance under the China plus one strategy?

To qualify as a Vietnamese product, goods must meet the applicable rules of origin or undergo substantial transformation. Assembly or relabelling alone does not meet the standard. If a Chinese company establishes a factory in Vietnam but continues to source materials and components from China without carrying out sufficient value-added processing, its products will still be considered of Chinese origin and may face retroactive US tariffs.

Declarations must be supported by complete production cost records, proof of material origin and labour input records. Companies should confirm the actual origin requirements with downstream buyers, particularly US importers, rather than assume that setting up a factory in Vietnam automatically qualifies them for a Vietnamese certificate of origin (C/O). Small-scale assembly plants may find it difficult to meet the requirements and face higher risks.

What legal protections and foreign exchange restrictions apply to Chinese investment in Vietnam?

The 2020 Law on Investment protects foreign investment. Companies can defend their interests through Vietnamese courts or international arbitration, including UNCITRAL and ICSID. However, outward foreign currency transfers are regulated by the State Bank of Vietnam (SBV). Repatriating profits requires proof of tax compliance and foreign exchange settlement records. As factory investments often have long payback periods, companies should maintain sufficient working capital in Vietnamese dong to meet operating needs. Industry-specific tax incentives, such as corporate income tax reductions and import-export tax benefits, depend on the sector and location; companies should consult the local DPI or tax authority.

Frequently asked questions

Are there limits on foreign investors in Vietnam's industrial parks?

There is no general cap on foreign investors' land-use rights in industrial parks, although certain strategic sectors, including telecommunications, energy and media, are restricted. Specific park policies are set by the park management board. Companies should contact the park directly about available plots and lease terms.

What tax incentives are available to Chinese companies establishing factories in Vietnam?

High-tech industries and export manufacturers may qualify for corporate income tax reductions, depending on their location and sector. Import-export duties depend on the product's HS code and applicable trade agreements. Contact the local tax department (CT) or investment promotion agency (IPA) for a specific list of incentives, as policies are frequently revised.

How can Chinese companies with factories in Vietnam ensure their certificates of origin are valid?

Before applying for a certificate of origin, assess the extent of localisation across the supply chain, value-added share and labour input. Discuss the expected country of origin (Vietnam or Chinese goods transshipped through Vietnam) with US importers to avoid customs clearance disputes. For exports to the US, seek advice in advance from a US trade lawyer or export compliance adviser to confirm whether the production process meets US rules of origin, such as USMCA or general tariff preference provisions.

What restrictions apply to foreign exchange and profit repatriation for Chinese companies with factories in Vietnam?

Repatriating profits requires approval from the State Bank of Vietnam and is generally assessed based on after-tax income and foreign exchange reserves. Companies should open a US dollar account in Vietnam to prepare for the transfer.

Next steps: questions to get answered in writing before paying a deposit

• The target park's current foreign investor occupancy rate and remaining leasable area
• The park's specific environmental and safety approval requirements for your industry and expected processing times
• Typical factory establishment costs and payback periods for Chinese investors at the park, based on previous examples
• The specific rules of origin requirements for your products, including local sourcing rates, value-added share and labour share
• Confirmation from the Ministry of Finance and tax department of corporate income tax and import-export tax incentives for your sector and investment size

Our sales team serving Chinese and Taiwanese clients can connect you with industrial park management boards, investment promotion agencies and rules of origin specialists. Contact our industrial property sales team (Anna Pham Zhenzhen) via Zalo or WhatsApp. We can provide the latest available-plot information for your target parks, government approval timelines and case studies of Chinese investors.