Industry

Accounting for manufacturing in Vietnam: inventory, costing, and import duty

Specialist accounting and tax for manufacturing FDI in Vietnam: inventory valuation, cost accounting, import duty optimisation, and CIT incentives for encouraged sectors.

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Overview

Manufacturing FDI in Vietnam involves a specific set of accounting and tax issues: inventory valuation, standard vs actual costing, import duty on raw materials and equipment, CIT incentives for encouraged sectors, and environmental compliance. Our manufacturing team has worked with global manufacturers across electronics, garments, food processing, and other sectors.

Who needs this service

  • Foreign manufacturers setting up production in Vietnam
  • Existing manufacturers expanding capacity or product lines
  • Manufacturers seeking CIT incentives or environmental compliance

Legal requirements

Inventory valuation

Inventory is valued at cost (FIFO or weighted average). Periodic and perpetual systems are both acceptable.

Cost accounting

Direct and indirect costs are allocated to products. A standard-cost system with periodic variance analysis is common.

Import duty

Raw materials, components, and equipment are subject to import duty. Free-trade agreements may reduce or eliminate duty for eligible goods.

CIT incentives

Encouraged sectors (high-tech, supporting industries, certain software) qualify for 10% CIT and tax holidays.

Pricing

Indicative fees

ItemFee
Manufacturing monthly compliancefrom USD 2,500 / month
CIT incentive studyfrom USD 5,000

Fees are indicative and depend on transaction volume, complexity, and reporting requirements. Request a tailored proposal.

Timeline

Typical engagement timeline

Phase 1 · Month 1–3

Setup

Chart of accounts, cost centres, inventory system, customs registration.

Phase 2 · Month 4–9

Production ramp

Trial production, cost refinement, import duty optimisation.

Phase 3 · From month 10

Steady state

Monthly close, CIT provisional, annual CIT finalisation, audit support.

Watch out

Common mistakes we help you avoid

  • 01Under-allocating overhead to inventory (inflating cost of goods sold)
  • 02Not claiming CIT incentives at IRC application
  • 03Missing import duty exemptions available under FTAs
  • 04Failing to reconcile inventory to the physical count
Why us

What you get

Industry expertise

We work with global manufacturers and understand the cost accounting, customs, and CIT incentive landscape.

Incentive identification

We help you claim the incentives you are entitled to, with the registration and the supporting documentation.

Customs optimisation

Free-trade agreement preferences, bonded warehousing, and export-processing zones can materially reduce duty.

FAQ

Frequently asked questions

What licences are needed for a manufacturing company?
Manufacturing FDI typically requires: IRC, ERC, environmental permit, construction permit, fire-safety permit, and product-specific sub-licences. The timeline is 6–12 months for a greenfield project.
How is the manufacturing corporate tax rate determined?
Standard 20% applies. Incentives depend on the sector and location: 10% for high-tech projects, 15% for projects in encouraged zones, and 17% for certain supporting industries. Tax holidays of 2–6 years may apply to new projects.
What are the import-duty considerations for manufacturers?
Manufacturers can defer import duty on raw materials and components used in production. Export products may be zero-rated for export duty. Free-trade zones and export-processing zones offer additional benefits. We help structure the customs declarations.
How is transfer pricing handled for a manufacturing subsidiary?
Manufacturers typically operate as contract manufacturers or limited-risk manufacturers with arm's-length mark-ups (often 5–7% on cost). The TP documentation, benchmarking study, and inter-company agreement are essential to support the pricing.
Get Started

Ready to discuss manufacturing?

Free 30-minute consultation. We'll review your situation and outline a fixed-fee engagement.

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