Amid ongoing fluctuations in global foreign direct investment (FDI) flows, Vietnam continues to emerge as an attractive destination in the Asian region. In 2025, total registered FDI in Vietnam reached over USD 38.4 billion, while disbursed capital from foreign-invested projects was estimated at more than USD 27.6 billion, reflecting sustained attractiveness and strong confidence from the international investor community. [1]
Notably, China has reaffirmed its position as one of Vietnam’s key strategic investment partners, ranking second in total investment capital with nearly USD 5.7 billion, accounting for 14.8% of total registered FDI. At the same time, it ranked first in terms of the number of newly registered projects, representing 31.45%. This trend highlights the increasingly evident relocation of manufacturing activities and expansion of supply chains by Chinese enterprises into Vietnam. [2]
With competitive production costs, a strategic geographic location, and an increasingly legal framework for investment, Vietnam is becoming a “prime destination” for Chinese investors, particularly in the manufacturing sector. Among these, the furniture manufacturing industry stands out as a highly promising field, driven by growing export demand and the ability to leverage regional supply chains.
This article provides a comprehensive analysis of market opportunities, the applicable legal framework, and key considerations for Chinese investors seeking to enter Vietnam’s furniture manufacturing sector.
Furniture manufacturing is not included in the list of prohibited business lines under Article 6 of the 2025 Law on Investment, nor is it classified as a sector subject to market access restrictions for foreign investors pursuant to Appendix I of Decree No. 96/2026/ND-CP.
In addition, Vietnam does not impose any specific restrictions on Chinese investors engaging in this business activity. Accordingly, Chinese investors are fully entitled to invest in Vietnam and establish wholly foreign-owned enterprises (100% foreign ownership) in the furniture manufacturing sector.
Pursuant to Article 43 of the 2024 Land Law, foreign-invested economic organizations are entitled to lease land or sublease land within industrial parks, industrial clusters, and high-tech zones for business operations. Such entities may choose between two forms of land rental payment: a one-off lump sum payment or annual rental payments.
Accordingly, foreign investors may enter into agreements for land lease or factory sublease within industrial parks, industrial clusters, or high-tech zones to secure the right to use project sites. These documents serve as part of the application dossier for the issuance of the Investment Registration Certificate (IRC) for furniture manufacturing projects. Upon completion of the company establishment procedures, the newly established entity will execute formal lease agreements with the relevant industrial park or zone authorities and proceed with the necessary steps to implement and operate the furniture manufacturing project.
Chinese investors may choose from the following types of enterprises when establishing a company in Vietnam for furniture manufacturing activities:
Following the establishment of the company, Chinese investors may recruit employees to work for the furniture manufacturing project, including both Vietnamese and foreign employees, including Chinese nationals. However, when employing Chinese workers, the company must comply with the following procedures:
3.1.1. Pursuant to Decree No. 210/2025/ND-CP, at least five (05) days prior to the submission of the application for employing foreign workers, the employer must publicly announce recruitment for Vietnamese employees for the positions intended for foreign workers. The employer may conduct recruitment directly or through employment service organizations or labor leasing enterprises. However, there are no suitable Vietnamese candidates are found for such positions may the employer proceed with hiring foreign workers.
3.1.2. Work Permit Application Procedure (Article 22, Decree No. 219/2025/ND-CP)
a. Within 60 days, but no later than 10 days prior to the expected commencement date of employment, the employer shall submit an application for a work permit either directly, via public postal services, through authorized service providers, or by authorization to the Public Administrative Service Center in the locality where the foreign employee is expected to work.
b. The Public Administrative Service Center shall forward the application dossier in accordance with regulations on administrative procedures under the one-stop mechanism and the National Public Service Portal to the competent authority responsible for issuing work permits.
c. Processing timeline: Within 10 working days from the receipt of a complete application dossier, the competent authority shall consider and approve the demand for foreign labor and issue the work permit Form 04. In case of refusal, a written response stating the reasons must be issued within 03 working days from the date of receipt of a complete dossier.
d. For foreign employees working under labor contracts, including those employed by foreign diplomatic missions or foreign organizations in Vietnam, the employer and the employee must enter into a written labor contract in accordance with Vietnamese labor laws prior to the expected commencement date. Upon request, the employer must submit a copy of the executed labor contract to the authority that issued the work permit.
e. In cases where a foreign employee holding a valid work permit is assigned to work in multiple provinces or centrally governed cities, the employer must notify the competent authority in each locality at least three (03) days prior to the expected working date. The notification must include: full name, age, nationality, passport number, work permit number, employer’s name, and the start and end dates of the assignment (not exceeding the validity of the issued work permit).
3.1.3. Labor Contract After Work Permit Issuance
After obtaining the work permit, the company and the foreign employee may enter into a labor contract with a term not exceeding the validity of the work permit and in any case not exceeding two (02) years (as stipulated in Article 21 of Decree No. 219/2025/ND-CP).
In practice, the process of recruiting foreign employees in Vietnam is often time-consuming and subject to various complex legal requirements. Therefore, Chinese investors should carefully consider the allocation of key positions, particularly when appointing personnel from their home country or transferring employees to Vietnam, in order to optimize operational efficiency and ensure project timelines.
Pursuant to Article 28 of the Law on Environmental Protection 2020 (as amended and supplemented by Law No. 146/2025/QH15), investment projects are classified based on various criteria, including project scale, capacity, type of production, land use area (including water surface and marine areas), scale of natural resource exploitation, and environmental sensitivity factors such as densely populated residential areas and water sources used for domestic supply. Based on such classification, the applicable environmental conditions and permits required prior to project operation shall be determined.
Environmental protection regulations in Vietnam are increasingly stringent and subject to close supervision by competent state authorities. Therefore, Chinese investors are advised to proactively engage reputable environmental consulting firms to obtain support in project assessment, completion of legal documentation, and application for the necessary environmental permits in line with the scale and nature of the project. This approach not only ensures legal compliance but also helps mitigate potential risks during long-term operations.
Chinese investors may encounter challenges arising from differences in language and legal systems. These factors can increase the likelihood of disputes during the due diligence and contract execution stages for land or factory leases. Common risks include: land zoning not being compatible with furniture manufacturing activities, lessors lacking sufficient legal capacity or valid rights to lease, and complications in investment licensing or company establishment procedures. Such issues may directly impact the project timeline and overall feasibility.
A lack of market knowledge and unfamiliarity with Vietnamese legal regulations may lead investors to select unsuitable partners or suppliers. This can result in contractual disputes, financial losses, and disruptions to production activities. Typical issues include: constructions on leased land that are incomplete or lack updated construction permits, non-compliance with fire prevention and fighting requirements, or substandard raw materials that negatively affect production progress and the company’s reputation.
To minimize legal risks and enhance investment efficiency in furniture manufacturing projects, Chinese investors are advised to proactively engage experienced legal advisors in Vietnam. Professional support in legal due diligence, project assessment, and licensing procedures will help ensure regulatory compliance and prevent unnecessary disputes. In addition, collaborating with reputable financial advisors is essential for capital planning, cost control, and ensuring the long-term sustainability of the project.
Read more: Improper capital contribution in FDI enterprises in Vietnam: Legal risks and solutions
5.1. To enhance investment efficiency, Chinese investors should carefully select an appropriate investment structure in compliance with Vietnamese laws from the outset, thereby facilitating smooth project implementation.
5.2. Strict compliance with regulations on labor, taxation, and environmental protection is essential for ensuring stable operations and minimizing legal risks.
5.3. Engaging reputable legal advisory firms will enable investors to effectively manage risks, optimize costs, and improve overall operational efficiency throughout the project lifecycle.
In conclusion, a thorough understanding of the legal framework, coupled with careful financial planning, plays a critical role in enabling Chinese investors to successfully implement furniture manufacturing projects in Vietnam. With the support of professional advisory firms, businesses can establish a solid operational foundation, ensure regulatory compliance, and achieve sustainable growth in the market.
Should you have any questions or require further assistance, please feel free to contact Lexsol for comprehensive advisory services to ensure a smooth and compliant investment process in Vietnam.
Lexsol is a team of young, dynamic lawyers with over 10 years of experience in advising and resolving legal matters for both domestic and international businesses.
152-154 Vo Van Kiet Street, Ben Thanh Ward, Ho Chi Minh City, Vietnam
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