Given the current economic landscape, leasing ready-built factory space is widely favored for both local and foreign businesses. However, this decision requires careful preparation and a thorough understanding of the market. This article will discuss the basic things that businesses need to know when facing the process of selecting a space for production.

1. Factory rental process

The following is a simplified process to help domestic enterprises (DDI) and foreign direct investment enterprises (FDI) simplify the process of finding a factory for rent:

– Step 1: The enterprise actively searches for a factory rental service that suits its business needs. Usually, factories located in industrial zones will ensure safety for businesses. Some factors that businesses need to consider when choosing a factory, including:

• Location
• Area
• Infrastructure
• Accompanying utilities
• Rental price
• Payment method
• Contract terms and procedures

Factory rental services are increasingly popular and effective for businesses

– Step 2: Negotiate with the lessor.

– Step 3: The lessor submits to the Industrial Zone Management Board for investment reception.

– Step 4: The enterprise and the lessor sign the factory rental contract.

• Step 5: The enterprise carries out the registration procedure to be granted investment rights. Wherein:
• For FDI enterprises: register at the Economic Zone Management Board. Here, businesses need to register for a Business Registration Certificate, make a seal as well as a Tax Code. Then, apply for an Investment Registration Certificate to be allowed to rent a factory in the industrial zone.
• For DDI enterprises: register at the Department of Planning and Investment. Enterprises register for a Business Registration Certificate, make a seal, and a Tax Code here.

– Step 6: The enterprise and the service provider hand over the premises after completing the factory rental procedures.

2. Factors to consider when renting a factory

To find a reputable and quality factory, businesses cannot ignore factors such as:

Capacity of the factory rental service provider

When identifying a suitable factory zone, businesses should carefully research the capacity of the service provider to avoid risks as well as encountering poor quality units. In addition to the information updated on the media, looking up the tax code information and asking for information from partners who have cooperated with that unit is also essential that new businesses should not ignore.

In the current market, Gaw NP Industrial is an industrial warehouse developer trusted by many domestic and foreign businesses to choose to locate their factories. Thanks to its international expertise, local knowledge, and professional consulting services, Gaw NP Industrial has satisfied many demanding FDI enterprises from Japan, Korea, the US, etc. Up to now, Gaw NP Industrial owns industrial real estate projects with great reputations such as: GNP Yen Binh 1 and 2 (Thai Nguyen), GNP Nam Dinh Vu (Hai Phong) and GNP Dong Van 3 (Ha Nam).

Thoroughly research the factory rental service provider

Factory progress and handover time

As each manufacturing enterprise produces different items, the demand for factory items is also different. Therefore, businesses need to consider the construction time, progress, and start time of the lease to ensure that the production schedule of the enterprise is met. At the same time, closely following the construction progress also helps businesses assess the prestige and professionalism of the supplier to avoid encountering fraudulent units.

On the other hand, businesses can refer to previous similar projects of the service provider to consider making appropriate decisions.

Factory project design

As ready-built factories play an important role in production activities, businesses need to pay attention to the design of the project. It is best to use column-free designs, internal roads in the factory area must be spacious, with a full security and safety system for facilities and people such as: security team, fire protection system, garbage and waste treatment system…

Rental factory incentive policies

Consider the incentives for costs, incidental services, and support from the lessor to decide whether to rent for a short or long term. The two sides need to exchange thoroughly and answer questions as well as negotiate to get the best factory rental price.

3. Legal documents businesses need to prepare

3.1. From the business

For newly registered businesses

New businesses must carry out registration procedures as prescribed by law in Articles 21, 22, and 23 of Decree 01/2021/ND-CP. The enterprise prepares basic legal documents including:

• Application for enterprise registration
• Company charter
• List of shareholders (if a joint-stock company) or list of company members (if a limited liability company)
• Copies of legal documents of the legal representative or of shareholders (if a joint-stock company), members (if a limited liability company)
• Photocopy of investment registration certificate

After all documents are complete, the enterprise submits the application to the Business Registration Office and waits for the results.

For businesses registering additional business lines

Businesses must carry out registration procedures as prescribed by law in Article 56 of Decree 01/2021/ND-CP. The enterprise prepares additional legal documents including:

• Notification of change of enterprise registration content
• Written decision on adding or changing business lines
• Certified copy of meeting minutes on adding or changing business lines
• Original business registration certificate or investment registration certificate

The dossier is sent to the Business Registration Office, the time limit for settlement is 03 working days from the date of receipt of valid documents.

Prepare all necessary documents and procedures when renting a factory

3.2. From the lessor

– Registering and adding factory rental business lines: Lessors must register additional business lines for new businesses in accordance with the Law on Investment, the Law on Real Estate Business, and legal regulations on export processing zones – industrial parks.

– Complete valid papers and ensure legality: The factory for rent must have complete and legal documents. The factory is not in dispute over ownership, is not seized to enforce a judgment or comply with an administrative decision of a competent state agency. If the factory is mortgaged, there must be a written consent of the mortgagee.

– Ensure independence between businesses: The factory for each business to rent must ensure independence in the operation of the parties. At the same time, it does not affect the overall operation of the entire Industrial Park. The factory must ensure that the project items can meet the essential living needs of the workers.

To carry out the factory rental contract procedure, the enterprise and the lessor need to prepare the following documents:

• Introduction of the lessee and the lessor
• Detailed description of the factory, if possible, should be accompanied by drawings with information such as: area, characteristics, landmarks, utilities, accompanying conditions, and actual status of the factory.
• Factory costs include: rent per m2, total rent, rent including which items, related operating costs, technical infrastructure and utility costs, payment method.
• Repair and maintenance costs: responsibilities of both parties, utility infrastructure based on the nature of depreciation arising from the use process.
• Factory insurance: responsibilities and benefits.
• Rights to property: the lessee’s rights to property on the leased land.
• Right to enter the factory
• Terms and conditions, contract appendix
• Cases of contract termination and remedial solutions.

4. Tax incentives offered by factory rental units

Each rental unit has different tax incentive policies. Typically, Gaw NP Industrial will have different tax incentives at each rental unit:

– GNP Yen Binh 1 and GNP Yen Binh 2: 100% corporate income tax exemption for the first 2 years and 50% reduction for the next 4 years for priority industries such as: Electronics manufacturing, component manufacturing, semiconductor & LCD equipment manufacturing, mechanical processing, clean industry, and high-tech industry.

– GNP Nam Dinh Vu: 100% corporate income tax reduction for the first 4 years and 50% reduction for the next 9 years for priority industries such as: Mechanical manufacturing, construction materials manufacturing, high-tech manufacturing, paint manufacturing, chemicals, cosmetics, packaging, light industry, automobiles.

– GNP Dong Van 3: 100% corporate income tax exemption for the first 2 years and 50% reduction for the next 4 years for priority industries such as: Mechanics, assembly, automobiles, motorbikes, electricity, electronics, telecommunications, information technology, supporting industry, new materials, other supporting industries.

Tax incentives offered by factory rental units to attract heavy industries

5. Regulations businesses must comply with when renting a factory

After renting a factory, businesses need to comply with legal procedures such as:

• Registering the hazardous solid waste source book
• Registering labor regulations, creating conditions for the establishment of trade unions.
• Collective labor agreement, registering salary scale, payroll, and labor use report.

Above are the regulations on procedures that businesses need to grasp when deciding to choose the type of real estate for renting a factory.

In addition, if businesses need to learn more about the types of factories at Gaw NP Industrial, they can contact the Hotline: +84 789 75 77 88 for advice!

>>> See more: Explore the benefits of renting a factory with office space in Vietnam

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