Vietnam 2024 – Booming of the Electric Vehicle Market

At the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28) in 2023, Prime Minister of Vietnam Pham Minh Chinh reaffirmed Vietnam’s commitment to achieving Net Zero by 2050[1]. This is a positive sign driving growth in the Electric Vehicle (EV) market.

In January 2024, Vietnam hosted its first Electrified Vehicles Show in Hanoi, featuring famous automobile brands, marking the debut of EVs in Vietnam[2]. Moreover, Hanoi will host the Vietnam Auto Expo 2024 in June, bringing together over 100 foreign businesses from China, South Korea, Japan, India, and Taiwan. This event will bolster the EV sector and also Vietnam’s Automobile Market.[3]

The presence of Foreign Direct Investment (FDI) companies in the Electronic Vehicles sector

The burgeoning EV sector in Vietnam has become a focal point for FDI, attracting significant interest from international companies.

In fact, global manufacturers such as Toyota (Japan), Hyundai (Korea), BYD (China), Nissan (Japan) and SAIC-GM-Wuling have already introduced EV car models to the Vietnamese market, making prominent mark in the automotive industry (particularly with EV products) and collaborating with Vietnamese partners in manufacturing, assembling, and launching their EV models.

Notably, Toyota Vietnam sold 593 hybrid cars in May 2024, with an increase equal to 285% compared to the previous month.[4]

Talking about recent FDIs in the sector, Omoda & Jaecoo, a subsidiary of Chery Automobile (China), signed a joint venture agreement with Geleximco Group (Vietnam) to establish a hybrid cars factory in the northern Thai Binh province with a total investment capital of over 800 million USD.[5]

As for the luxury EV car segment, Porsche AG was the first luxury automobile brand to enter the Vietnamese market with the Taycan in 2020, followed by BMW and Mercedes.

Main forms of investment for foreign companies starting EV projects in Vietnam

The most popular options among foreign companies interested in investing in the automobile sector in Vietnam are:

  • Establish a Limited Liability Company (LLC):

Investors may invest in Vietnam’s automobile sector through a Joint Venture Agreement to establish an LLC, an independent entity that offers full control, limited liability within the scope of the contributed capital, direct investment incentives, and ease of operations;

  • Register a Representative Office (RO):

An ideal presence for investors before committing to further investments that aid market research and relationship building.

When choosing to establish an LLC in Vietnam, Companies will need to choose specific “business lines”[6] to include all the activities that the Company will perform, such as:

  • 2910 – Manufacture of automobile vehicles and other motor vehicles;
  • 2930 – Manufacture of parts and accessories for automobile vehicles and other motor vehicles;
  • 4511 – Wholesale of automobile vehicles and other motor vehicles;
  • 4512 – Retail sale of small automobiles (with 9 or fewer seats);
  • 4520 – Maintenance and repair of automobile vehicles and other motor vehicles.

However, for the Automotive sector, investors shall also apply for different sublicenses, which include:

TypeVietnamese nameMain requirements
Certificate of eligibility for automobile vehicle manufacturing and assembly[7]Giấy chứng nhận đủ điều kiện sản xuất, lắp ráp ô tô– Have legal rights to use the factory, assembly line, welding line, etc; – Own/Rent an automobile vehicle warranty and maintenance center.
License for automobile vehicle import[8]Giấy phép kinh doanh nhập khẩu ô tô– Own/Rent an automobile vehicle warranty and maintenance center; – Have written confirmation for the right to recall motor vehicles imported into Vietnam.
Certificate of eligibility for automobile vehicle warranty and maintenance center[9]Giấy chứng nhận cơ sở bảo hành, bảo dưỡng ô tô– Have a factory built on the land area under legal ownership of the owner of the center and with adequate facilities; – Have a personnel team and quality management system ensuring the service quality.
Business License[10] *to perform wholesale and retail distributionGiấy phép kinh doanh– Meet market access conditions; – Have a financial plan; – No overdue tax debts.
License for retail establishment[11]Giấy phép lập cơ sở bán lẻ– Have a financial plan; – No overdue tax debts.

Government incentives in the Automobile sector

As a business line eligible for investment incentives, the Vietnamese laws have provided reference regulations for investors involved in automobile manufacturing, such as:

  • Corporate Incomes Tax (CIT) incentives[12] depending on the investment’s location as follows:
IncentivesExtremely difficult conditionsDifficult conditions
CIT Incentives10% for 15 years20% for 10 years
CIT holidays4 years (a reduction of 50% for the next 9 years)2 years (a reduction of 50% for the next 4 years)
  • Import duty reduction, such as the exemption imposed on imported Automobile components eligible for the Tax Incentive Program[13].

In addition, the government has implemented timely tax incentives for consumers to promote and create favorable conditions for the development of the EV industry, including:

  • The Special Consumption Tax (Thuế tiêu thụ đặc biệt) for EVs with fewer than nine seats: 3%[14];
  • Registration fee (Lệ phí trước bạ)[15]: Exempted from March 1st, 2022 to March 1st, 2025[16].

In conclusion

Vietnam’s Electric Vehicle Market is set to experience significant growth in 2024, driven by increasing consumer demand, supportive government policies, and the entry of major global EV manufacturers. This growth highlights significant opportunities for investors and marks a pivotal shift towards sustainable transportation in the country.

In D’Andrea & Partners Legal Counsel we have authored innovative publications exploring Vietnam, produced in order to provide foreign investors and businesses with more practical guidance on how to do business in Vietnam, as it requires a specific context of the economic and legal framework of the country, including tailor-made consultancy for the construction sector.

The above content is provided for informational purposes only. The provision of this article does not create an attorney-client relationship between D’Andrea & Partners and the reader and does not constitute legal advice. Legal advice must be tailored to the specific circumstances of each case, and the contents of this article are not a substitute for legal counsel.


[1] https://www.vietnam.vn/en/toan-van-bai-phat-bieu-cua-thu-tuong-chinh-phu-tai-hoi-nghi-thuong-dinh-hanh-dong-khi-hau-the-gioi/;

https://tuoitrenews.vn/news/society/20231203/intl-experts-make-recommendations-at-cop28-to-help-vietnam-reach-netzero-emissions/77071.html;

[2] https://e.vnexpress.net/news/business/companies/vietnam-s-first-electrified-vehicle-exhibition-to-commence-in-hanoi-4695002.html;

[3] https://vietnam-autoexpo.com.vn/en/;

[4] https://www.toyota.com.vn/tin-tuc/san-pham/toyota-viet-nam-cong-bo-doanh-so-ban-hang-thang-5-2024-38780;

[5] https://theinvestor.vn/vietnam-china-joint-venture-to-build-800-mln-automobile-factory-d9391.html;

[6] Appendix I of Decision 27/2018/QD-TTg;

[7] Article 7 of Decree 116/2017/ND-CP;

[8] Article 14 and 15 of Decree 116/2017/ND-CP;

[9] Article 21 of Decree 116/2017/ND-CP;

[10] Article 9 of Decree 09/2018/ND-CP;

[11] Article 22 of Decree 09/2018/ND-CP;

[12] Decree 218/2013/ND-CP: Calculated continuously from the first year the enterprise has revenue from new investment projects;

[13] Classified as “group 98.49” under Decree 26/2023/ND-CP

[14] From March 1st, 2022 to February 28th, 2027;

[15] Law on Fees and Chargers 2015 and Decree 10/2022/ND-CP: Automobile is a property subject to registration fees, which is a fixed amount paid for public services for state management provided by regulatory agencies upon the registration of ownership and/or use of such property;

[16] Decree 10/2022/ND-CP (For the following two years, the fee will be 50% of the fee for gasoline and diesel vehicles with the same number of seats).

Carlo Fabrizi Carlo Fabrizi

Carlo Fabrizi

Legal Advisor
Carlo Fabrizi, a representative of D’Andrea & Partners Legal Counsel, handles Foreign Direct Investment projects in Vietnam and South China
Riccardo Verzella Riccardo Verzella

Riccardo Verzella

Senior Associate
Riccardo Verzella, a highly qualified Italian lawyer, has been based in Shanghai, China since January 2020.

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