diff --git a/docs/changelog/1702.bugfix.rst b/docs/changelog/1702.bugfix.rst
new file mode 100644
index 000000000..dd1dab2ae
--- /dev/null
+++ b/docs/changelog/1702.bugfix.rst
@@ -0,0 +1 @@
+Upgrade embedded setuptools to ``46.0.0`` from ``45.3.0`` on Python ``3.5+``.
diff --git a/src/virtualenv/seed/embed/wheels/__init__.py b/src/virtualenv/seed/embed/wheels/__init__.py
index ce762e823..8ab98ca15 100644
--- a/src/virtualenv/seed/embed/wheels/__init__.py
+++ b/src/virtualenv/seed/embed/wheels/__init__.py
@@ -3,27 +3,27 @@
 BUNDLE_SUPPORT = {
     "3.9": {
         "pip": "pip-20.0.2-py2.py3-none-any.whl",
-        "setuptools": "setuptools-45.3.0-py3-none-any.whl",
+        "setuptools": "setuptools-46.0.0-py3-none-any.whl",
         "wheel": "wheel-0.34.2-py2.py3-none-any.whl",
     },
     "3.8": {
         "pip": "pip-20.0.2-py2.py3-none-any.whl",
-        "setuptools": "setuptools-45.3.0-py3-none-any.whl",
+        "setuptools": "setuptools-46.0.0-py3-none-any.whl",
         "wheel": "wheel-0.34.2-py2.py3-none-any.whl",
     },
     "3.7": {
         "pip": "pip-20.0.2-py2.py3-none-any.whl",
-        "setuptools": "setuptools-45.3.0-py3-none-any.whl",
+        "setuptools": "setuptools-46.0.0-py3-none-any.whl",
         "wheel": "wheel-0.34.2-py2.py3-none-any.whl",
     },
     "3.6": {
         "pip": "pip-20.0.2-py2.py3-none-any.whl",
-        "setuptools": "setuptools-45.3.0-py3-none-any.whl",
+        "setuptools": "setuptools-46.0.0-py3-none-any.whl",
         "wheel": "wheel-0.34.2-py2.py3-none-any.whl",
     },
     "3.5": {
         "pip": "pip-20.0.2-py2.py3-none-any.whl",
-        "setuptools": "setuptools-45.3.0-py3-none-any.whl",
+        "setuptools": "setuptools-46.0.0-py3-none-any.whl",
         "wheel": "wheel-0.34.2-py2.py3-none-any.whl",
     },
     "3.4": {
diff --git a/src/virtualenv/seed/embed/wheels/setuptools-45.3.0-py3-none-any.whl b/src/virtualenv/seed/embed/wheels/setuptools-46.0.0-py3-none-any.whl
similarity index 88%
rename from src/virtualenv/seed/embed/wheels/setuptools-45.3.0-py3-none-any.whl
rename to src/virtualenv/seed/embed/wheels/setuptools-46.0.0-py3-none-any.whl
index 00dc7ec46..e1a185fd5 100644
Binary files a/src/virtualenv/seed/embed/wheels/setuptools-45.3.0-py3-none-any.whl and b/src/virtualenv/seed/embed/wheels/setuptools-46.0.0-py3-none-any.whl differ
diff --git a/tests/unit/create/test_creator.py b/tests/unit/create/test_creator.py
index a4316ee2e..bf2de4722 100644
--- a/tests/unit/create/test_creator.py
+++ b/tests/unit/create/test_creator.py
@@ -359,7 +359,6 @@ def test_create_long_path(current_fastest, tmp_path):
 
 
 @pytest.mark.parametrize("creator", set(PythonInfo.current_system().creators().key_to_class) - {"builtin"})
-@pytest.mark.timeout(timeout=30)
 def test_create_distutils_cfg(creator, tmp_path, monkeypatch):
     result = cli_run([ensure_text(str(tmp_path / "venv")), "--activators", "", "--creator", creator])
 
diff --git a/tests/unit/seed/test_extra_install.py b/tests/unit/seed/test_extra_install.py
index c5bb46295..dd3bc238b 100644
--- a/tests/unit/seed/test_extra_install.py
+++ b/tests/unit/seed/test_extra_install.py
@@ -35,7 +35,6 @@ def builtin_shows_marker_missing():
     reason="Building C-Extensions requires header files with host python",
 )
 @pytest.mark.parametrize("creator", list(i for i in CREATOR_CLASSES.keys() if i != "builtin"))
-@pytest.mark.timeout(timeout=30)
 def test_can_build_c_extensions(creator, tmp_path, coverage_env):
     session = cli_run(["--creator", creator, "--seed", "app-data", str(tmp_path), "-vvv"])
     coverage_env()
diff --git a/tox.ini b/tox.ini
index a7a483e3b..6bbe45c55 100644
--- a/tox.ini
+++ b/tox.ini
@@ -36,7 +36,7 @@ commands =
     python -m coverage run\
     -m pytest \
     --junitxml {toxworkdir}/junit.{envname}.xml \
-    --timeout 20 \
+    --timeout 30 \
     tests {posargs:--int}
 
     python -m coverage combine