Despite a difficult 2021, Viet Nam’s shift from low-skilled, labor-intensive sectors to high-value-added industry continues. Businesses struggle to find affordable labor and a list of Vietnam industrial zone that’s available for investing. However, foreign and high-value-added investors still remain quite optimistic about Vietnam’s long-term development.
What is the Vietnam Industrial Zone?
Vietnam’s Industrial Zones (IZs) are a popular location for international investors. But what exactly are they? Vietnam industrial zone is a government-designated area in Vietnam for the industrial production of products and services.
Investors often choose to locate in an IZ because the facilities, infrastructure, and logistics are generally regionally competitive. Foreign-invested enterprises may also take use of the IZ’s resources, as well as cost reductions and financial incentives.
Nonetheless, IZs vary greatly in terms of location, organization, incentives, and so on. Investors considering establishing a presence in an IZ should do extensive research to discover the optimal location for their objectives. When deciding whether or if an enterprise in an IZ makes sense for a certain investment, investors need to examine various variables.
It is becoming more vital to learn more about IZs.
With investors relocating manufacturing to Vietnam, the local real estate market has boomed, with prices continuously increasing. The nation contains 394 industrial parks (IPs) with a total natural land size of 121,900 hectares as of May 2021. There are 286 operating IPs (generating 3.78 million direct employment) with a 71.8 percent occupancy rate, down from 74% last year. H1/2021 saw the establishment of 25 new industrial parks, 19 more than in H1/2020.
Here, we identify and analyze three industrial zones in the country’s north, middle, and southern regions that international investors might begin investigating. Hopefully this might provide you and your team an excellent starting point for determining your future investment location.
Vietnam Industrial Zone Map
Occupancy rates grew in certain areas while remaining largely steady in others.
The predicted rush of relocations out of China in 2021 has been hindered by lockdowns and travel restrictions. Developers, on the other hand, feel that 2022 will be more successful in terms of leasing; renters and investors will also have a choice of fresh supply after the limitations are abolished.
Dozens of industrial zone projects were authorized in 13 cities and provinces in Q1/2021, offering thousands of hectares to meet future demand. Bac Ninh has the most projects, with five forthcoming IPs, including the 208.54-ha Que Vo III IZ, which has a total investment of US$120.9 million, and the 250-ha Gia Binh II IZ, which has a total investment of US$172.2 million. The 481.2-ha Quang Tri IZ, which has a US$90.2 million investment, and the 529-ha Trieu Phu IZ are two new projects in Quang Tri. Vinh Phuc also anticipates numerous additional developments totaling 500 acres. New developments are also underway in Hai Duong, Vinh Long, Quang Nam, Thua Thien-Hue, Nam Dinh, and Nghe An.
The South will get 6,475 hectares from three more IPs, which will supplement the current overburdened IPs. Long Thanh District would get the 253-hectare Long Duc 3 IP and the 2,627-hectare Bau Can-Tan Hiep IP, while Cam My District will receive 3,595 hectares from the Xuan Que – Song Nhan IP. These intellectual property rights contribute to the country’s 2030 goal, which focuses on the development of high-tech industrial zones.
Long An anticipates a new 119-hectare IP project, Century Industrial Park, planned by Hai Son Co., Ltd., in Duc Hoa District for US$59 million. Long An will have around 1,500 hectares of extra cleared land in its IPs to capitalize on Viet Nam’s rising FDI inflow in 2021. The province’s largest foreign investments are concentrated in textiles and apparel, footwear, animal feed, poultry, fish, food processing, beverages, and manufacturing.
List of Industrial Zone in Vietnam
The North Key Economic Zone (NKEZ)
The North Key Economic Zone (NKEZ) includes the provinces of Ha Noi and Bac Ninh, as well as Hung Yen, Vinh Phuc, Hai Duong, Hai Phong, and Quang Ninh. The NKEZ includes well-developed transportation networks, ideal industrial land that is backed by new infrastructure development, China’s proximity and investment, and a concentration on heavy industries, electronics, and large-scale projects.
Occupancy rates rose in certain areas but stayed steady in others. In 2021, the average occupancy rate in Bac Ninh was 99%, 91% in Ha Noi, 88% in Hung Yen, 86% in Hai Duong, and 70% in Hai Phong.
North Vietnam industrial park investors gain from access to utilities as well as regulatory help that ensures operations run at maximum capacity. For enterprises looking for rapid alternative sources of production, the ability to acquire ready-made factories and tap into Hai Phong’s highly skilled labor pools ensures that operations can be built and staffed on time. Exporters benefit from proximity to Cat Bi International Airport, the recently built Highway 5, and the Chinese border.
Unconditional tax holidays give direct cost savings possibilities that may be reflected into expenses immediately for enterprises interested in fully exploiting Vietnam’s cost competitiveness.
Potential Properties Available in NKEZ
– Bac Ninh:
+ Ready-built Factory/Warehouse for Rent
– Ha Noi:
– Hai Duong:
+ Good quality Factory for Rent
– Hai Phong:
+ High quality Factory for Rent
– Hung Yen:
The Central Key Economic Zone (CKEZ)
Thua Thien Hue, Da Nang, Quang Nam, Quang Ngai, and Binh Dinh are the five cities/provinces that make up the CKEZ. Food processing, textiles, building materials, and paper and forest products are the primary industries in this region. Although sectors such as oil and gas, shipbuilding, logistics, and other high-tech industries are expected to grow rapidly in the next few years.
Investors in the industrial zone benefit from infrastructure and facilities designed to satisfy the demands of Vietnam’s rapidly expanding sectors, such as textiles and electronic components. Water, power, and financial services are all included in this. Da Nang, the economic center of the Central region, provides a regular supply of skilled workers to CKEZ and offers high quality factory for rent in prime locations.
It is possible for foreign investors to get up to five years of tax exemptions on all fixed assets and other materials required to the maintenance of equipment used to produce items in the zone. Foreign investors no doubt have taken note of these benefits.
Potential Properties Available in CKEZ
– Quang Ngai:
– Da Nang:
+ High Quality Factory for Rent
– Binh Thuan:
The South Key Economic Zone (SKEZ)
This zone encompasses the provinces of Ba Ria-Vung Tau and Binh Duong as well as the cities of Ho Chi Minh City, Dong Nai, Long An, Tay Ninh, and Long An.
There are several benefits to investing in SKEZ, including its closeness to HCMC, Vietnam’s economic hub, Cat Lai Port is located inside the city borders of HCM, and there is a ready supply of qualified workers from reputable educational institutions.
Industrial, commercial, and residential facilities are seamlessly integrated into Vietnam industrial park to fulfill the demands of a wide range of investors. An onsite customs office, prefabricated factories, and a trained staff from the Vietnam-Singapore Vocational College are all available to investors in the park.
Occupancy rates rose in certain provinces, as they did in the North, but remained consistent across the board. Occupancy rates in 2021 will be as high as 99% in HCMC, 95% in Dong Nai, 90% in Binh Duong, 84% in Long An, and 80% in Ba Ria-Vung Tau, on average.
Additionally, these services are supported by their closeness to Ho Chi Minh City, Tan Son Nhat International Airport, and several places of sea-based transportation, such as Saigon Port.
Investors may save on transportation costs by being close to HCMC and the key south ports, and they can also take advantage of the highly qualified workforce in HCMC, with some of the property that are available on Industrial Savills’ property page.
Potential Properties Available in SKEZ
– Dong Nai:
+ Industrial Land for Sale in Long Thanh
+ Industrial Land for Sale in Nhon Trach
+ Factory for Sale in Xuan Loc
+ Factory for Sale in Bien Hoa
+ Factory for Lease in Tam Phuoc
+ Factory for Lease in Long Thanh
+ Factory for lease in Nhon Trach
+ Warehouse for Lease in Loc An Binh Son Industrial Park
– Binh Duong:
+ Factory for Sale-Leaseback in Bau Bang
– Ba Ria – Vung Tau:
– Long An:
+ Single ready-built Factory for Lease
– Ho Chi Minh City:
+ Warehouse for Lease near Cat Lai Port
+ Multi-storey Factory for Lease in Binh Tan
– Tay Ninh:
– Ninh Thuan:
Why Foreign Investors Should Consider Industrial Zone in Vietnam
The infrastructure of Vietnam Industrial Park
Industrial parks in Viet Nam are generally judged on their infrastructure. Prior to significant industrialization, the country’s infrastructure lagged behind, which made it difficult for industrial parks to succeed in the past.
Transport to and from airports, ports, and train terminals is made simple by the presence of industrial parks near major roads. Five provinces were ranked as having the finest infrastructure in the 2018 Provincial Competitiveness Index: Binh Duong; Da Nang; Vinh Phuc; Hai Duong; and Ba Ria-Vung Tau.
Qualified and Abundant Workforce
The cheap cost of labor is a major draw for overseas investors. Cities like Hanoi and Hai Phong, in particular, in the north, have a plentiful supply of workers.
In comparison to other locations, finding qualified employees in the Central region might be more difficult. The north and south of the country tend to have more prospects for workers in technical professions. It’s possible that foreign investors will have difficulty finding and maintaining qualified employees, especially at the highest levels of the organization.
There are many educational institutions in Ho Chi Minh City and the surrounding area that encourage and cultivate talent; yet, the competition for this talent is fierce.
Industrial employees and managers may expect to earn anything from $500 to $2,000 a year, depending on their sector and degree of expertise. Taking into account overtime, overtime pay, and social insurance is also important.
Incentives for Vietnam Industrial Zone
Exemptions or reductions in CIT, VAT, and import taxes are only some of the tax breaks available, which are given depending on the industry and location of the firm.
Education, healthcare, sports, culture, high technology, environmental protection, scientific research, infrastructure development, and software manufacture are all examples of regulated promoted sectors. Industrial parks, export processing zones, high-tech zones, and economic zones are examples of administrative divisions or sites with investment incentives.
In addition, investors will get import tax exemption and land leasing incentives. The kind of incentives and exemptions available will vary by business and geography.
The Expense for Industrial Zone in Vietnam
– In the North
Price increases have been more mild in comparison to the 2018-2020 timeframe, owing to travel limitations and generally steady occupancy levels. Prices in Ha Noi climbed to US$129/m2, Bac Ninh to US$106/m2, Hai Phong to US$101/m2, and Hai Duong to US$79/m2. Hung Yen prices increased by 22% year on year, reaching US$101/m2.
– In the South
Vietnam Industrial park in large cities had small price increases, similar to those seen in the North from 2018 to 2020. In 2021, IP lease costs in HCMC were $161/m2, in Long An they were $138/m2, in Binh Duong they were $108/m2 and in Dong Nai they were $104/m2 Ba Ria-Vung Tau had the largest increase in prices, up 45% to US$94/m2 YoY.
Setbacks When Looking for a Factory for Rent in Vietnam
Inconsistencies in pricing
Investors simply cannot afford the high costs of factory for rent in large cities in three key zones. The rental fee in other industrial zones in Vietnam on average typically varies from $2 to $4 per m2 per month. In a hi-tech major industrial zone in Vietnam, rents will vary from $5 to $6 per square meter per month or more. As a result, pricing issues are one of the challenges for enterprises.
It is difficult to locate tiny plots of land in Vietnam industrial zone
It is tough to discover tiny locations for rental in CNCs since it was designed to execute large and high-quality projects. CNC zones typically range in size from 1000m2 to many tens of thousands of square meters. As a result, if a company wants to hire a space as tiny as 100-500m2, the CNC area is out of the question. As a result, CNC developers have lost a huge number of clients in the small market.
Limiting professions in the industrial zone and the Vietnam industrial park
In reality, the high-tech park in Vietnam’s industrial zone is not open to all sectors. It is only suited for select sectors due to the stringent standards, restrictions, and operational characteristics. Information technology, biotechnology, new materials technology, and automation technology are examples of these. This reduces risks for these firms while also increasing growth potential for other qualified enterprises.
Factory for Rent with Savills’ in major Vietnam Industrial Park List
Many enterprises must pick alternatives to avoid postponing investment due to the problems that exist in industrial parks. And Savills Industrial services is an excellent alternative if you’re looking for properties in Vietnam industrial park list as key for economic growth.
