Are you a foreign investor looking to lease land for your manufacturing business in Vietnam? Vietnam has over 300 Industrial Parks for investors looking to establish their manufacturing businesses.
In this blog, we explore the different types of Industrial Parks in Vietnam for your manufacturing business.
What is an Industrial Park?
Industrial Parks are areas or zones in cities designed for industrial activities, including manufacturing, distribution, and warehousing.
Types of Industrial Parks in Vietnam and their benefits
Here are the different types of Industrial Parks in Vietnam:
Pre-built facilities are a great solution for small to medium-scale enterprises that require less than 8 hectares of land and need to set up operations quickly. Due to the increasing number of investors moving their factories to Vietnam, the demand for such facilities is on the rise. Dong Nai and Binh Duong provinces, which have excellent access to transport infrastructure, are popular locations for pre-built facilities.
The average rent of pre-built facilities is around 4 – 5 USD/m2/month.
Benefits of pre-built facilities
These facilities are according to international standards and come with the following benefits:
- Faster setup time
- Lower construction costs
- Equipped infrastructure
- Customizable to meet business needs
In Ho Chi Minh City, pre-built factories located in industrial zones are eligible for a 10% corporate income tax rate for 15 years.
Industrial Zones are a popular option for manufacturing businesses that require a larger area and need to be near major markets. If you are looking for a long-term lease of over 20 years to set up a manufacturing unit in Vietnam, then Industrial Zones are an ideal choice as the government offers up to 20 years of tax incentives These zones are near major cities and transportation hubs.
The average rent of the Industrial Zone is around 10 – 22 USD/m2/month.
Benefits of Industrial Zones
Some of the advantages of industrial zones include:
- Access to essential infrastructure and services
- Skilled labor force
- Competitive operating costs
- Government support and tax incentives
Companies located in Industrial Zones can take advantage of several benefits, including
- Income tax exemption for the first four years.
- Support for newly established, unprofitable businesses by exempting income tax for up to 7 years.
- 100% land use tax exemption.
- 50% reduction of income tax for nine consecutive years from the time businesses have the income and are taxable.
Export Processing Zones
Export Processing Zones (EPZs) provide businesses with various incentives to encourage export-oriented production. It includes tax holidays, duty-free import of raw materials, and streamlined customs procedures.
The average land rent in the Export Processing Zone is around 8 – 14 USD/m2/month.
Learn more about how to set up a trading company in Vietnam
Benefits of Export Processing Zones
- Tax incentives for companies operating in EPZs
- Access to well-developed infrastructure
- A large pool of skilled labor for the industries present in the zone
- Focus on exporting goods to international markets
- Built near the seaport/airport
In Ho Chi Minh City, companies in export processing zones are exempt from import and export duties. They also enjoy a Corporate Income Tax (CIT) rate of 10% for the first 15 years and 20% for the following years. Some businesses may have a lower tax rate if the government encourages their products or if they are in economically disadvantaged areas.
High-tech Zones are special areas for research and development and tech-based companies, such as software, biotechnology, and electronics.
The average rent of the Industrial Zone is around 6 – 7 USD/m2/month.
Benefits of High-Tech Zones
These zones offer services, such as advanced laboratories, research centers, and technology parks. The government also offers funding, research and development grants, and assistance with market access to ventures in High-Tech Zones.
In Hoa Lac High-tech Park, companies can enjoy CIT exemption for the first four years, 5% for the next 9 years, and 10% for the next 2 years. They are also exempt from import duties for goods used for research and development.
Choosing the Right Industrial Park for your business in Vietnam
Entrepreneurs leasing land in Industrial Parks in Vietnam should consider the following factors when selecting a suitable park for their business in Vietnam:
Location of Industrial Park
Consider the Industrial Park’s location, and reach to major ports, highways, and airports. You should also make sure that it is accessible to your target market.
Check the availability of essential infrastructure. This includes water, electricity, telecommunications, and transportation and the reliability of these facilities and their cost-effectiveness.
The labor force in Industrial Park
Inspect the availability and quality of the local labor force near your chosen park, their skillset, and whether they meet your business needs.
The tax structure of Industrial Park
Get an understanding of the tax framework, including its incentives, and their effects on your manufacturing business.
Emerhub’s market entry services are a reliable option for choosing the right investment in Vietnam
How to lease land in an Industrial Park in Vietnam?
Following is the process to lease land an Industrial Park in Vietnam:
Emerhub assists you in leasing land for your manufacturing business in Vietnam by preparing the required documents and getting relevant permits.
Legal Requirements to lease land in an Industrial Park in Vietnam
To legally lease land in an Industrial Park in Vietnam you need the following documents:
- Industrial land lease application form
- Copy of investment certificate
- Project outline
- Written assessment of land lease demand
- Map of the rental land
Steps for leasing land with Emerhub
The first step is to find an Industrial Park that suits your needs. Emerhub finds the right Industrial Park considering the location, cost, and other factors.
Once you sign the contract, Emerhub applies for an Investment Certificate (8-12 weeks) and Business Certificate (7-10 working days) on your behalf.
After completing the registration procedures, you sign a contract to lease the land in the Industrial Park.
Emerhub applies for permits such as fire protection, environmental impact assessment, and warehouse or factory construction permit.
Proceed to build the factory or warehouse according to the intended use.
Using Emerhub’s services to find the best location in Industrial Parks in Vietnam
Emerhub assists in investing and leasing land in an Industrial Park in Vietnam. We conduct market research to find the best location for your venture. Emerhub also assists in the land lease application process and negotiating the lease terms on your behalf. With our expertise, we find the best deal for you.