5 essential facts when choosing manufacturing location of industrial zone for investment in Vietnam
Foreign investors renting land in Vietnam industrial zone face the most difficulty in choosing the location to rent industrial zone and for investment in Vietnam because of the geographical location and advantages of each region. Renting factories in big cities, urban areas will have access to quality and abundant human resources, more competitive than rural provinces, but have the problem of cost and limited space for investment in Vietnam. Each factory rental location has different sources of raw materials, transportation costs, market output, investors need to consider carefully when choosing an industrial zone location. Let's find out 5 factors that the investors need to consider when choosing a rental location in Vietnam industrial zone and investment in Vietnam
1. Main factors in choosing a location at Vietnam industrial zone
Vietnam is promoting the development of industrial zones throughout the country to attract investment in Vietnam. Supply and demand of the rental market in Vietnam industrial zone tend to increase. According to CBRE, the industrial zone supply increased by more than 25% in the north, 28% in the south.
In deciding which industrial park to locate operations in Vietnam, there are several factors that must be balanced; including cost, labor, and transportation. The geographical location of each region has specific differences, suitable for each production industry. For instance, The locations in key economic regions and urban areas have the advantage of high-quality infrastructure, but in return, the enterprises have to pay high costs for input materials. For industrial zones in rural areas, where it is densely populated, the labor cost is low. Each region also has its own advantages in terms of tax incentives, transport infrastructure, and human resources that businesses need to consider carefully before choosing the location and investment in Vietnam . Understanding the strengths of each region before choosing the location will help you reduce the risk of costly errors and improve the way you do business as well as investment in Vietnam.
2. 5 signs to identify a suitable industrial park location
The convenient transport system is significantly important for Vietnam industrial zone
Standard Infrastructure
Clause 22, Article 1 of the Law on Construction 2014 stipulates that the infrastructure of the industrial zones includes the overall factory, warehouse, internal traffic system, electricity and water system, drainage system, and wastewater treatment system, fire prevention and fighting systems and telecommunications systems. The factory design and function are the factors that need to be considered first for investment in Vietnam, and then the supporting system for the production process to coordinate smoothly and synchronously. When renting an industrial zone, the owner needs to ensure repair and maintenance of infrastructure works during the lease period.
A typical example is a project of investment in Vietnam, managed and operated by WHA. WHA provides international standard facilities not only in Thailand but also in Vietnam. WHA guarantees the facilities conditions according to the terms in accordance with the laws of Vietnam.
Industrial Supporting Ecosystem
International investors should pay attention to choosing to rent in Vietnam industrial zone for investment in Vietnam that belongs to an industrial supporting ecosystem, or so-called industrial cluster operating in the same field. For example, textile and garment warehouses are often concentrated in the northern and southern provinces, while the footwear and furniture manufacturing industries are concentrated in the southern key economic zone. Renting a factory for investment in Vietnam located in the ecosystem will take advantage of the technology and market suitable for the manufacturing industry. In contrast, a consumer goods processing enterprise cannot minimize labor costs when located in a high-tech industrial zone
Logistics and Transport System
Production always needs transportation and trade services. The transport system refers to national highways, railway stations, seaports, and border gates. In general, The industrial zone is located near national highways leading to airports, seaports, and train stations, making it more convenient for transportation.
About the initial phase of investment in Vietnam industrial zone, called WHA Industrial Zone 1- Nghe An, managed and operated by WHA. Considering the convenience of inter-provincial traffic system, near Cua Lo international port cluster, Vinh station, Vinh airport, WHA industrial park has a strategic infrastructure location, which is convenient for companies to expand their business.
Access Quality Human Resources
For effective investment in Vietnam, businesses should set up a factory in an area with many vocational schools, colleges, and universities. This is convenient for contacting and recruiting skilled labor. The factory located near major cities is convenient to attract a group of highly qualified personnel. Moreover, the industrial zone located far from the center, which is difficult to travel to, will make workers and employees hesitate when applying and working.
When choosing a location, the investors should seek professional consulting and factory leasing services. The solution provider will help the tenant determine the right location for the investment in Vietnam, business area, and growth strategy.
WHA is the leading reputable industrial estate developer from Thailand. WHA is currently managing Vietnam industrial zone under the name called WHA Industrial Zone 1 - Nghe An.
Nghe An has a convenient inter-provincial traffic system, near Cua Lo international port cluster, Vinh station, and Vinh airport. Labor costs in Nghe An (about 5.5 million/month) are lower than in key economic regions (over 9 million/month). In 2020, Nghe An exports to 124 countries and territories, the group of processed industrial products accounts for a high proportion of about 77.5%.
In addition, the industrial zone in Nghe An is entitled to a 10% tax incentive for 15 years. The above characteristics show that Nghe An is a future competitive region for investment in Vietnam and Southeast Asia.
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WHA Industrial Zone 1 - Nghe An is operated and managed by WHA
WHA Industrial Zone 1 - Nghe An is the well-developed industrial zone with a total area of 1,850 ha. in North Central Vietnam. WHA provides investor support from the first stage to the stage of production. and brings practical values to businesses when investing in Vietnam industrial zones.
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