Choosing the right industrial zone is crucial when setting up factories and investing in Vietnam. Vietnam’s Northern, Central, and Southern industrial zones each have unique characteristics. The following is a detailed comparison of these three major industrial zones to help Chinese investors make more informed decisions when considering investment in Vietnam.

Labor Force

Ranking: Southern > Northern > Central

Southern Industrial Zones (Ho Chi Minh City, Binh Duong, Dong Nai)

• Labor Quantity: The South has the largest industrial labor force in Vietnam. Ho Chi Minh City and Binh Duong Province together account for about 25% of the national labor force.
• Labor Quality: Workers in Ho Chi Minh City have high technical skills, especially in manufacturing and high-tech industries. The proportion of skilled workers in the Southern region exceeds the national average, reaching over 20%.
• Labor Cost: Slightly higher than the Central region, with an average monthly wage of about $300-350 (source: Vietnam General Statistics Office). However, the higher skill level makes it suitable for enterprises with high technical requirements.

Northern Industrial Zones (Hanoi, Bac Ninh, Thai Nguyen)

• Labor Quantity: The Northern industrial zones have abundant labor resources, with Hanoi and its surrounding areas accounting for 20% of the national labor force.
• Labor Quality: The North, particularly Hanoi, has a large number of highly educated workers, with the proportion of skilled workers approaching 18%.
• Labor Cost: Slightly lower than the South, with an average monthly wage of $280-320 (source: Vietnam General Statistics Office), suitable for enterprises requiring highly skilled workers.

Central Industrial Zones (Da Nang, Quang Nam, Hue)

• Labor Quantity: The Central region has a relatively small labor force, accounting for 15% of the national labor force.
• Labor Quality: The labor force in the Central region has relatively lower technical skills, but the government is promoting vocational training to improve skills.
• Labor Cost: Lowest among the three regions, with an average monthly wage of $250-300 (source: Vietnam General Statistics Office), making it suitable for labor-intensive enterprises.

Summary: The Southern industrial zones have advantages in labor quantity and skill level, making them suitable for technology-intensive industries. The North is suitable for enterprises requiring high-quality labor, while the Central region attracts labor-intensive industries with its low-cost advantage.

Infrastructure

Ranking: Southern > Northern > Central

Southern Industrial Zones (Ho Chi Minh City, Binh Duong, Dong Nai, Ba Ria-Vung Tau)

• Transportation Facilities: The South has the most developed transportation network in Vietnam. Tan Son Nhat International Airport is the busiest airport in the country, and Cai Mep-Thi Vai Port in Ba Ria-Vung Tau is the largest deep-water port, with an annual cargo throughput exceeding 20 million TEUs.
• Industrial Zone Facilities: The Southern industrial zones have the highest degree of modernization, with reliable power supply, extensive communication networks (including 5G), and infrastructure investment accounting for more than 40% of the national total (source: Ministry of Planning and Investment, Vietnam).
• Logistics Efficiency: Due to the concentration of transportation hubs, the South has lower logistics costs and shorter transportation times, making it suitable for large-scale production and export enterprises.

Northern Industrial Zones (Hanoi, Bac Ninh, Thai Nguyen)

• Transportation Facilities: Hai Phong Port is the main port in Northern Vietnam, with an annual cargo throughput exceeding 8 million TEUs. Noi Bai International Airport provides vital air transportation support for the region.
• Industrial Zone Facilities: The Northern industrial zones have well-established facilities, with good power supply and communication conditions, but slightly lag behind the South in terms of modernization.
• Logistics Efficiency: Proximity to the Chinese border makes the North suitable for cross-border trade, but domestic logistics convenience is slightly inferior to the South.

Central Industrial Zones (Da Nang, Quang Nam, Hue)

• Transportation Facilities: Da Nang Port and Da Nang International Airport are the main logistics hubs in the Central region, with an annual cargo throughput of about 5 million TEUs.
• Industrial Zone Facilities: The industrial zones in the Central region are still developing, with infrastructure slightly lagging behind the North and South, but the government is investing heavily in improvements.
• Logistics Efficiency: The Central region serves as a transit hub connecting the North and South, suitable for regional logistics but less efficient for international logistics.

Summary: The Southern industrial zones are unmatched in infrastructure, especially for companies requiring frequent international trade and efficient logistics. The Northern region is advantageous for cross-border trade, while the Central region is suitable for regional logistics and companies primarily serving the domestic market.

Policy Support and Investment Incentives

Ranking: Southern > Central > Northern

Southern Industrial Zones (Ho Chi Minh City, Binh Duong, Dong Nai)

• Tax Policies: The South offers new registered companies a 4-year tax exemption, followed by a 9-year 50% tax reduction, with additional support for export-oriented and high-tech industries.
• Land Incentives: Offers long-term land lease contracts with preferential rents, especially in Binh Duong and Dong Nai, with strong government support for large-scale projects.
• Funding Support: The Southern government provides special funds for large projects, especially in manufacturing and export enterprises.

Central Industrial Zones (Da Nang, Quang Nam, Hue)

• Tax Policies: Similar to the South, the Central region offers tax incentives but with greater support for light industries and environmentally friendly industries. Da Nang provides a 5-year tax exemption.
• Land Incentives: The Central region offers lower land lease fees, suitable for the long-term development of small and medium-sized enterprises.
• Environmental Support: The government provides subsidies for environmental facility construction, especially suitable for enterprises in the environmental and sustainable development sectors.

Northern Industrial Zones (Hanoi, Bac Ninh, Thai Nguyen)

• Tax Policies: The North mainly offers tax incentives for high-tech and R&D enterprises. New enterprises enjoy a 4-year tax exemption followed by a 9-year 50% tax reduction.
• Land Incentives: Land rents in the North are relatively high, but high-tech parks like Bac Ninh offer special rent reductions for technology companies.
• R&D Support: The government provides R&D funding subsidies for high-tech and innovative companies, making it an ideal location for technology enterprises.

Summary: The South provides the most comprehensive support in terms of policy support and funding incentives, especially suitable for large and export-oriented enterprises. The Central region stands out in supporting environmental and light industries, while the North is ideal for high-tech and R&D-intensive enterprises.

Investment Recommendations:

• Technology-intensive and R&D Enterprises: Choose Northern industrial zones, especially Hanoi and Bac Ninh, to benefit from the best quality labor and R&D support.
• Labor-intensive and Environmental Enterprises: Choose Central industrial zones, especially Da Nang and Quang Nam, to reduce operating costs through low-cost labor and environmental policy support.
• Large-scale Manufacturing and Export-oriented Enterprises: Choose Southern industrial zones, especially Ho Chi Minh City and Binh Duong, to leverage the most developed infrastructure, comprehensive policy support, and extensive international trade networks for global expansion.

Vietnam’s different industrial zones have their advantages: Southern industrial zones have the most developed infrastructure, suitable for large-scale manufacturing and export-oriented enterprises; Northern industrial zones have high-quality labor and superior cross-border trade conditions, ideal for high-tech and R&D-intensive companies; Central industrial zones attract labor-intensive and light industrial enterprises with low-cost labor and environmental policy support. Choosing the right region based on specific needs will help enterprises succeed in the Vietnamese market and achieve long-term development.