1. Geographical distribution and characteristics

Vietnam’s industrial parks are mainly distributed in three regions:

Northern Region:

Major provinces and cities: Hanoi, Haiphong, Bac Ninh, Haiyang, Hung Yen, Vinh Phuc, Quang Ninh

Features: Close to the Chinese border, suitable for the “China + 1” strategy

Main industries: electronics, machinery, metal processing, plastic products, chemicals

Central Region:

Major provinces and cities: Thua Thien Hue, Da Nang, Quang Nam, Quang Ngai, Pingtan

Features: Great development potential, but relatively backward infrastructure

Main industries: food processing, metal products, non-metallic mineral products, paper products, forestry products

Southern Region:

Major provinces and cities: Ho Chi Minh City, Binh Duong, Dong Nai, Long An, Ba Ria-Vung Tau, Binh Phuoc, Tay Ninh, Tien Giang

Features: The most developed economic region, with concentrated foreign investment

Main industries: electronics, textiles and clothing, footwear, food processing, chemicals, machinery manufacturing

2. Comparison of cost structures

2.1 Rental costs

North: US$54-122.5/m2/year

Central: USD 22.5-55.5/m2/year

South: US$60-200/m2/year

Analysis: The central region has the lowest rent and is suitable for cost-sensitive businesses; the southern region has the highest rent, but has better infrastructure and supporting services.

2.2 Labor costs

Management staff salary (monthly salary):

North: $1,000-1,500

Central: 800-1200 USD

South: $1,200-1,800

Technical staff salary (monthly salary):

North: $800-1200

Central: 600-1000 USD

South: $1,000-1,500

Ordinary worker salary (monthly salary):

North: 300-500 USD

Middle: 250-400 USD

South: $350-600

Analysis: The central region has the lowest labor costs, but may face a shortage of skilled workers; the southern region has the highest labor costs, but has a more adequate supply of talent.

2.3 Energy costs

Electricity cost (USD/kWh):

North: 0.07-0.10

Central: 0.06-0.09

South: 0.08-0.12

Water cost (USD/m3):

North: 0.5-1.0

Middle: 0.4-0.8

South: 0.6-1.2

Natural gas (US$/m3):

North: 0.35-0.45

Middle: 0.30-0.40

South: 0.40-0.50

Analysis: The energy cost in the central region is the lowest, which is conducive to reducing production costs. The energy cost in the southern region is the highest, but the supply is more stable.

2.4 Logistics Cost

Ocean freight cost (USD/20-foot standard container):

North (Haiphong Port): 500-700

Central (Da Nang Port): 600-800

South (Ho Chi Minh City Port): 400-600

Land transportation cost (US$/km/ton):

North: 0.10-0.15

Central: 0.12-0.18

South: 0.08-0.12

Analysis: The southern region has the lowest logistics costs and the most complete infrastructure. The northern region is close to China and is suitable for companies that are closely connected to China’s supply chain.

Due to different geographical locations, logistics costs vary from region to region:

• North: Close to China, suitable for companies closely connected with China’s supply chain
• Central: logistics costs are relatively high, but there is great potential for future development
• South: close to major ports, convenient logistics, relatively low costs

2.5 Tax costs

Corporate income tax preferential period:

Economic Zone/High-tech Zone: 10% tax rate for 15 years, 4 years of tax exemption, 9 years of 50% tax reduction

General industrial zone: 17%-20% tax rate, 2 years of tax exemption, 50% reduction in 5 years

VAT:

Export Processing Zones: 0%

Other regions: 10% (5% or 0% applies to some goods and services)

Import Duties:

Export Processing Zone: Exempt

Other regions: Tax rates vary widely depending on the type of goods and their origin.

Analysis: Economic zones and high-tech zones offer the most favorable tax incentives, but the entry threshold is also high. Export processing zones have obvious advantages in terms of value-added tax and import tariffs.

Economic Zone/Export Processing Zone: 10% corporate income tax rate for 15 years, 4 years of tax exemption, 9 years of 50% tax reduction

High-tech Zone: 10% corporate income tax rate for 15 years, 4 years of tax exemption, 9 years of halving

General industrial zone: Corporate income tax rate 17%-20%, 2 years tax exemption, 50% reduction for 5 years

Analysis: The tax policies of different regions do not differ much, and mainly depend on the type of park and the nature of the investment project.

2.6 Comparison of Park Management Fees

Northern region: 0.5-1.0 USD/m2/month

Central region: 0.3-0.7 USD/m2/month

Southern region: 0.7-1.5 USD/m2/month

3. Comparative analysis of parks

3.1 Northern Region (Taking Bac Ninh and Gui Wu Industrial Zone as an example)

Advantages:

Close to China, convenient supply chain integration

Relatively low labor costs

Strong government support

Disadvantages:

The infrastructure is relatively backward

Skilled workers may be in short supply

Suitable industries: electronics, machinery, auto parts

3.2 Central Region (Taking Heqing Industrial Zone, Da Nang as an example)

Advantages:

Lowest rental and labor costs

Great development potential

Disadvantages:

The infrastructure is relatively backward

Skilled labor is in short supply

High logistics costs

Suitable industries: food processing, light industry

3.3 Southern Region (Taking Saigon High-Tech Park in Ho Chi Minh City as an example)

Advantages:

Complete infrastructure

Adequate supply of talent

Convenient logistics

Disadvantages:

The highest cost

Fierce competition

Suitable industries: high-tech, electronics, precision manufacturing

4. Conclusion and Suggestions

• Cost-sensitive companies may consider the central region, but they need to weigh infrastructure and talent supply issues.
• Companies that need a complete supply chain and high-quality talents are suitable for choosing the southern region
• Companies closely connected to China’s supply chain can choose the northern region
• Enterprises should choose appropriate parks based on their own industrial characteristics, financial strength and development strategies.
• It is recommended to conduct on-site inspections and comprehensively evaluate various costs and supporting services, and not just look at a single cost factor.

Through the above analysis, companies can have a more comprehensive understanding of the differences in cost structures of industrial parks in various regions of Vietnam, and thus make more informed investment decisions.