News Jan 24 25

Factory for Lease in Vietnam 101: Why Foreign Investors Should Choose Vietnam As Their Base in Asia?

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Vietnam has become a competitive base for international production, offering an exciting business environment and strategic benefits for investors. To the tenants of factory for lease in Vietnam, the fast economic growth, competitive labour force, and trade policy of Vietnam are very attractive. Notably, the procurement of a factory can also be subject to particular challenges, such as navigating the regulations, choosing a suitable location, and managing culture.

In this blog, various advantages and disadvantages that investors will encounter while renting a factory for lease in Vietnam are discussed, along with practical solutions to allow investors to fully benefit from this dynamic manufacturing hub.

Factor 1: Growing Manufacturing Sector

Factory for Lease in Vietnam 101: Why Foreign Investors Should Choose Vietnam As Their Base in Asia?
Source: Vietnam Plus

In Vietnam today, manufacturing is pretty much at full throttle, and various industries are powering that incredible growth. Industry, in the form of electronics, textiles, furniture, and food processing, are just some of the booming sectors. For those tenants searching for a factory for lease in Vietnam, it translates to wise opportunities to leverage established supply chains and a vast local market. Because of Vietnam’s shift from agriculture to industry, Vietnam is now in the process of developing into an emergent industrial behemoth, and hence is the most appropriate, ideally suited, destination for most manufacturers to invest.

A combination of government support for industry development and global curiosity has generated a climate of business-like freedom. This encompasses policies that have permitted the leasing of factories in Vietnam, including investment policies to attract foreign direct investment (FDI). Tenants can also leverage the low cost of production in Vietnam to compete with the regional manufacturing giants. Opting for a factory for lease in Vietnam offers the tenant an entry point to share in this dynamic industrial growth.

Factor 2: Strategic Location

Vietnam’s location offers unparalleled advantages for manufacturing and trade. Located in Southeast Asia, it provides its residents easy access to the markets of China, Japan, South Korea, and the ASEAN countries. Given their strategic position, transit times are reduced, and logistical costs are saved for companies shipping goods worldwide.

Factory for Lease in Vietnam 101: Why Foreign Investors Should Choose Vietnam As Their Base in Asia?
Source: Source of Asia

Furthermore, because of Vietnam’s position on East Sea trade routes, tenants renting a factory for lease in Vietnam can quickly utilise a factory in Vietnam to export to overseas markets. Investors frequently select Vietnam to set up a supply chain hub that provides a link between Asia and Western markets, thereby gaining a competitive advantage in fulfilling global demand. With the possibility to export raw materials or finished goods, it offers a significant cost advantage.

Factor 3: Trade Agreements

The fact that Vietnam has, as a country, actively been developing its global trade relations to such a degree is a huge asset for factory tenants renting a factory for lease in Vietnam. Agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) market price reductions to manufacturers, which would ultimately be passed on to consumers in major markets through the reduction of import tariffs. This competitive edge in location gives Vietnam a comparative advantage for businesses interested in catering to international customers.

Factory for Lease in Vietnam 101: Why Foreign Investors Should Choose Vietnam As Their Base in Asia?
Source: Bộ Công Thương

To tenants, these agreements bring access to bigger markets and bigger revenue. However, the conditions under which each treaty will be as useful as possible also need to be well understood so that they can be effectively used. Some agreements establish rules of origin or technical specifications about goods, which could cause problems for unprepared companies. With assistance from trade consultants (or local facilitators), tenants can address these hurdles and fully realise the potential for the benefits afforded by Trade Agreements in Vietnam.

Due to the complete and efficient trade infrastructure in Vietnam, factory tenants who rent a factory for lease in Vietnam for industrial production will always be taken advantage of on the international market and will keep growing stronger and achieving success within the life cycle of the project.

Factor 4: Competitive Labor Costs

Vietnam has long been recognised as a low-cost, technically skilled service provider and, therefore, a natural candidate for cost-reducing manufacturing operations. Because in Vietnam the cost of labour is competitive, it means that the costs of overheads are reduced and profitability is improved. The presence of a young, energetic workforce also assists industries depending on manual labour, including textile production and electronics assembly.

Besides the factor of cost, the Vietnamese workforce is fast learning; there are more and more vocational training programmes and technical colleges. This guarantees tenants the ability to recruit qualified people for higher-complexity needs, e.g., operators of machinery or quality control staff.

Factory for Lease in Vietnam 101: Why Foreign Investors Should Choose Vietnam As Their Base in Asia?
Source: The Investor

However, labour costs in Vietnam are gradually increasing with the economic expansion. Tenants should also take the future trend of wage increases into account in their long-term decisions. Although Vietnam is still an inexpensive option as compared with other manufacturing factories in Asia, Vietnam is an attractive location for a factory for lease in Vietnam.

Factor 5: Government Incentives

The Vietnamese government actively promotes foreign investments in the country by providing a wide range of incentives, and the country has gained a considerable attraction to manufacturing tenants. Among the incentives are corporate income tax reductions, land-use permit exemptions, and machinery and material import duty exemptions. To the tenants who rent a factory for lease in Vietnam, these advantages considerably lower operating costs and offer a cash injection in the early stages of setting up an operation.

In addition, certain industries, such as high-tech production, renewables, and export-oriented firms, are also entitled to even more intense incentives. Tenants can take advantage of this and come out ahead in the market and help to contribute to the economic growth of Vietnam. Facilitation of business by the government, not only administratively but also by easing the approval process for factory lease agreements. That commitment is evidenced by the incentives offered by Vietnam to establish itself as the “top of the line” choice of global manufacturers in search of a factory for lease in Vietnam.

Factor 6: Expanding Industrial Parks

Industrial park in Vietnam
Source: CORE5 Vietnam

Vietnam’s industrial parks are continuously evolving to meet the needs of modern manufacturing businesses. In terms of north to south, the country has highly developed industrial network facilities that include state-of-the-art facilities, pre-formed (constructed) factories, logistics centres, and utilities. In Vietnam, these parks provide a plug-and-play solution in that tenants who rent a factory for lease in Vietnam do not have to raise a factory from scratch, thus tenants can start the business right away.

In addition, industrial parks in Vietnam are usually grouped around closely integrated, specialised industries (e.g., electronics or food processing), giving rise to clusters of excellence and supply chains. Tenants benefit from this ecosystem that fosters collaboration and productivity. With the proliferation of industrial parks in less urbanised areas, tenants find leasing options significantly cheaper while benefiting from modern facilities.

Factor 7: Diverse Industry Growth

Vietnam’s rich industrial experience presents itself in a variety of fields, including electronics, textiles, food processing, and renewable energies. Tenants of factory for lease in Vietnam can tap into this diversity to select from a wide array of suppliers, customers, and labour with industry knowledge to meet their requirements.

For example, tenants in the electronics industry take advantage of Vietnam’s existing supply chain for components and finished assemblies. Likewise, food processors can also utilise the country’s vast agricultural resources. This sector-motivated growth drives innovation and partnership that allows tenants to increase operations more effectively.

Small-Scale Factory for Lease in Vietnam: A Perfect Fit for Startups
Source: Freepik

However, tenants must carefully select a factory site appropriate to their industry needs. Each of these can have a significant impact on operational effectiveness in terms of proximity to source materials, specialist trades workforce, or specialist equipment.

Factor 8: Sustainability Trend

Sustainability is becoming a key consideration for the process of renting a factory for lease in Vietnam. With the increased demand for green products by global consumers, manufacturers need to evolve to satisfy consumer expectations. Vietnam authorities have also put in place policies that promote sustainable behaviour, including waste minimisation, energy efficiency, and renewable energy establishment.

For the tenants, it offers a chance to have a better standing of their brand. The use of solar panels or energy-saving systems by factories does lead to reduced operating costs and enhanced production in general. In addition, green practices are in tune with global standards and, if done so, expand the base for collaboration with green companies.

Finding A Warehouse For Lease In Vietnam: Top 8 Common Mistakes Startups Usually Make
Source: CORE5 Vietnam

To keep pace, tenants should screen the sustainable characteristics of possible factory premises for leasing. Investing in green technologies or industrial parks promoting green technologies actively confers a sustainable competitive advantage to the company and the environment.

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Vietnam has established itself as a highly desirable factory leasing location and provides unparalleled advantages for multinational manufacturers. In light of the farthermost production base development, excellent position, low labour, and favourable trade relations, the country has formed a possible platform for the success of a huge number of businesses. Government subsidies, industrial park development, and the type of industrial growth create conditions for operational consolidation and the potential for sustained success.

Furthermore, Vietnam’s eco-friendly and sustainable endeavour is in harmony with the worldwide green lifestyle trend, which is an ideal site to attract green-minded investors. When thinking about the factory for lease in Vietnam, it goes beyond reaching an industrial milestone, but finding a robust platform from which to aggressively develop the business in an evolving market.

World class factory for lease in Vietnam
Source: CORE5 Vietnam

If you’re new to Vietnam and looking for a factory for lease in Vietnam, CORE5 Vietnam provides excellent options tailored to your needs. Their factories are strategically located, offering prime access, spacious layouts, and modern facilities designed to enhance your operations. Dedicated support ensures a smooth leasing process and long-term satisfaction.

Stay updated on their latest developments to secure the perfect space for your business. Schedule a tour of their factory village to explore options that align with your requirements. With a commitment to delivering high-quality industrial spaces and exceptional customer service, CORE5 Vietnam helps you find the ideal location to grow your operations and thrive in Vietnam’s dynamic industrial market.

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