Global manufactures looking to diversify their supply chains and reduce risks are turning to Vietnam. The country offers political stability sustained economic growth, low inflation, rising foreign investment, a young and hardworking population, and fast-growing industrial zones.
Vietnam’s strong growth continues to support its position as a manufacturing hub:
GDP growth: Vietnam’s economy grew 8.02% in 2025 and 8.18% in the first half of 2026.
Industrial growth: Industry expanded by 8.8% in 2025 and 9.86% in the first half of 2026.
Foreign investment: Registered FDI reached US$34.65 billion in the first half of 2026.
his guide looks at the main industrial hubs, costs, incentives and regulatory updates manufacturers should know when planning operations in Vietnam.
Vietnam now has 478 established industrial parks, with 324 already operating at an average occupancy rate of around 79%. Ready-built factories also remain in strong demand, with occupancy at approximately 86% in Northern Vietnam and 92% in Southern Vietnam in Q2 2026.
Vietnam’s provincial mergers reshaped several major industrial hubs and reduced the country to 34 provincial-level units reshaping several major industrial regions.
Northern Vietnam: Industrial park occupancy reached around 82.5% in Q2 2026, with demand supported by electronics, semiconductors and other high-value manufacturing and total industrial land stock stood at approximately 12,900 hectares.
Southern Vietnam: With demand also remaining strong, industrial land net absorption reached 124 hectares in H1 2026, up 125% year-on-year, while ready-built factory occupancy stood at around 91%.
New supply: More industrial and ready-built space continues to enter the market. Southern ready-built factory stock has now exceeded 6.1 million m², while further industrial projects are being prepared in both the North and South.
Rental trends: Northern industrial rents continued to rise in Q2 2026, while Southern asking rents remained broadly stable. Ready-built factories in the South averaged around US$5.2/m²/month, with warehouses at about US$5.0/m²/month.
For manufacturers planning a new site, these differences in availability, occupancy and cost make location selection an important early decision.
The provincial mergers created larger, more efficient industrial areas. Here is a simple breakdown of the best regions.
Hanoi is the capital of Vietnam and is situated in northern Vietnam on the western bank of the Red River, about 85 miles (140 km) inland from the South China Sea. The City has a population density considerably higher in the urban area, approaching 20,100 per square kilometer.
Hanoi has been developing several critical industries, with a focus on sectors and products that use advanced technologies and create higher value. High-tech businesses with strong export potential, including digital control, automation, robotics, nanotechnology, plasma, laser and biotechnology, are gradually reshaping the city’s industrial sector.
Other manufacturing sectors, such as motor vehicles, shipbuilding, food processing, steel, petrochemicals, and software, have been identified as crucial for the city’s industrial development.
Hanoi continues to expand its industrial network to support manufacturing and investment. As of 2026, the city has 75 industrial clusters in operation, covering around 1,469 hectares. These clusters provide space for small industrial businesses, traditional craft industries and other manufacturers across the city.
One of the most well-known industrial parks is Hoa Lac Hi-tech Park, which services businesses in the commerce and software development industries. It is the first and largest hi-tech park in Vietnam, with a total area of 1586 hectares in Hanoi's Capital. The park consists of the following main function industrial zones:
Software development zone
Training and research zone
High-tech industrial zone
Residential zone
Hai Phong is one of the largest and most important seaports in Northern Vietnam. It is also one of the most modern seaports in Southeast Asia, with advanced navigation and networking facilities. Hai Phong Port handles large cargo and passengers and is an essential gateway for Vietnam's trade with other countries. The port is located on the coast of the Gulf of Tonkin, which is one of the busiest shipping lanes in the world.
Industry remains central to Hai Phong’s economy, with manufacturing continuing to drive much of its growth. In 2026, the city is placing particular focus on electronics, high technology, mechanical engineering, automotive manufacturing, textiles and footwear. Shipbuilding also remains an important sector and is seeing renewed investment and activity.
Since merging with former Hai Duong on 1 July 2025, Hai Phong has expanded its industrial base considerably. By 2026, the city is home to 46 industrial parks, supported by a larger labour market, more industrial land and stronger regional connections.
Many of Hai Phong’s established industrial areas are concentrated around Hai An, An Duong and Thuy Nguyen. These locations benefit from strong connections to Cat Bi International Airport, major seaports and key road networks, giving manufacturers convenient access to both domestic and international markets.
Da Nang – Modern and Balanced Industrial Hub
Da Nang is a well-planned coastal city with strong port infrastructure and a growing industrial base. Its key industries include machinery, electronics, chemicals and shipbuilding. Following the 2025 merger with Quang Nam, the expanded city has nine industrial parks in operation. Lien Chieu Industrial Park is one of its established industrial locations, covering around 289 hectares.The wider Quang Nam–Da Nang zone now has simpler administration, making it easier to get land and build facilities.
Da Nang and Chu Lai: A Growing Industrial Corridor
Following the 2025 merger with Quang Nam, Da Nang now has a much broader industrial base across central Vietnam. The expanded city includes the Chu Lai Open Economic Zone, which covers more than 27,000 hectares and brings together several established industrial parks and logistics areas.
Chu Lai supports automotive and mechanical manufacturing, supporting industries, logistics, electronics and other high tech sectors. Established industrial areas such as Dien Nam Dien Ngoc, Hoa Cam and Lien Chieu also continue to play an important role in Da Nang’s manufacturing network.
Ho Chi Minh City (now includes Binh Duong and Ba Ria-Vung Tau)
Ho Chi Minh is the largest city in Vietnam. The City is located on the Saigon River and is Vietnam's principal port and largest City, with an estimated population of over fourteen million. The expanded city covers about 6,773 km2.
Ho Chi Minh City is home to several key industries and sectors. Some of the prominent ones include:
Textile and garment industry: The city is one of the largest textile and garment manufacturing centers in Vietnam
Electronics industry: The city has a growing electronics industry with several multinational companies having their manufacturing plants in the city
Food processing industry: The city has a well-developed food processing industry with several large companies having their manufacturing plants in the city
Chemical industry: The city has a well-developed chemical industry with several large companies having their manufacturing plants in the city.
As of July 1, 2025, Ho Chi Minh City has expanded to include former Bình Dương and Bà Rịa–Vũng Tàu provinces, creating a mega-urban zone with over 14 million residents and streamlining industrial governance.
Some of the notable industrial parks in Ho Chi Minh City include:
Dong Nai (now includes Binh Phuoc)
Southeast Vietnam's Dong Nai province may be near Ho Chi Minh City. It is part of Vietnam's southern critical economic region and has attracted investments in electronic component manufacturing, textile and garment production, and tech-intensive industrial goods manufacturing.
Dong Nai has attracted investments in the production of textiles and apparel, electronic component manufacturing, and technologically complex industrial items.
Some of the major industrial parks in Dong Nai include:
Following its merger with Bình Phước effective July 1, 2025, the expanded Dong Nai province is poised to leverage its enlarged territory and population for enhanced industrial and agricultural development.
Can Tho - Mekong Delta Agro-Industrial Hub
Can Tho is the largest city in the Mekong Delta, located on the western bank of the Hau River, and is the economic and cultural center of the region. It is also the gateway to the floating markets, the biggest tourist attraction in the area.
Can Tho is known for its agricultural products such as rice, fruit, and fish. The City is also home to many industrial parks and factories that produce textiles, garments, footwear, and other consumer goods.
Several industrial parks operate in Can Tho, including Tra Noc 1 and Tra Noc 2. Both were part of Vietnam’s eco-industrial park programme, where businesses adopted cleaner production and resource-efficiency measures to reduce energy use, water consumption and emissions.
In recent years, Vietnam has solidified its position as a top destination for foreign manufacturing companies seeking to diversify and increase the resilience of their supply chains. With a stable political system, commitment to sustainable growth, relatively low inflation, strong FDI inflows, a youthful and digital population, and a robust manufacturing sector, Vietnam continues to offer an extraordinary opportunity for international investors.
Foreign investment remained strong in 2025, with Vietnam recording US$38.42 billion in registered foreign investment and US$27.62 billion in disbursed FDI, the highest disbursement level in five years. Momentum continued into 2026, with total registered foreign investment reaching US$18.24 billion in the first four months, up 32% year on year. Disbursed FDI reached US$7.40 billion over the same period, up 9.8%.
Following provincial mergers effective July 1, 2025, key manufacturing hubs now include Ho Chi Minh City (incorporating former Binh Duong and Ba Ria–Vung Tau), Dong Nai (expanded with Binh Phuoc), Da Nang (merging Quang Nam), and Hai Phong (merging Hai Duong). These mergers have streamlined administrative processes and created larger, more coherent industrial zones with expanded labour markets and improved regional connectivity.
Vietnam has emerged as a desirable destination because of its strategic position in Southeast Asia. As international corporations look to reduce their dependence on China and take advantage of regional growth potential, Vietnam’s location offers a compelling alternative. The 1,450 km East–West Economic Corridor – stretching from Myanmar through Thailand and Laos to Vietnam – plays a vital role in strengthening regional connectivity, expanding trade, attracting investment, and facilitating faster, lower‑cost logistics for export‑oriented manufacturers. Recent forums in April 2026 between Vietnam and Laos have reaffirmed commitments to enhance this corridor, with over 20 memoranda of understanding signed for the 2026‑2030 period, covering areas such as seaport and coastal zone development, cross‑border e‑commerce, renewable energy, and telecommunications infrastructure. Deep‑water ports in Hai Phong, Da Nang, and Cai Mep – many of which have recently undergone expansion – provide world‑class infrastructure for global trade.
One of the key advantages that makes Vietnam an attractive destination for foreign manufacturing companies remains its competitive labour costs, although the gap with China has narrowed. Under Decree No. 293/2025/ND-CP, effective January 1, 2026, regional minimum wages were raised by an average of 7.2%. The new monthly minimum wages are:
Region I (Hanoi, HCMC, Hai Phong, Vung Tau, Bien Hoa): VND 5,310,000 (approximately US$204)
Region II (Hanoi/HCMC suburbs, Hue, Da Nang, Hai Duong): VND 4,730,000 (approximately US$182)
Region III (provincial cities): VND 4,140,000 (approximately US$159)
Region IV (rural areas): VND 3,700,000 (approximately US$142)
In practice, once mandatory social insurance, health insurance, and unemployment insurance contributions are included, employers should budget around US$250 to US$350 per month for unskilled labour.
Vietnam’s manufacturing sector continues to attract foreign investment thanks to its competitive tax incentives, cost‑efficiency, and favorable taxation policies. However, note that the Amended CIT Law, effective January 1, 2026, tightened eligibility criteria – incentives are no longer automatic based solely on location but are now awarded based on project quality, technology content, and environmental impact. The standard CIT remains 20%.
Below is a summary of key tax incentives available in 2026:
|
Incentive |
Rate |
Duration & Notes |
|---|---|---|
|
Standard CIT |
20% |
Applied to most manufacturing activities; standard rate since October 1, 2025 |
|
High‑tech / strategic tech activities |
10% |
Up to 25 years; includes 4‑year exemption + 9 years at 50% reduction |
|
Large‑scale digital semiconductor projects |
5% |
For 37 years (6‑year exemption + 13 years at 50% reduction); investment ≥ VND 6,000 billion (~US$250 million) |
|
Newly established SMEs |
Exemption |
3‑year CIT exemption from date of enterprise registration certificate |
|
Startups |
2‑year exemption + 4 years at 50% |
Applies to innovative startups |
Import Duty Exemptions: Machinery, equipment, and raw materials not locally produced are exempt from import duties, helping to reduce operating costs. Vietnam’s labour costs remain 40‑50% lower than China’s, offering a significant advantage in regional cost efficiency.
VAT Incentives: The standard VAT is 10% , Under Decree No. 174/2025/ND-CP, qualifying goods and services that would normally be subject to 10% VAT are temporarily taxed at 8% until 31 December 2026. Certain sectors and products are excluded from this reduction. Other VAT rules include:
0% for exported goods, non‑tariff areas, and export processing enterprises (EPEs)
5% for essential goods like foodstuffs, medical products, and agriculture
Standard 10% for other manufacturing activities (with 8% temporary reduction until year‑end 2026)
These efficient taxation policies and cost advantages, coupled with the country’s efforts to foster a business‑friendly environment, strengthen Vietnam's position as a competitive manufacturing hub in the region.
Vietnam is now party to 17 active FTAs — with two more under negotiation — providing preferential market access, reduced tariffs, and smoother trade flows with major partners such as the EU, Japan, and South Korea. These FTAs provide foreign businesses with preferential access to key global markets, reducing tariffs and facilitating smoother trade with major economies like the EU, Japan, and South Korea. This trade-friendly environment enhances Vietnam’s competitiveness, positioning it as a top choice for foreign investors seeking to capitalise on the country’s growing industrial sector.
In addition to the advantages provided by FTAs, Vietnam offers appealing tax incentives, such as preferential corporate income tax rates, import duty exemptions, and VAT incentives for manufacturers. The country’s labour costs are also 40-50% lower than China’s, providing a significant cost advantage. Together, these factors create a compelling business environment for foreign manufacturers, enabling them to reduce operational expenses, access global markets, and benefit from a skilled, affordable workforce.
Vietnam’s manufacturing industry has seen several recent legal updates aimed at improving the regulatory environment and aligning with international standards. These changes cover areas such as investment procedures, environmental regulations, labour laws, and tax policies. The updates are designed to enhance transparency, simplify administrative processes, and create a more favorable business climate for both local and foreign investors.
Decree 153/2024/ND-CP (effective Jan 5, 2025): Environmental protection fee on air emissions from industrial facilities.
Decree 119/2025/ND-CP, effective 1 August 2025, updated Vietnam’s rules on greenhouse gas emissions reduction and ozone-layer protection, which remain relevant for manufacturers in 2026.
Amended Investment Law (effective March 1, 2026): Foreign investors can now get an Enterprise Registration Certificate (ERC) before the Investment Registration Certificate (IRC) – cuts setup time.
Fast‑track mechanism for projects in industrial parks, hi‑tech zones, and free trade zones.
Decree 96/2026/ND-CP (March 31, 2026) provides implementation guidance.
Decree 236/2025/ND-CP (effective Oct 15, 2025): Applies to MNEs with consolidated revenue ≥ €750 million. Effective 15% minimum CIT for fiscal years starting on or after Jan 1, 2024. Affected firms should now focus on non‑tax incentives (grants, land rent reductions).
Decree 293/2025/ND-CP, effective 1 January 2026, increased Vietnam’s regional minimum wages by an average of 7.2%. The monthly minimum wages are:
Region II: VND 4.73 million
Region III: VND 4.14 million
Region IV: VND 3.70 million
Circular 121/2025/TT-BTC (effective Feb 1, 2026): Introduced updates to customs procedures, including greater use of electronic records and VNeID for customs system registration. It also allows conditional customs clearance in certain valuation cases while customs value consultations are completed.
Law 71/2025/QH15 (effective Jan 1, 2026): CIT exemption for first 2 years + 50% reduction for next 4 years for qualifying digital tech firms (AI, software, semiconductors).
CIT (Amended Law, effective Oct 1, 2025): 10% preferential rate for 15 years now tied to high‑tech, R&D, green projects – no longer automatic.
VAT (Decree 174/2025/ND-CP): 8% reduced rate extended until December 31, 2026.
PIT The revised Personal Income Tax Law, effective 1 July 2026, increases the monthly personal deduction to VND 15.5 million and the dependent deduction to VND 6.2 million. Salary and wage income for the 2026 tax year is also subject to a simplified five-bracket progressive tax schedule.
Resolution 254/2025 (effective Jan 1, 2026): Clarifies land allocation and leasing for industrial projects.
Social Insurance Law (effective July 1, 2025): Expanded coverage, continues into 2026.
Vietnam continues to be a strong manufacturing base for businesses looking to diversify production and access markets across Asia and beyond. Its industrial zones offer a mix of established infrastructure, competitive operating costs, access to major ports and a broad network of free trade agreements. Recent investment, tax and regulatory changes also give businesses more factors to consider when choosing where and how to set up.
Choosing the right industrial location depends on more than cost alone. Sector fit, workforce availability, logistics access, incentives and long-term expansion plans all matter. Choosing the right industrial location depends on more than cost alone. Sector fit, workforce availability, logistics access, incentives and long-term expansion plans all matter. Ascentium supports businesses entering and expanding in Vietnam with market entry, site selection, corporate setup, tax, accounting, HR and compliance support, helping businesses make informed decisions at each stage of their investment.