Overview of Factories in Vietnam: Trends and Opportunities in 2025

2025 is predicted to be an important milestone for the development trend of factory in Vietnam. Since many foreign investors are looking to Vietnam as a destination for production facilities thanks to its advantages such as FDI capital attraction, competitive labor costs and increasingly complete infrastructure. To gain a deeper understanding of this issue, let is explore the detailed content below
with Kizuna.

1. Overview of the Vietnam factory market in 2025

The value added in Vietnam is manufacturing market is expected to reach US$108.7 billion by 2025 with a compound annual growth rate of 3.33% from 2025 to 2029.

1.1. Market scale and growth

According to the General Statistics Office (GSO) of Vietnam, the country is GDP grew by 7.09% in 2024 despite economic challenges. Although this growth rate is slightly lower than those in 2018, 2019 and 2022, it still reflects a significant economic recovery.

In 2024, the economy showed gradual improvement, from 5.98% in the first quarter to 7.55% in the fourth quarter. At the beginning of the new year, HSBC forecasted Vietnam is GDP growth in 2025 at 6.5%, just ahead of the Philippines at $6.4.

Thanks to the above positive growth assessments, Vietnam is one of the leading manufacturing hubs in Southeast Asia. Industrial parks stretching from North to South are gradually being occupied, creating high demand for rental and ready-built factories.

Vietnam is one of the leading manufacturing hubs with many international standard factories.

1.2. Occupancy rate of industrial parks (>80%)

Occupancy rates in key industrial parks such as Binh Duong, Bac Ninh, Dong Nai and Hai Phong have been over 80%. Some areas have even reached 90-95%, showing that the demand for factory space is increasing.

The increase in occupancy rates also encourages new industrial parks to expand their scale ordevelop Vietnam multi-storey factory models to optimize space. This demand is especially necessary for large cities such as Ho Chi Minh City and Hanoi - where industrial land funds are increasingly scarce.

1.3. Market drivers

Vietnam has become an important manufacturing hub with significant investments from global companies since the Government is creating an environment to welcome foreign investment, develop infrastructure, etc. Notably:

● Development of fuel location and infrastructure: As of 2022, Vietnam has 61/63 provinces and cities with industrial parks and economic zones, including 403 industrial parks, 18 coastal economic zones and 26 border economic zones. In addition to strategic locations, Vietnam also provides strong infrastructure such as airports, seaports, highways, etc.
● Manufacturing capabilities boosting with digital: Vietnam is also committed to
digitalization in its national digital transformation program by 2025. Applying technology to production increases operational efficiency and reduce operating costs.
● Support policies from the Government: The Vietnamese Government encourages production through tax incentives, sectoral incentives, Decree 57/2021/ND-CP and
Resolution 115/NQ-CP (2020).

The Government is creating numerous conditions to attract foreign investment.

2. Modern factory development trends

The constant development of the manufacturing industry in Vietnam requires the factory model to be modern, flexible and sustainable. New trends in factory development today include:

2.1. Transformation from traditional to modern factories

Previously, almost Vietnam factories had simple designs which focuses on maximizing space. Nevertheless, modern factories are gradually replacing traditional factories such as integration of IoT (Internet of Things), AI (Artificial Intelligence), warehouse management monitoring systems and decrease in operating costs.

2.2. Ready-built factories

The Ready-built factory (RBF) model is also gradually becoming the choice of small and medium-sized manufacturing enterprises. This type of factory is designed following international standards with full amenities while still reducing construction costs, assisting enterprises quickly and economically meet production requirements. 

Ready-built factories are gradually becoming the choice of many enterprises.

2.3. Trend of multi-storey factories

In large urban areas such as Ho Chi Minh City and Hanoi, multi-storey factory models are gradually becoming popular since they maximize land area and provide flexible production space. Multi- storey factories are often designed with modern internal transportation systems such as conveyor belts, elevators, etc. to save space and improve business accessibility.

2.4. Environmental and safety standards

The Vietnamese Government is also promoting green factory standards, encouraging the application of energy-saving solutions such as LEED (Leadership in Energy and Environmental Design) or EDGE (Excellence in Design for Greater Efficiencies). These standards allow enterprises reduce their environmental impact, improve their image and meet the requirements of global partners.

Factories must meet many international standards.

3. Geographical distribution of factory clusters

Industrial park clusters are distributed throughout the country with their own advantages, attracting investment in specific industries.

3.1. Northern region: Hanoi, Hai Phong, Bac Ninh

The Northern industrial park cluster focuses on high-tech, electronics and auto parts industries. Notably, large industrial parks such as VSIP Bac Ninh and Dinh Vu Industrial Park have attracted international corporations such as LG, Samsung, Foxconn, etc.

3.2. Southern region: Ho Chi Minh City, Binh Duong, Dong Nai

The Northern industrial park cluster is considered the country’s key manufacturing hub owning numerous large industrial parks such as My Phuoc Industrial Park (Binh Duong), Bien Hoa
Industrial Park (Dong Nai). The developed industries here include textiles, food, mechanical engineering, etc.

3.3. Emerging regions

In addition to the two key areas above, neighboring provinces such as Long An, Tay Ninh, Thanh Hoa and Nghe An have also emerged thanks to large land funds, low costs and numerous preferential policies to attract investment.

Each factory cluster has its own advantages.

4. Competitive advantages of Vietnam factories

Factories in Vietnam also possess numerous competitive advantages in terms of location, policies, human resources and infrastructure such as:

4.1. Strategic position in the global supply chain

Vietnam is located near major manufacturing hubs such as China and ASEAN countries, making it easy for enterprises to access the global supply chain. In addition, expressways such as the North-South, Ho Chi Minh City-Long Thanh, or the seaport system and transportation network facilitate quick connection to industrial parks.

4.2. Investment incentive policy

The Vietnamese Government has also continuously promoted investment attraction through many preferential policies such as land rental cost support, administrative procedure simplification, corporate income tax exemption and reduction, etc. to facilitate foreign investors.

4.3. Abundant human resources

As of 2018, 60% of Vietnam is population is of working age. Enterprises may easily recruit human resources for manufacturing industries. In addition, the education and vocational training system is gradually being improved to meet the needs of modern industries such as electronics, auto parts manufacturing, etc.

Vietnam has 60% population of working age.

5. Instructions for selection of appropriate factory

For foreign enterprises, choosing a factory in Vietnam is an important step to ensure operational efficiency and optimize costs. Specifically:

5.1. Evaluation criteria

Upon choosing a factory in Vietnam, enterprises need to consider whether the location is close to traffic routes, seaports, and airports for convenient travel. In addition, they consider the infrastructure system, environmental safety standards, rental rates, and flexibility in expansion.

5.2. Factory lease/purchase process

The factory lease/purchase process in Vietnam needs to go through the following items:

● Research on industrial parks, rental rates and support policies.
● On-site survey such as assessment of infrastructure and operating conditions before conclusion of the contract.
● Negotiation of contract terms such as term, rental rates, maintenance conditions, etc.
● Completion of legal procedures such as business registration, application for operating license, etc.
● Verification of the factory handover conditions and installation of machinery, commencement of operation.

5.3. Business support services

Some entities support ready-built factory services such as Kizuna, assisting enterprises quickly set up and invest in factories at optimal costs and focus resources on production and business with peace of mind. Choosing a Vietnam ready-built factory construction support service also make enterprises possible to optimize time and save a lot of construction effort.

Some entities support ready-built factory lease

Vietnam factory market in 2025 is growing strongly, creating attractive opportunities for domestic and international investors. Thanks to a strategic location, preferential investment policies, abundant human resources and gradually improving infrastructure, Vietnam is affirming its important role in the supply chain. If you wish to learn more about ready-built factory services, please do not hesitate to contact our hotline 0272 3900191 for the earliest consultation.