Green factories therefore emerge as a critical link where enterprises can control energy use, emissions, and operational efficiency starting from infrastructure.

In Vietnam, this trend is attracting growing interest from businesses, and the following insights from KTG Industrial clarify the roadmap for realizing green factories in manufacturing.

Why are green factories a top priority for enterprises today?

Green factories are being placed at the top of corporate priorities as pressure continues to intensify from multiple directions.

On one hand, multinational corporations within global supply chains require manufacturing partners to demonstrate tangible efforts in emission reduction.

On the other hand, the application of carbon taxes in many countries increases operating costs if emissions are not effectively controlled.

At the same time, major investors increasingly favor enterprises that pursue sustainable development as a long term evaluation criterion.

The factory of the future: Three action pillars

Reducing emissions

The first pillar focuses on avoiding emissions by improving energy efficiency and strengthening operational management, helping to reduce waste directly at the production stage.

Next, enterprises need to innovate processes and technologies, such as applying 3D printing or replacing fossil fuels with hydrogen in energy intensive industries.

Finally, the transition to renewable energy sources such as solar and wind power forms a critical foundation for long term emission reduction and progress toward Net Zero.

Reducing emissions through clean energy and new technologies

Reuse and storage

In addition to reducing emissions, resource reuse plays a vital role in the green factory model.

Recycling and remanufacturing activities help extend material life cycles, reduce demand for virgin resources, and limit waste generation.

At the same time, carbon capture, utilization, and storage (CCUS) solutions are increasingly viewed as complementary approaches, enabling control of unavoidable emissions and reducing long term environmental impacts.

Offsetting

When it is not possible to eliminate all emissions, enterprises must rely on offsetting solutions to address the remaining portion.

Through environmental protection projects such as reforestation, ecosystem restoration, or participation in certified carbon credit programs, emissions can be effectively neutralized.

Through offsetting, enterprises can both manage environmental impacts and reinforce long term commitments to sustainable development

Three steps roadmap for implementing green factories

To realize green factory development goals, enterprises should adopt a phased approach rather than implementing fragmented initiatives.

Step 1: First, measuring the carbon footprint is the foundation. This includes both direct and indirect emissions across Scopes 1, 2, and 3, enabling enterprises to accurately identify emission sources throughout the entire production chain.

Step 2: Next, based on assessment results, enterprises set appropriate emission reduction targets that balance cost, efficiency, and expectations from the market, customers, and investors.

Step 3: Finally, technological solutions, operational plans, and implementation partners are selected and prioritized, ensuring that the transition toward green factories is stable and sustainable over the long term.

KTG Industrial – Orientation toward green factory development aligned with ESG standards

Rather than pursuing superficial trends, KTG Industrial translates ESG commitments into practical green factories with a strong focus on operations.

From the design stage, infrastructure is carefully planned to minimize emissions and ensure stable working conditions.

In addition to LEED and LEED Gold certifications, factories are equipped with rooftop solar power systems as well as modern lighting, ventilation, and fire prevention systems.

These sustainable operational solutions not only contribute to environmental protection but also optimize long term operational efficiency for investors.

KTG Industrial aims for operationally efficient green factories

Conclusion

Implementing the green factory model enables enterprises to proactively control emissions, enhance production efficiency, and meet sustainability requirements.

When emission reduction, energy efficiency, and clean energy transition measures are executed in a structured manner, achieving Net Zero in manufacturing becomes a realistic and long term objective.

References

[1] Küpper, D., Kuhlmann, K., Pieper, C., Burchardt, J., & Schlageter, J. (2020, June). The Green Factory of the Future. Boston Consulting Group.

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As environmental factors and social responsibility directly influence investment strategies, the process of selecting suitable production infrastructure in Vietnam has become more complex.

The following article from KTG Industrial analyzes these practical challenges.

Why are FDI enterprises racing to choose green industrial parks?

From an international perspective

The EU’s implementation of CBAM has required enterprises to disclose carbon emission data directly at the production stage, rather than focusing solely on exports.

As a result, factory location, access to clean energy, and green infrastructure standards within industrial parks (IPs) have become critical conditions.

In addition, the EU’s CSRD directive expands reporting requirements across the entire supply chain, meaning that factories, logistics systems, and operating partners all directly affect ESG compliance and the transparency of financial reporting.

Environmental transparency requirements push FDI enterprises to prioritize green industrial parks

At the domestic level

In Vietnam, Power Development Plan VIII, together with the orientation toward developing eco-industrial parks, is gradually forming new criteria for screening investment projects.

Models that lack sustainable energy solutions, environmental control, and synchronized social infrastructure will find it difficult to attract high-quality FDI capital.

Therefore, green industrial parks are seen as a strategic direction, enabling FDI enterprises to meet international requirements while reducing long-term legal and operational risks.

Three major challenges from ESG

Environmental challenge (E): The renewable energy equation

Delays in the DPPA mechanism (Direct Power Purchase Agreement)

During the implementation of ESG in Vietnam, many FDI enterprises face difficulties in accessing renewable energy.

Previously, regulations required all power purchase and sales activities to go through EVN, making the direct use of wind or solar power from private suppliers almost unfeasible.

Currently, although Power Development Plan VIII has been approved, the direct power purchase agreement (DPPA) mechanism still lacks detailed implementation guidelines [1].

As a result, even enterprises with strong financial capacity and clear ESG commitments struggle to access officially recognized clean power, forcing them to be more cautious when selecting industrial parks and accompanying energy infrastructure.

Delays in finalizing DPPA make it difficult for FDI enterprises to access clean energy

Uncertainty around rooftop solar power

Many FDI enterprises expect rooftop solar power to provide rapid access to clean energy. However, practical implementation in Vietnam still faces a number of limitations.

Currently, Decree 58/2025 allows the development of self-generation and self-consumption rooftop solar models, but enterprises are still required to complete notification and registration procedures with regulatory authorities and power utilities to ensure operational safety [2].

In addition, technical and fire prevention requirements for factories, especially large scale facilities or older plants, are relatively stringent.

If electricity output is not fully consumed, grid connection or resale back to the power system remains difficult due to the lack of pricing frameworks and clear guidance [3].

Therefore, FDI enterprises should prioritize industrial parks that already offer integrated self consumption rooftop solar systems or are located in areas piloting the direct power purchase agreement (DPPA) mechanism to reduce implementation risks.

KTG Industrial owns integrated rooftop solar power infrastructure

Social challenge (S): Not only wages and benefits, but long term stability

Beyond wages and benefits, living conditions and access to social housing for workers are playing an increasingly important role in ESG assessments.

However, in many industrial parks, the supply of NOXH remains limited due to complex investment procedures and prolonged development timelines.

In the competition to attract skilled labor, FDI enterprises located in industrial parks with integrated accommodation infrastructure and supporting amenities tend to maintain a more stable workforce.

Therefore, when selecting production locations, it is essential to consider the surrounding radius of the industrial park. Where service land or housing is insufficient, transportation and labor management costs are likely to increase significantly over the long term.

Governance challenge (G): Transparency and data gaps

In practice, many enterprises in Vietnam still lack clear ESG commitments and standardized reporting systems.

This becomes a major limitation when FDI enterprises are required to consolidate emission data, particularly Scope 3, for reporting to parent corporations.

Without transparent information on wastewater treatment, waste management, or energy consumption, audit processes become significantly more challenging.

Therefore, FDI enterprises should prioritize smart industrial parks where operational data is digitalized and readily available for reporting when required.

Outlook for the future: Vietnam remains a “bright spot”

Despite ongoing challenges related to infrastructure and regulatory frameworks, Vietnam continues to be viewed as a promising destination for sustainable investment flows.

An increasing number of enterprises are expected to implement ESG commitments within the next 2 to 4 years, aligning with the Government’s Net Zero 2050 roadmap.

At the same time, current constraints create opportunities for FDI enterprises to negotiate more favorable pricing at industrial parks undergoing a transition toward green development.

Against this backdrop, the market is gradually moving away from traditional industrial park models toward eco industrial parks, led by VSIP, DEEP C, and Viglacera.

KTG Industrial – ESG oriented industrial real estate solutions

KTG Industrial aims to position itself as an industrial real estate developer aligned with ESG standards, prioritizing green infrastructure development, efficient operations, and transparent data management.

KTG Industrial’s ready-built warehouses and factories are developed under a comprehensive master plan, integrating sustainable energy solutions, safe working environments, and modern governance systems.

Through this approach, FDI enterprises can meet increasingly stringent ESG requirements while maintaining cost control and mitigating long term operational risks in Vietnam.

KTG Industrial accompanies FDI enterprises in developing ESG aligned green factories

Conclusion

The adoption of ESG is increasingly influencing investment decisions, making the leasing of green factories a long term direction for many FDI enterprises.

Although Vietnam continues to face challenges related to legal frameworks, infrastructure, and data availability, the trend toward green and eco industrial park development is becoming more evident.

Accordingly, enterprises that proactively select suitable infrastructure from the outset can reduce compliance risks, better control operating costs, and establish a stable foundation for sustainable growth.

References

[1] Ky Phuong (2025). Mua ban dien truc tiep theo co che van con la “nut that”. Thoi bao Tai chinh Viet Nam.

https://thoibaotaichinhvietnam.vn/mua-ban-dien-truc-tiep-theo-co-che-van-con-la-nut-that-183871.html

[2] Thu Hang (2025). Tuan thu quy dinh phap luat khi lap dat dien mat troi mai nha. Bao Hai Phong.

https://www.vietnam.vn/tuan-thu-quy-dinh-phap-luat-khi-lap-dat-dien-mat-troi-mai-nha

[3] Thach Lam (2025). Installing solar power, people and businesses are still stuck in procedures and legality. Bao Lao dong.

https://news.laodong.vn/kinh-doanh/lap-dien-mat-troi-nguoi-dan-va-doanh-nghiep-van-vuong-thu-tuc-phap-ly-1582468.ldo

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List of industrial parks in Vietnam in 2025

According to data as of January 2025, Vietnam has 433 IPs in operation. In particular, the North has more than 100 industrial parks, the Central region has over 56 industrial parks and the South has nearly 183 industrial parks. Despite such a large number of industrial parks, almost every region has a fairly high occupancy rate. Typically, the industrial parks in the North have been filled up to about 83% and the South is over 90%.

Moreover, land rental prices in industrial parks in Vietnam are constantly increasing. As of the last 3 months of 2024, the average price in the North is 137 USD/m2/remaining term or in the South is 175 USD/m2/remaining term. And according to predictions, by 2027, the Vietnamese real estate market will still be very bustling when rental prices are expected to increase by 4 – 8%/year.

List of industrial parks in Vietnam – North

Most of the industrial parks in the North have an area of ​​over 10 hectares

Below are all the industrial parks operating in Northern Vietnam:

Bac Giang Province (20 Industrial Parks)

Bac Ninh Province (22 Industrial Parks)

Bac Kan Province (1 Industrial Park)

Currently, Bac Kan has only one industrial park approved by the Government for operation and technical infrastructure investment: Thanh Binh Industrial Park, with an area of 82 hectares.

In addition, the province has 16 industrial clusters (smaller in scale than industrial parks), of which 10 clusters have not yet received technical infrastructure investment. These include:

Cao Bang Province (2 Industrial Parks)

Dien Bien Province (1 Industrial Park)

Similar to Bac Kan, Dien Bien also has only one industrial park, which is Tay Bac Industrial Park.
According to Official Dispatch No. 438/TTg-KTN issued by the Prime Minister in 2014, the park covers an area of 55 hectares.

Ha Giang Province (2 Industrial Parks)

Hai Duong Province (21 Industrial Parks)

Hai Phong Province (20 Industrial Parks)

Ha Noi City (19 Industrial Parks)

Hoa Binh Province (8 Industrial Parks)

Ha Nam Province (9 Industrial Parks)

Hung Yen Province (20 Industrial Parks)

Lai Chau Province (2 Industrial Parks)

Lang Son Province (2 Industrial Parks)

Lao Cai Province (3 Industrial Parks)

Phu Tho Province (7 Industrial Parks)

Nam Dinh Province (12 Industrial Parks)

Ninh Binh Province (9 Industrial Parks)

Son La Province (1 Industrial Park)

Son La currently has only one industrial park named Mai Son Industrial Park, with an area of 150 hectares.

Tuyen Quang Province (3 Industrial Parks)

Quang Ninh Province (16 Industrial Parks)

Thai Binh Province (12 Industrial Parks)

Thai Nguyen Province (10 Industrial Parks)

Vinh Phuc Province (20 Industrial Parks)

Yen Bai Province (5 Industrial Parks)

List of industrial parks in Central Vietnam

Industrial parks in Central Vietnam have only been established in recent years and have developed at a slower pace compared to those in the North and the South.

Not falling behind the Northern region, Central Vietnam also hosts many large industrial parks that play a significant role in the national economy. These include:

Binh Thuan Province (9 Industrial Parks)

Binh Dinh Province (10 Industrial Parks)

Da Nang City (11 Industrial Parks)

Ha Tinh Province (10 Industrial Parks)

Dak Lak Province (2 Industrial Parks)

Dak Nong Province (3 Industrial Parks)

Khanh Hoa Province (6 Industrial Parks)

Kon Tum Province (6 Industrial Parks)

Lam Dong Province (3 Industrial Parks)

Ninh Thuan Province (4 Industrial Parks)

Gia Lai Province (3 Industrial Parks)

Nghe An Province (14 Industrial Parks)

Quang Binh Province (9 Industrial Parks)

Phu Yen Province (9 Industrial Parks)

Quang Tri Province (5 Industrial Parks)

Quang Nam Province (18 Industrial Parks)

Quang Ngai Province (10 Industrial Parks)

Thanh Hoa Province (22 Industrial Parks)

Thua Thien Hue Province (16 Industrial Parks)

List of Industrial Parks in Vietnam – Southern Region

The Southern region is home to the largest number of industrial parks in the country.

Compared to the Northern or Central regions, Southern Vietnam is a highly potential market for the robust development of industrial parks. As a result, both the number of parks and the area of each continue to grow. Detailed information is provided below:

Binh Phuoc Province (18 Industrial Parks)

Binh Duong Province (31 Industrial Parks)

Dong Nai Province (32 Industrial Parks)

Tay Ninh Province (9 Industrial Parks)

Ho Chi Minh City (19 Industrial Parks)

Can Tho City (8 Industrial Parks)

Ba Ria – Vung Tau Province (14 Industrial Parks)

Long An Province (29 Industrial Parks)

Dong Thap Province (4 Industrial Parks)

Tien Giang Province (4 Industrial Parks)

An Giang Province (5 Industrial Parks)

Ben Tre Province (2 Industrial Parks)

Vinh Long Province (5 Industrial Parks)

Tra Vinh Province (3 Industrial Parks)

Hau Giang Province (2 Industrial Parks)

Kien Giang Province (5 Industrial Parks)

Soc Trang Province (5 Industrial Parks)

Bac Lieu Province (2 Industrial Parks)

Ca Mau Province (3 Industrial Parks)

Reasons why businesses should invest in industrial parks in Vietnam

• Vietnam attracts significant domestic and foreign investment thanks to a range of competitive advantages, such as:
• A population of around 100 million, with a large and abundant labor force—more than 50 million people are of working age.
• A wide variety of industrial park types, including traditional industrial parks, export processing zones, supporting industrial zones, and specialized parks—offering investors multiple options based on their specific needs.
• The Vietnamese government consistently introduces supportive policies such as tax exemptions and reductions.
• Labor costs remain relatively low compared to other countries in the region. In particular, the Northern and Central regions have lower labor rental costs than the South.
• A favorable geographical location with fewer natural disasters like typhoons or floods compared to many other countries worldwide.

Conclusion

The list above outlines industrial parks in Vietnam by region. We hope this helps investors identify suitable locations for building factories or warehouses that meet their financial capacity and operational needs. For the best results in finding an ideal site, business owners may consider partnering with a reputable and transparent industrial real estate service provider.

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What is an Industrial Cluster?

According to Clause 1, Article 2 of Decree No. 68/2017/NĐ-CP, an industrial cluster is a geographically defined area with no residential population, established to attract or relocate small and medium-sized enterprises (SMEs), cooperatives, and collaborative groups for production and business activities. These clusters serve the purposes of industrial and handicraft production [1].

Put simply, an industrial cluster is a centrally planned area where SMEs—often in the same or related industries—operate, such as in agricultural, forestry, aquatic product processing, or handicrafts. With an area under 75 hectares, industrial clusters help businesses share infrastructure, reduce costs, and promote local economic development.

Industrial clusters contribute to promoting local economies.

Characteristics of industrial clusters

As of 2023, Vietnam had established 1,057 industrial clusters with a total area of over 38,000 hectares. Among these, 728 clusters are already in operation, attracting more than 14,300 projects and creating jobs for around 700,000 workers [2].

According to data from the Ministry of Industry and Trade, by 2025, Vietnam is expected to have 1,704 industrial clusters covering a total area of 58,123 hectares [3].

The occupancy rate of an industrial cluster refers to the percentage of industrial land that has been leased or approved for investment over the total industrial land area, as defined in Decree No. 32/2024/NĐ-CP. When preparing an investment report for cluster expansion, the occupancy rate must be included. To expand an industrial cluster, the occupancy rate must reach at least 60%, or the demand for industrial land must exceed the existing area [4].

Development plans for industrial clusters must be integrated into provincial planning, with clearly defined policies and solutions for management, synchronized infrastructure construction, and environmental protection, to conserve and effectively use resources [5].

In addition, businesses need to understand that industrial land area refers to the portion of land within the cluster allocated for lease, dedicated to industrial production and related services, as defined in the cluster’s detailed planning. This land is designated for industrial, handicraft production, and supporting services [6].

The land area for common technical infrastructure refers to the portion of land within the cluster reserved for building shared technical infrastructure works. This area is specified in the detailed plan and approved by the competent authorities [7].

Land Area Criteria for Defining an Industrial Cluster [3]:

• Industrial clusters generally cover an area from 10 to 75 hectares, depending on the socio-economic development orientation of each locality.
• For mountainous districts or craft village clusters, the minimum area can be 5 hectares to allow flexibility in planning and developing small-scale production.
• Industrial land area refers to the portion of land within the cluster planned for leasing or subleasing to enterprises for production and business activities. This is defined in the approved detailed planning by competent authorities.

Priority Investment Targets in Industrial Clusters:

• Production facilities that cause pollution and need to be relocated from residential areas.
• Enterprises that manufacture agricultural machinery and spare parts.
• Supporting industries listed in the national priority investment catalog.
• Consumer goods production using local raw materials and local labor.
• Processing industries for agricultural, forestry, and aquatic products.

Enterprises Operating Within Industrial Clusters:

•  Industrial clusters mainly attract small and medium-sized enterprises (SMEs), cooperatives, and collaborative groups, typically characterized by:
• Modest production scale, easy layout and simple operations.
• Focus on light industry, handicrafts, and agro-forestry-fishery processing.
• Capability for collaboration and production linkage in value chains.

Functions of Industrial Clusters:

• Redistribute small-scale production facilities to reduce pollution in residential areas.
• Promote local production, leveraging local materials and creating rural employment.
• Prioritize sectors such as:
  • Agricultural product processing
  • Handicrafts
  • Supporting industries for agriculture and domestic consumption.

Infrastructure Overview:

• Transportation: Convenient access to national highways, provincial roads, river ports, or seaports.
• Technical Infrastructure Includes:

• • Internal roads
  • Green space
  • Water supply
  • Wastewater treatment
  • Solid waste management
  • Fire protection system
  • Public lighting
  • Internal communication systems
  • Administration and security facilities

• Some modern clusters also include:

• • Administrative and service areas
  • Housing for experts and workers
  • Green spaces and landscaped areas for environmental protection

Role and Development Orientation:

• Serve as tools to drive local economic development, especially in rural and mountainous areas.
• Reduce pressure on major industrial parks by distributing industrial activity more evenly across the country.
• Align with the development of modern, eco-friendly clusters that support urbanization and improve quality of life.
• Contribute to job creation and local economic growth.
• Act as stepping stones for the development of larger industrial parks.
• Enhance competitiveness and promote industrialization and modernization nationwide.

An industrial cluster covers an area ranging from 10 to 75 hectares.

Priority industries for investment attraction in industrial clusters

The priority industries for investment in industrial clusters are clearly defined in Decree No. 68/2017/ND-CP (amended by Decree No. 66/2020/ND-CP). These are sectors and industries encouraged for development within industrial clusters to promote sustainable growth, enhance land-use efficiency, and protect the environment [8].

Specifically, they include:

Industries required to relocate from residential areas

• Production and business facilities that cause or are at risk of causing environmental pollution in residential areas, urban zones, or craft villages.
• Relocating these facilities into industrial clusters helps better control pollution and ensures a healthier living environment for the community.

Manufacturing of agricultural machinery and equipment

• Includes the production of spare parts, assembly, and repair of machinery and equipment for agriculture.
• This sector plays a key role in modernizing agriculture, improving productivity, and enhancing the quality of agricultural products.

Supporting industries

• Includes the production of supporting industrial products listed in the Government’s priority development list such as: electronic components, automotive and motorcycle parts, new materials, etc.
• These industries help boost domestic production capabilities and reduce dependence on imports.

Consumer products using local materials

• Facilities producing consumer goods such as food, furniture, textiles, etc., that utilize:

• • Local raw materials
  • Local labor force

• This supports regional economic development and leverages native resources effectively.

Industries and products with local advantages

• Priority is given to traditional crafts, specialty products, or signature regional items.

• Examples include: Bát Tràng ceramics, bamboo and rattan products, local agricultural and aquatic processing…

Agro-forestry-fishery processing industry

• Helps consume raw materials for farmers, adds value to products, and reduces the export of unprocessed goods.
• Encourages the development of value chain models from raw material areas to processing and distribution.

In addition, production facilities using advanced technologies, applying scientific research results, and committing to environmental protection are also encouraged within industrial clusters. These contribute to green and sustainable economic development.

Legal rights and obligations of enterprises in industrial clusters

Enterprises operating in industrial clusters have the following rights and obligations [8]:

Rights:

• Land use and extension: Enterprises have the right to use and extend land use as regulated by the Land Law. They may sublease land, factories, warehouses, and assets on the land.

• Use of infrastructure: Enterprises can use technical infrastructure and public service facilities within the cluster for a fee.

• Infrastructure investment: Enterprises are allowed to contribute capital or provide advances for the construction of industrial cluster infrastructure under agreements with the infrastructure investor.

• Support for recruitment and training: Enterprises receive support in recruiting and training labor for production and business operations.

• Incentives and support policies: Enterprises may benefit from various government incentives and support programs.

Obligations:

• Compliance with contracts and investment commitments: Enterprises must implement their investment projects and conduct operations in accordance with agreements signed with infrastructure developers and their investment registration certificates.
• Compliance with laws and regulations: Enterprises must fulfill obligations related to business registration, finance, environmental protection, occupational safety, and other legal requirements such as fire safety and public order.
• Local labor engagement: Enterprises are expected to actively engage in recruiting local workers, giving priority to policy-beneficiary groups and households displaced for industrial cluster development.
• Payment of fees: Enterprises must pay fees related to infrastructure use, public services, and other utilities as agreed with the infrastructure developer.

These rights and obligations are designed to ensure the efficient and sustainable operation of industrial clusters, while also supporting local economic development.

Industrial clusters in Vietnam are increasingly developing

Industrial cluster development in Vietnam: an overview

By 2025, Vietnam is expected to have 730 operational industrial clusters, covering a total area of 22,336 hectares across 57 provinces. However, 6 provinces still have no active clusters. A total of 955 clusters have had their detailed plans approved, and 644 clusters have had infrastructure investment projects approved with a total capital of over VND 115.2 trillion [9].

Key Challenges in Development:

• Slow Infrastructure Development: Especially in spontaneously formed clusters before 2009.
• Lack of Wastewater Treatment Systems: A significant number of clusters still do not have proper wastewater treatment infrastructure.
• Difficulties in Attracting Investment: Limited basic infrastructure and tight public budgets hinder investment attraction.

Northern region

The Northern region currently leads the country in both scale and growth rate of industrial clusters. According to plans for 2025, this area will form approximately 765 industrial clusters, with a total area estimated at 24,395.2 hectares. By the end of 2020, hundreds of clusters had been established and put into operation, many of which have infrastructure invested by private enterprises.

One standout locality is Bac Giang, with:

• 45 industrial clusters approved as of April 2022, covering about 1,734 ha
• Total infrastructure investment reaching 10,500 billion VND
• Among them, 31 clusters are officially operating with an average occupancy rate of 64.5%
• Attracted 230 projects, with total registered capital exceeding 32,765 billion VND
• Created jobs for more than 45,000 workers

Additionally, Bac Ninh has also been rising prominently. By 2022, it had 31 industrial clusters and 16 industrial parks with a total area of 3,697 ha, accounting for 11% of the province’s total land area. These industrial parks have attracted investment from 38 countries, mainly in processing and manufacturing industries, especially electronics. Bac Ninh benefits from a strategic location near Hanoi, as well as supportive policies that foster a favorable business environment.

Alongside continuous growth in other provinces, in 2023 Hai Phong further expanded investment opportunities by adding two new industrial clusters in the plan: Trang Due and Le Thien-Dai Ban clusters, totaling nearly 120 ha. These are ideal destinations for high-tech industries such as mechanical engineering, electronics, and supporting industries.

Industrial clusters are proving effective in many localities.

Central Region

The Central region ranks second nationwide in total industrial cluster area, with approximately 15,864.1 hectares. This area has a very high rate of state investment in infrastructure, specifically:

• 74.2% in the Central Coastal region
• 82.9% in the Central Highlands

Binh Dinh is a notable province with 46 industrial clusters covering 1,639 ha, among which 40 clusters have been or are currently undergoing land clearance and infrastructure investment. By 2025, the province aims for a 75-80% occupancy rate in operating clusters.

Industrial clusters in Binh Dinh have attracted 440 small and medium enterprises with a total registered capital of 1,230 billion VND and realized capital of 843 billion VND. Enterprises within these clusters contribute about 16% of the province’s total annual industrial output value and provide stable employment for around 11,000 local workers.

Southern Region

The total industrial cluster area in the South currently reaches about 14,586 ha, with most projects invested by the private sector. Specifically:

• 78.5% of clusters in the Southeast region

• 71.7% in the Mekong Delta region led by private investors

The industrial real estate market in this region is highly competitive, reflected by:

• An average occupancy rate of 90%

• Average land rental price of about 159 USD/m² per lease term

Industrial clusters in the South are becoming attractive destinations for domestic businesses, especially in processing agricultural, forestry, and aquatic products, as well as textiles.

Binh Duong plans to develop 4 supporting industrial clusters (each 75 ha), including one specializing in mechanical engineering, and also plans to expand the Bac Tan Uyen 1 industrial park. The province’s supporting industry still heavily relies on imported raw materials, with a low localization rate. Binh Duong currently has 2,277 enterprises related to supporting industries. To boost this sector, the province is accelerating business support, prioritizing the development of value-added products, completing raw material supply chain planning, and attracting new investments.

Conditions for Establishing and Expanding Industrial Clusters

According to Decree No. 32/2024/ND-CP, to establish or expand an industrial cluster, the following specific conditions must be met:

Conditions for Establishing an Industrial Cluster [10]:

• The industrial cluster must be included in the list of industrial clusters approved at the provincial level and have land funds suitable to the district-level land use planning.
• There must be an enterprise, cooperative, or organization with legal status and sufficient investment capacity to propose to be the infrastructure investor.
• In case the locality already has industrial clusters, the average occupancy rate must be above 50% or the area of industrial land not leased out must not exceed 100 hectares.

The application dossier for establishing an industrial cluster includes [2]:

• A proposal from the District People’s Committee.
• A request document from the infrastructure investor.
• Legal documents and financial capacity of the investor.
• Investment report and documents proving capacity.

Conditions for Expanding an Industrial Cluster [10]:

• The total area after expansion must not exceed 75 hectares and must have land funds suitable to the district-level land use planning.
• There must be a legal investor with sufficient capacity to invest in building technical infrastructure.
• The cluster must meet at least one of two criteria: either have an occupancy rate of 60% or higher, or the demand for leased land exceeds the current available area.
• Essential technical infrastructure works must have been completed and put into use, including internal roads, water supply systems, and wastewater collection and treatment systems (according to the approved detailed planning).

Frequently asked questions

Which is larger: industrial cluster or industrial park?

Industrial parks have a larger scale than industrial clusters because they are not specifically limited in area by law. Industrial clusters, on the other hand, are limited in size from 10 hectares up to a maximum of 75 hectares, except for special cases such as clusters in mountainous areas which can have a minimum size of 5 hectares.

What is the difference between industrial clusters and industrial parks?

Conclusion

In reality, industrial clusters have proven effective in many localities, especially in redistributing production, reducing pressure on large industrial parks, and supporting small and medium-sized enterprises. However, alongside these achievements, issues remain such as uneven occupancy rates, lack of regional linkage, and limited technical and environmental infrastructure. For industrial clusters to truly become a driver of sustainable development, specific supporting policies are needed, from planning to implementation, as well as promoting public-private partnerships in infrastructure investment and operational management.

References

[1] Nam. The nao la cum cong nghiep, khu cong nghiep? Su khac nhau giua khu cong nghiep voi cum cong nghiep la gi? Thuvienphapluat.vn. Published July 24, 2023. Accessed April 24, 2025. https://thuvienphapluat.vn/phap-luat/ho-tro-phap-luat/the-nao-la-cum-cong-nghiep-khu-cong-nghiep-su-khac-nhau-giua-khu-cong-nghiep-voi-cum-cong-nghiep-la-722960-96604.html

[2] Nam 2023, ca nuoc thanh lap 1.057 cum cong nghiep. Thuenhanuoc.vn. Published 2023. Accessed April 24, 2025. https://thuenhanuoc.vn/tapchi/chuyen-muc/doanh-nghiep-thi-truong/f7087e33-78db-44e8-adee-38c8218398a6

[3] Nghien cuu khoa hoc – Tap chi cong thuong. Den nam 2025 ca nuoc se co 1.704 cum cong nghiep. Tapchicongthuong.vn. Published 2025. Accessed April 24, 2025. https://moit.gov.vn/tin-tuc/phat-trien-cong-nghiep/dinh-huong-den-nam-2025-ca-nuoc-co-1.704-cum-cong-nghiep.html

[4] An NB. Ty le lap day cua cum cong nghiep la gi? Bao cao dau tu mo rong cum cong nghiep co bao gom noi dung ve ty le lap day cua cum cong nghiep khong? Thuvienphapluat.vn. Published June 10, 2024. Accessed April 28, 2025. https://thuvienphapluat.vn/phap-luat/ty-le-lap-day-cua-cum-cong-nghiep-la-gi-bao-cao-dau-tu-mo-rong-cum-cong-nghiep-co-bao-gom-noi-dung–297381-157198.html

[5] thuvienphapluat.vn. Nghi dinh 32/2024/ND-CP ve quan ly, phat trien cum cong nghiep. THU VIEN PHAP LUAT. Published January 10, 2025. Accessed April 28, 2025. https://thuvienphapluat.vn/van-ban/Thuong-mai/Nghi-dinh-32-2024-ND-CP-quan-ly-phat-trien-cum-cong-nghiep-300484.aspx

[6] Thu Vien Nha Dat. The nao la dien tich dat cong nghiep? Dien tich dat cong nghiep duoc dung voi muc dich gi theo Nghi dinh 32? Thu Vien Nha Dat. Published April 8, 2025. Accessed April 28, 2025. https://thuviennhadat.vn/phap-luat-doi-song/the-nao-la-dien-tich-dat-cong-nghiep-dien-tich-dat-cong-nghiep-duoc-dung-voi-muc-dich-gi-theo-nghi–12131-657294.html

[7] Dien tich xay dung he thong cong trinh ha tang ky thuat chung cua cum cong nghiep la gi? ThuVienPhapLuat.vn. Published June 3, 2017. Accessed April 28, 2025. https://thuvienphapluat.vn/hoi-dap-phap-luat/2DB6F-hd-dien-tich-xay-dung-he-thong-cong-trinh-ha-tang-ky-thuat-chung-cua-cum-cong-nghiep-la-gi.html

[8] Truong M. Cum cong nghiep la gi? Quy dinh ve cum cong nghiep. Cong ty Luat TNHH Minh Khue. Published December 13, 2022. Accessed April 24, 2025. https://luatminhkhue.vn/cum-cong-nghiep-la-gi

[9] Dinh huong den nam 2025 ca nuoc co 1.704 cum cong nghiep. moit.gov.vn. Published July 12, 2021. Accessed April 28, 2025. https://moit.gov.vn/tin-tuc/phat-trien-cong-nghiep/dinh-huong-den-nam-2025-ca-nuoc-co-1.704-cum-cong-nghiep.html

[10] baochinhphu.vn. Dieu kien thanh lap, mo rong cum cong nghiep. baochinhphu.vn. Published March 15, 2024. Accessed April 24, 2025. https://baochinhphu.vn/dieu-kien-thanh-lap-mo-rong-cum-cong-nghiep-102240315171827139.htm

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What is a factory?

Simply put, a factory is a location used for the purpose of producing and storing goods or operating to provide a certain service. This is where all the raw materials, human resources, equipment, … that a business needs are gathered. Depending on the business sector, the factory exists in different shapes and sizes [1,2].

For example, if company A sells children’s clothing, the factory of this company focuses on the stages of creating products. Including importing fabrics, processing raw materials, sewing clothes, dyeing, packaging, etc.

The factory is where the product manufacturing process takes place

Currently, there are many types of factories for businesses to choose from, but below are some of the most basic types of factories:

• Workshop combined with office: Is a model of production and management office arranged in the same space.
• Standard factory: Is an area designed and built to serve the production, assembly, processing and storage of goods.
• Factory with ecosystem: Is a production area with additional ecological elements such as trees, lakes, etc.

Related article: Top 7 Popular Types of Industrial Factories

Factory with green ecosystem

Notes when choosing to rent a factory

To determine which type of factory is suitable, business owners can rely on the following important criteria:

Business needs

Business owners should ask themselves what is required in a factory. For example, business owners need to determine mandatory factors such as light, water source, labor, and convenient traffic location. Non-essential factors can be flexible. Based on this information, business owners will easily find the desired factory location.

In addition, businesses need to answer some basic questions to find a convenient factory. Including what are the current resources of the business, how much capital is available, what is the position of the business in the market, etc. to choose a factory with reasonable costs.

Business owners should base on the criteria they most desire to choose the right type of factory

Infrastructure

If the infrastructure meets the standards, business owners can rest assured that the factory will operate stably and long-term without spending too much on upgrading, only needing periodic maintenance. On the contrary, if the infrastructure is temporary and of poor quality, the initial investment capital must be very high.

Because if not repaired, it can be dangerous for workers, affecting the profits of the business. Therefore, a factory must have at least full fire prevention and fighting equipment, ensure good ventilation and have a heat dissipation system.

Convenient location

An optimal factory should be located near the main roads of the province/city or seaport, airport. This creates favorable conditions for businesses in importing/exporting raw materials, goods, … and distributing products to consumers.

In addition, business owners can choose the location of the factory based on the requirements of goods production. For example, suppose the business item requires a large workforce, the factory should be located in a densely populated area

Optimal design

To save investment costs but still ensure effective business, business owners should choose an optimal factory design. For example, instead of choosing a factory with only one floor, business owners should consider using a multi-storey factory with a solid structure to take advantage of the existing land fund.

Multi-storey factory helps optimize limited land area

The factory area has a convenient internal road system

An ideal factory should have all the necessary elements such as lighting, electrical system, water system, ventilation and air ventilation, waste treatment capacity, etc. In addition, this production location must also create favorable and comfortable conditions for workers to work, achieving high efficiency.

Challenges when operating a factory

When wanting to operate a factory/a factory system by themselves, business owners may face unexpected challenges. Typical examples include:

Supply chain and raw material management

The better the raw materials, the more stable the supply chain, the higher the quality of the output products. This is a solid foundation if the business wants to be successful in the long term.

However, it is indeed very difficult for the production of goods to always meet this criterion. Therefore, business owners can only minimize this risk by choosing a reputable supplier with a good reputation.

Personnel and machinery management

In addition to factors related to supply chains and raw materials, business owners need to implement an effective personnel and machinery management system. Based on job requirements, businesses should select personnel with skills and adaptability, who can keep up with technology and rapid growth.

For machinery, instead of constantly chasing new technology, businesses should focus on choosing the most suitable options for their production needs. Regular maintenance is also essential to ensure smooth operation of equipment.

Effective personnel management is a mandatory criterion for optimal production

Issues of occupational safety and environmental protection

Occupational safety is an important criterion for sustainable business development, so environmental protection policies should be followed to ensure stable operations and compliance with the law.

Specifically, businesses should carefully calculate costs to purchase adequate equipment to ensure worker safety. Along with that, any process of processing raw materials or manufacturing products must have a waste treatment stage before releasing them into the environment [3].

New trends in manufacturing workshops

To keep up with the rapid pace of change in today’s market, businesses need to grasp some current trends in manufacturing workshops such as:

Rooftop solar power application

Rooftop solar power is a solution to provide green energy for production activities. In particular, manufacturing workshops will take advantage of high areas such as on the factory roof, which can receive the most light to generate solar energy.

Thanks to that, business owners can ensure that the production process is not interrupted, but still save maximum monthly costs.

Modern factory meeting international standards

The factory has a high-quality construction process, optimizes time and cost, operates sustainably, is stable for a long time and is committed to effective environmental protection.

These are all determined by standards such as ISO 9001, LEED (Leadership in Energy and Environmental Design), OSHA (Occupational Safety and Health Administration), GMP (Good Manufacturing Practice) & HACCP,…

Using smart construction materials

Instead of choosing concrete and steel as before, many factories have switched to using more flexible materials, such as self-healing concrete. The highlight of this material is that it has better expansion capacity than conventional concrete, so it is difficult to crack, break,… Thanks to that, periodic maintenance costs are significantly reduced.

KTG Industrial – Modern factory rental solutions

With more than 20 years of establishment and development, KTG Industrial has a clear awareness of the constant changes in the design and construction of factories at present. Therefore, the unit proactively changes the structure, construction materials, … to bring the most optimal, economical and sustainable solutions for businesses.

In addition, the unit also accepts to design and construct factories according to customer needs as well as meet international construction quality standards on quality, safety, ensuring customer completion results.

KTG Industrial specializes in providing smart, modern factory designs

Above is a detailed answer to questions about factories. In general, this structure can exist in many different forms to meet customer needs. Therefore, to choose the right type of factory for your needs and business, business owners should contact a unit specializing in providing industrial real estate and high-end, international-standard factories and warehouses for detailed instructions.

References

[1] Truong, M. (2023, December 2). Theo quy dinh thi xuong san xuat co duoc xem la dia diem kinh doanh hay khong? Retrieved April 25, 2025, from Cong ty Luat TNHH Minh Khue website: https://luatminhkhue.vn/theo-quy-dinh-thi-xuong-san-xuat-co-duoc-xem-la-dia-diem-kinh-doanh-hay-khong.aspx.

[2] Pham Thi Xuan Huong. (2023, November 30). Xuong san xuat la gi? Xuong san xuat co duoc xem la dia diem kinh doanh cua doanh nghiep hay khong? Retrieved April 25, 2025, from Thuvienphapluat.vn website: https://thuvienphapluat.vn/phap-luat/xuong-san-xuat-la-gi-xuong-san-xuat-co-duoc-xem-la-dia-diem-kinh-doanh-cua-doanh-nghiep-hay-khong-162450-127416.html.

[3] Quang, T. (2022, March 16). Bao ve moi truong doi voi khu san xuat va bao ve moi truong doi voi co so san xuat quy dinh nhu the nao? Viec tai che thuoc trach nhiem cua ai? Retrieved April 25, 2025, from Thuvienphapluat.vn website: https://thuvienphapluat.vn/phap-luat/bao-ve-moi-truong-doi-voi-khu-san-xuat-va-bao-ve-moi-truong-doi-voi-co-so-san-xuat-quy-dinh-nhu-the-1370.html.

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So, what exactly is an Export Processing Zone, how does it operate, and what specific benefits does it offer? In this article, KTG Industrial will provide a comprehensive overview of the definition, characteristics, roles, and key advantages of this specialized model.

What is an Export Processing Zone?

According to Clause 2, Article 2 of Decree 35/2022/ND-CP, an Export Processing Zone (EPZ) is a specialized type of industrial zone that focuses on the production of goods for export and the provision of supporting services related to export activities.

A distinguishing feature of EPZs is that they are physically separated from surrounding areas by a hard fence and operate under regulations similar to those applied in non-tariff zones. This setup is designed to facilitate the smooth flow of export and import activities.

Key characteristics of Export Processing Zones

Location and land area

One of the most notable features of Export Processing Zones (EPZs) is their strategic geographic location. These zones are typically planned near seaports, international airports, or major transportation corridors. This positioning is intended to optimize the flow of export goods, helping enterprises reduce both transit time and logistics costs.

In addition, EPZs often cover large-scale areas, ranging from several dozen to several hundred hectares (ha), providing sufficient space to meet the diverse requirements of various production models and business types.

Land within these zones is systematically planned, with clearly designated areas for factories, warehouses, administrative facilities, and technical infrastructure. This comprehensive zoning allows enterprises to operate efficiently from the initial development stages.

Moreover, the internal layout of an EPZ is designed to be flexible, enabling adjustments during different phases of growth or production scale expansion, thereby enhancing its attractiveness to both domestic and foreign investors.

Primary industries operating within Export Processing Zones

Within Export Processing Zones (EPZs), the primary industries are focused on the production of goods for export, such as rice, textiles and garments, and leather footwear. According to Article 62 of Decree 31/2021/ND-CP, investors are permitted to engage in a range of activities that support efficient manufacturing and business operations.

Specifically, investors can lease or purchase ready-built factories, offices, and warehouses; access existing technical infrastructure including electricity, water, transportation, telecommunications, and waste and wastewater treatment systems. In addition, investors have the right to transfer or sublease infrastructure-equipped land for the development of production facilities, re-lease physical assets, and participate in other legally permitted activities. This regulatory framework positions EPZs as a favorable environment that enables businesses to optimize costs while gaining easy access to essential support services.

Infrastructure and utilities in Export Processing Zones

Factory management in EPZs is greatly facilitated by comprehensive infrastructure planning that aligns with local conditions. These zones are typically equipped with essential components such as completed factory buildings, standardized warehouses, and an integrated logistics system.

Moreover, support amenities such as banking services, commercial centers, healthcare facilities, and educational institutions are often located within the zone. This creates a convenient setting for both production operations and employee well-being.

Under this model, factory operators do not need to make significant upfront investments in infrastructure. They can rapidly initiate operations and effectively utilize production space, thereby minimizing preparation time and optimizing initial capital expenditures.

Export Processing Zones are typically integrated with seamless logistic systems

Key benefits of Export Processing Zones

For businesses

Export Processing Zones (EPZs) offer a favorable investment environment for both domestic and foreign enterprises, thanks to well-developed technical infrastructure, streamlined administrative procedures, and attractive tax incentives. Specifically, enterprises operating in EPZs may benefit from a preferential corporate income tax rate of 10% for 15 years, with a full tax exemption for the first 4 years and a 50% tax reduction over the subsequent 9 years [1].

In addition, many EPZs adopt the on-site “single-window” model, which enables swift processing of procedures related to customs, legal compliance, and logistics right at the production location. This helps reduce operating time and costs significantly [2].

Operating in a centralized and enclosed environment also enables businesses to gain direct access to supply chains, supporting services, and a stable labor pool—factors that are particularly crucial for high-tech industries, electronics manufacturing, and supporting industries.

For the workforce

EPZs play a vital role in job creation and improving the livelihoods of millions of workers, especially younger labor forces from various provinces. As of the end of 2023, Ho Chi Minh City alone had over 250,000 workers employed in its EPZs and industrial parks [3].

Working in EPZs not only provides stable income but also exposes workers to a structured, professional work environment. Many enterprises within EPZs strictly comply with international standards for occupational safety, social welfare, and skill development.

In some zones, worker accommodations, daycare centers, clinics, and supermarkets are built within the premises—enhancing quality of life, reducing commuting stress, and lowering living expenses for workers.

Export Processing Zones also provide conditions for sustainable workforce development

Notable Export Processing Zones in Vietnam

Export Processing Zones (EPZs) in Vietnam play a key role in attracting foreign investment and advancing the export-oriented industrial sector. In Ho Chi Minh City, EPZs are primarily concentrated in the northeastern area, particularly in Thu Duc District. Currently, the city hosts four main operational export processing zones:

• Tan Thuan Export Processing Zone: Established in 1997, located in District 7, Ho Chi Minh City, with a total area of approximately 300 hectares. The zone has attracted over 254 investors from 22 countries, focusing on key sectors such as software, electronics, precision engineering, and traditional manufacturing.
• Linh Trung 1 Export Processing Zone: Situated in Linh Trung Ward, Thu Duc District, covering 62 hectares. Founded in 1992, this zone specializes in light industrial production, including product assembly and machinery manufacturing. Its proximity to Cat Lai Port and Tan Son Nhat Airport provides strategic advantages for export operations.
• Linh Trung 2 Export Processing Zone: Located about 7 km from Linh Trung 1, in Binh Chieu Ward, Thu Duc District, with a land area of 61.7 hectares. Operational since 2000, this zone has drawn numerous enterprises in electronics, mechanical engineering, and packaging industries.
• Linh Trung 3 Export Processing Zone: Located in An Tinh Commune, Trang Bang District, Tay Ninh Province, with an area exceeding 200 hectares. Developed in 2004, the zone primarily serves businesses in machinery manufacturing, electronics, chemicals, and food processing.

Overall, these EPZs contribute significantly to Ho Chi Minh City’s export revenue while generating tens of thousands of jobs, playing an essential role in driving local economic growth.

Linh Trung 2 Export Processing Zone – Ho Chi Minh City

The Importance of Export Processing Zones in the economy

Since the establishment of the Export Processing Zones (EPZs) model in Vietnam in the early 1990s, these zones have quickly become a strategic link in the country’s industrialization and modernization process.

EPZs are not only hubs for producing goods for export but also ideal destinations for foreign direct investment (FDI), particularly in high-value-added sectors such as electronics, textiles, and food processing.

Financially, EPZs contribute significantly to the national budget. As of June 2024, there are 1,715 investment projects in the EPZs and industrial zones (IZs) in Ho Chi Minh City. Among these, 561 are FDI projects with a total registered investment capital of 7.269 billion USD, and 1,154 are domestic investment projects with a capital of 6.326 billion USD [4].

In addition to generating significant revenue, EPZs serve as a catalyst for regional economic development. The presence of large enterprises has led to more synchronized investments in infrastructure such as transportation, electricity, water, and telecommunications in the surrounding areas, creating a modern industrial ecosystem and spreading benefits to supporting industries, services, and local communities.

In particular, EPZs play an essential role as key “export gateways,” helping to enhance the international competitiveness of Vietnamese goods. This underscores the irreplaceable role of EPZs in expanding markets, accessing global supply chains, and boosting Vietnam’s position on the global trade map.

Export Processing Zones contribute significantly to the development of the country’s infrastructure

Some related questions

Are Export Processing Zones and industrial zones the same?

Although both are areas that gather manufacturing enterprises, Export Processing Zones (EPZs) and Industrial Zones (IZs) differ significantly in terms of development orientation, operational sectors, and management mechanisms.

An IZ is a designated geographical area primarily focused on industrial production and providing production support services. Meanwhile, an EPZ is a specialized model that concentrates on the production of export goods and related export services.

Regarding investment attraction, IZs target both domestic and foreign enterprises, whereas EPZs are primarily intended for foreign investors. The boundaries of IZs are usually more flexible, while EPZs are strictly managed under the duty-free zone mechanism.

The operational sectors in IZs are quite diverse, ranging from building materials, mechanical engineering to logistics services, whereas EPZs mainly produce export goods such as textiles, footwear, and agricultural products. The market for IZs spans both domestic and international markets, while EPZs focus exclusively on exports.

In conclusion, despite some similarities, these two models are clearly differentiated in terms of function, target investors, and target markets.

According to current regulations, are Export Processing Zones considered separate customs areas?

According to current regulations, Export Processing Zones (EPZs) are considered separate customs areas and are subject to corresponding regulations, except in the case specified in Clause 4, Article 26 of Decree 35/2022/ND-CP. Specifically, export enterprises are permitted to sell or liquidate used assets and goods in accordance with legal regulations in the domestic market.

During this process, import-export management policies will not apply, unless the goods require specialized inspection that was not carried out during importation, or goods requiring an import license must be approved by the competent authority in writing. Thus, EPZs are generally still considered separate customs areas, except for the special cases mentioned above.

Conclusion

It can be seen that Export Processing Zones play a crucial role in attracting foreign investment, boosting exports, and enhancing the industrial production capacity of Vietnam.

With their unique operating mechanisms, investment incentives, and market orientation, EPZs not only create a favorable environment for businesses but also contribute to promoting sustainable economic growth. Understanding this model will provide investors and businesses with a solid foundation for selecting the right direction in the current context of deeper integration.

Reference

[1] Investment Incentive Policy. Ho Chi Minh City Export Processing and Indutrial Zones Authority. Retrieved April 24, 2025 from https://hepza.hochiminhcity.gov.vn/en/eg/chinh-sach-uu-dai-dau-tu

[2] Ly Tuan (2020). Co che quan ly “mot cua tai cho” yeu to quan trong gop phan phat trien các khu che xuat, khu cong nghiep. Tap chi Nha dau tu. Retrieved April 24, 2025 from https://nhadautu.vn/co-che-quan-ly-mot-cua-tai-cho-yeu-to-quan-trong-gop-phan-phat-trien-cac-khu-che-xuat-khu-cong-nghiep-d45334.html

[3] Minh Tuyet (2014). Ban Quan ly Toa nha FLC Landmark ban giao “so hong” cho cu dan. Tap chi Kinh te va Du bao. Retrieved April 24, 2025 from https://kinhtevadubao.vn/ban-quan-ly-cac-kcx-va-cn-tp-ho-chi-minh-phat-huy-vai-tro-dau-tau-thuc-day-cac-kcn-kcx-tro-thanh-dong-luc-phat-trien-kinh-te-tp-ho-chi-minh-30917.htm

[4] L. Hoang (2024). Von FDI vao khu che xuat, khu cong nghiep tai TPHCM tang gap doi. Tap chi Kinh te Sai Gon. Retrieved April 24, 2025 from https://thesaigontimes.vn/von-fdi-vao-khu-che-xuat-khu-cong-nghiep-tai-tphcm-tang-gap-doi/

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What are the advantages of small factory designs?

In today’s climate where businesses are focusing on operational efficiency and cost optimization, small factory models are becoming a top choice due to a host of advantages in construction time, investment costs, and flexible usage. Specific benefits include:

Fast construction time:

With their small scale, these factories are quick to build, allowing for faster project completion and earlier operation. This benefits both contractors and businesses, enabling quick startup of production or rental activities.

Cost savings:

Small factories help reduce construction, land rental, and maintenance costs. For businesses leasing the space, smaller areas often translate to lower rental fees and optimized maintenance and renovation expenses.

Optimized functionality:

These factories can be used for multiple purposes such as storage, manufacturing, or material handling. Their flexible layouts allow companies to easily adjust production setup according to their operational phase.

In summary, with their efficiency, affordability, and high adaptability, small factory designs are an ideal solution for small to medium-sized enterprises seeking practical and sustainable industrial spaces.

Modern factory designs are increasingly favored by businesses.

16 beautiful small factory designs to suit business needs

100m² small factory design

The 100m² small factory model is highly favored by small and medium-sized enterprises for business purposes. This design requires a modest investment and offers fast construction time. It stands out for its ease of expansion, renovation, and maintenance, while still ensuring durability and functional flexibility. This factory size effectively supports production and storage needs within limited space.

The 100m² factory is ideal for small businesses.

200m² small factory design

A 200m² factory is suitable for small businesses looking for a flexible space to use as storage, a temporary office, or parking. With a moderate size, the construction cost remains affordable and implementation is simple, making it budget-friendly. The design allows businesses to optimize utility while maintaining operational efficiency.

The 200m² factory is very suitable for storage use.

300m² Small Factory Design

For businesses in need of a neat and efficient space for manufacturing or warehousing, the 300m² factory is an optimal solution. It features a sturdy structure, high load-bearing capacity, and quick construction. This factory not only ensures smooth operations but also provides flexibility for future expansion.

The 300m² factory is easy to scale up when needed.

500m² small factory design

A 500m² factory offers a balance between investment cost and functional performance. The area is sufficient for equipment setup, product storage, or small-scale production, while still being easy to manage and operate. Thanks to its solid structure and airy design, this model meets the practical needs of modern businesses.

The 500m² factory is easy to manage and operate.

600m² small factory design

With a solid structure and reasonable construction costs, the 600m² small factory is an ideal choice for small and medium-sized businesses, meeting both production and storage needs. This model optimizes space and is suitable for activities such as equipment manufacturing, raw material storage, or warehousing, helping improve work efficiency and reduce expenses.

A 600m² factory can be used for both production and storage.

800m² small factory design

Suitable for businesses needing space for production or storage, the 800m² small factory offers a moderate scale and flexibility in usage. The space can be easily adjusted between production and storage, meeting various operational needs. The use of pre-engineered steel enhances durability while reducing construction costs, allowing for future growth and expansion.

The 800m² factory uses pre-engineered steel for added durability and lower costs.

1000m² small factory design

The 1000m² area provides flexibility for small and medium-sized businesses in arranging production, storing goods, or even integrating office space. A sturdy steel frame shortens construction time while ensuring long-term durability. This model also adapts easily to changes or expansion, making it suitable for diverse industries.

A 1000m² factory can integrate both production and office spaces.

1200m² small factory design

With a 1200m² area, this factory model offers flexible space solutions that effectively meet both production and storage needs of small and medium-sized businesses. The foundation and flooring can be customized for different purposes, while the steel structure ensures strength, aesthetic appeal, and long-lasting safety.

The 1200m² factory offers customizable usage options.

1500m² small factory design

The 1500m² factory model is suitable for medium to large businesses requiring space for warehousing, manufacturing, or export processing zones. With a large area, the facility must be optimally designed and equipped with electrical, water, fire safety, and waste treatment systems.

The 1500m² factory is ideal for medium to large businesses.

1800m² small factory design

With ample space, the 1800m² factory can accommodate high-capacity machinery and large-scale production equipment. Its flexible design makes it easy to adjust functions when needed. This model is also well-suited for future upgrades, renovations, or expansions, supporting long-term development.

The 1800m² factory supports long-term growth effectively.

Beautiful small factory design with many windows

This factory model is designed with numerous windows on all four sides, ensuring a well-ventilated space with maximum natural light. It is an energy-efficient solution that creates a comfortable and pleasant working environment.

 

A factory with many windows creates a more comfortable workspace.

Small pre-engineered factory design

This pre-engineered small factory is built with a solid steel frame that offers high load-bearing capacity and excellent resistance to environmental impacts. With a simple design and fast construction time, it has become a popular choice for businesses needing storage or manufacturing space. Its high industrialization and durability are standout features.

The pre-engineered small factory has a solid and durable structure.

Small factory design with corrugated metal roof

Two common types of metal-roofed factories today include concrete-wall with metal roof and steel-frame with metal roof models:

• Concrete-wall with metal roof: Concrete walls about 2.5 meters high combined with a metal roof offer high durability and minimize deterioration.
• Steel-frame with metal roof: Uses double-coated anti-rust steel frames, connected by screws and welded joints. The metal roof is lightweight, easy to install, cost-effective, and low-maintenance. It offers quick construction, high durability, easy upgrades, and is environmentally friendly.

Small factories with metal roofs are currently very popular.

Small factory with transparent roof panels

This design features a transparent roof that maximizes natural light, reduces electricity usage, and creates a bright, airy interior. It is especially suited for certain specialized industries.

Advantages include:

• Simple design and quick construction
• Lower building costs compared to traditional reinforced concrete
• Strong, long-lasting roof and wall structures
• Needs additional systems for fire protection, insulation, and soundproofing to ensure safe and effective operation

The transparent-roof factory design maximizes natural lighting.

Single-story factory design

The single-story factory model is widely used today, especially in heavy industry. These buildings typically have heights ranging from 4–7 meters, wide spans around 12 meters, and flexible roof styles such as sloped or arched roofs.

To optimize space, this design often includes mezzanines (decking or reinforced concrete) for extra storage or office areas. Lightweight materials are commonly used for fast installation and flexible operation.

The single-story factory has a simple design and low construction cost.

Two-story factory design

Multi-story factories, especially two-story ones, are an ideal solution for businesses working with limited land. Dividing production, storage, and office spaces by floors allows for maximum utilization of available area.

Advantages include:

• Space-saving: Efficient layout of functional areas without expanding the land footprint
• Cost-saving: Reduced land purchase/rental costs compared to horizontal expansion
• Land optimization: Increased usable area without extending the building’s base
• Fast construction: Especially with pre-engineered steel, thanks to prefabricated and on-site assembled components
• Multi-functionality: When properly engineered, multi-story factories are durable, high-load, and operationally efficient
• Enhanced operations: Easy internal movement and logical production line layout
• Sustainability: Supports green solutions and reduces environmental impact
• Increased asset value: Modern design adds commercial value

However, because the upper floor typically bears less load than the ground floor, it requires careful structural planning and solid reinforced concrete systems, leading to higher construction costs than standard single-story models.

Two-story factories help businesses optimize land use efficiently.

Steps to design a beautiful small factory

Step 1: Prepare design drawings and construction documents

The initial phase includes basic design and detailed construction drawings:

– Basic Design: Provides an overview of the construction site location, layout, proposed structural framework, technical systems, fire protection plans, and environmental solutions.

• Basic design explanation includes:

• • General information about the construction site, layout, scale, and project components.
  • Structural design plans, technical infrastructure systems, environmental and fire safety solutions.
  • Connection solutions between different components and existing technical systems.

• Basic technical drawings include:

• • General layout of the factory.
  • Drawings of the main structure and technical infrastructure.
  • If aesthetics are required, architectural drawings of the factory should also be included.

– Construction Drawings: These include all technical specifications, structural details, and suitable materials, complying with construction standards. These documents serve as the basis for accurate and efficient construction.

Step 2: Construct the foundation system

The foundation is the primary load-bearing part of the entire building, ensuring long-term safety and stability:

– Reinforced concrete is used as the main construction material.

– A thorough geotechnical survey of the area is required to select a suitable foundation solution.

– Construction must strictly follow technical drawings to avoid future settlement or cracking.

Step 3: Erect the main steel frame and supporting components

The steel frame is the main load-bearing structure, designed for fast and precise installation:

– Includes columns, trusses, purlins, and bracing systems – pre-fabricated and assembled on site.

– Supporting components such as corrugated iron roofing, wall panels, and ventilation louvers are installed simultaneously.

– It is crucial to ensure precise alignment during assembly to avoid structural imbalance or misalignment.

Step 4: Install technical systems: electricity, water, fire protection, ventilation, etc.

Once the steel frame is completed, the next step is to install technical systems:

– Electrical: Install energy-saving LED lights, central electrical cabinets, sockets, and wiring.

– Water: Install plumbing systems for restrooms, washing areas, and production zones.

– Fire Protection: Equip with fire extinguishers, fire hoses, and automatic fire alarm systems.

– Ventilation: Install exhaust fans, windows, or ridge ventilation louvers.

Step 5: Final cleaning, quality inspection, and project handover

This is the final step before putting the factory into operation:

– Final cleaning: Thoroughly clean the entire site, removing all waste and leftover materials.

– Quality inspection: Cross-check construction elements with the design, evaluate workmanship and quality for each part.

– Project handover: Conduct the final acceptance and handover with participation from the investor, contractor, supervising unit, and relevant authorities (if required).

KTG Industrial – Solutions for factory leasing and custom-built construction

KTG Industrial boasts a highly experienced team of specialists.

KTG Industrial is a joint venture between Khải Toàn Group (Vietnam) and Boustead Projects (Singapore), forming the strategic alliance BKIM. Combining international standards with deep local market understanding, KTG Industrial delivers high-quality pre-built factories and warehouses, as well as tailored construction services with optimized designs and professional execution for both domestic and international businesses.

KTG Industrial offers ready-built factories, modern warehouses, and Built-To-Suit (BTS) design-build services, strategically located in key industrial zones such as Đồng Nai and Bắc Ninh. All facilities meet international standards for safety, quality, and sustainability. Projects are integrated with solar energy systems, energy-saving materials, and ESG (Environmental, Social, Governance) solutions throughout.

KTG Industrial is committed to partnering with businesses through transparency, reliability, and social responsibility. As an ideal partner for enterprises seeking high-quality industrial spaces in Vietnam, KTG Industrial not only provides efficient spaces for production and storage, but also contributes to enhancing Vietnam’s industrial and logistics value chain.

Conclusion

Choosing the right factory model not only helps businesses save on initial investment costs but also ensures long-term operational efficiency. With the 16 beautiful and intelligent small factory designs suggested above, we hope you find a layout that aligns with your development goals.

The post 16 beautiful small factory designs to suit business needs appeared first on .

Explore these outstanding projects and discover the industrial workshop solutions that KTG Industrial is delivering in Long Thanh’s high-potential market.

6 Factories in Long Thanh: Diverse Industries, Vast Potential

Long Thanh, situated in Dong Nai province, has long established its position as one of Vietnam’s key industrial hubs. This area boasts numerous modern and well-planned industrial parks.

This development has attracted the presence of many companies with active factories across a wide range of sectors, from mechanics and electronics to textiles and food. This industry diversity creates a unique appeal for the region.

BOSCH Vietnam Co., Ltd.

The factory of BOSCH Vietnam Co., Ltd., located in Dong Nai province, is a modern and significant production facility of this European-based corporation. Starting with just over 10 people in 2008, the factory has grown strongly, creating jobs for more than 1,800 employees to date.

Operating with 22 production lines, the BOSCH Dong Nai factory achieves an average annual output of approximately 5 million products (drive belts). The majority of these products, with a total of over 50 million units produced, serve export markets in the Asia-Pacific region and North America.

With continuous improvement efforts, the factory has upgraded the electrical system for 3 assembly cabins. This project has a scale of 7,800 m² and is implemented in strict compliance with BOSCH’s stringent internal safety regulations.

The upgrade includes the installation of high-tech equipment such as imported HV medium-voltage switchgear connected to the existing system, an integrated transformer substation, and a busway system.

Read more: Navigating green factories and ESG challenges in Vietnam

Kingfa Science & Technology Co., Ltd.

Kingfa Science & Technology Co., Ltd. is part of the global development strategy of the Kingfa Group. The parent group is the largest compound plastic manufacturer in China, specializing in the research, development, and trading of new chemical materials.

Kingfa Vietnam’s factory is located in the AMATA High-Tech Industrial Park in Long Thanh, Dong Nai province. This is a large-scale project, built on a land area of 14.4 hectares.

Kingfa Vietnam has set ambitious development goals for the near future. By 2025, the company expects to reach a sales output of 170,000 tons and increase its total workforce to over 1,000 employees, contributing to the new materials industry in Vietnam.

Freudenberg Performance Materials Apparel

Freudenberg Performance Materials Apparel, a division of the leading German Freudenberg Group, has inaugurated and put into operation a modern thermal insulation materials production plant. This advanced production facility is located in Long Thanh district, Dong Nai province, and officially started production in July 2024.

The Long Thanh plant specializes in manufacturing the comfortemp® product line, a high-performance thermal insulation material widely used in the fashion and sportswear industries. Notably, the plant is equipped to produce sustainable thermal insulation materials, aligning with the green production goals of many garment partners.

This is Freudenberg’s first production facility in Vietnam, marking a significant step in its strategy to meet the growing demand of the garment industry in Southeast Asia and South Asia.

The presence of the new plant in Long Thanh not only expands Freudenberg’s thermal insulation material production network in Asia (along with China and South Korea) but also strengthens the group’s global competitiveness.

Thien Long Group Corporation

The Thien Long Long Thanh factory, a significant member of the Thien Long Group Corporation, officially commenced operations in August 2008. Located in the Long Thanh Industrial Park, Dong Nai province, the factory was initially built on a 3-hectare campus.

In November 2022, Thien Long Group invested approximately VND 230 billion to inaugurate and put into use the new B2 workshop, within the premises of the Thien Long Long Thanh factory. Workshop B2 has a solid 5-story reinforced concrete structure with a usable area of nearly 10,000 m² and a floor load capacity of over 1,000 kg/m².

The addition of the B2 workshop not only increases the total area of the entire factory to 28,450 m² but also helps to increase the maximum capacity to 739 million products per year.

The new workshop also supports Thien Long’s product diversification strategy, focusing on producing additional product groups such as adhesives, educational tools, fine art supplies, and especially STEAM & DIY products, while applying automation and energy-saving technologies along with advanced management systems such as ISO 9001 and SAP HANA/S4.

Elite Long Thanh Co., Ltd.

Elite Long Thanh Co., Ltd., a member of the TMI Group, officially commenced operations of the group’s fourth factory in Long Thanh in March 2017. The facility is located at Lot D, Loc An – Binh Son Industrial Park, Long Thanh District, Dong Nai Province. This large-scale manufacturing plant is built on a land area of approximately 100,000 square meters.

The company’s core business is garment manufacturing, with a high degree of specialization in sportswear. Elite Long Thanh takes pride in being a trusted manufacturing partner for a number of globally recognized sports fashion brands, including Adidas, Nike, Puma, Hugo Boss, and Tory Burch.

In addition to its main garment manufacturing operations, the company is also involved in fabric finishing and textile processing. Meeting the stringent standards of top international brands has further affirmed the production capability and product quality of the Elite Long Thanh factory.

Sealing Solutions Company

Trelleborg Sealing Solutions, a global leader in sealing solutions, officially began operating its first production plant in Vietnam on November 28, 2023. This advanced production facility covers an area of 8,000 m² and is located in the Loc An – Binh Son Industrial Park, Long Thanh district, Dong Nai province.

The Long Thanh plant specializes in manufacturing high-precision sealing products, including O-rings, plate heat exchanger gaskets, and custom-designed molded parts from elastomers. To ensure quality, the plant utilizes the latest compression and injection molding technologies along with an automated final inspection system.

The factory was built with a multi-million dollar investment, focusing on quality, efficiency, and especially sustainability. Notable sustainable solutions include a building insulation system, the installation of solar panels to generate renewable energy, a wastewater treatment and exhaust gas filtration system before discharge into the environment, and the optimization of reusable material usage.

Read more: 7 Notable factories in Bac Ninh, Vietnam – FDI highlights

KTG Industrial – Solutions for factories in Long Thanh

In addition to businesses that build their own production facilities, KTG Industrial provides modern and flexible long thanh factory rental solutions through ready-built factories and warehouses.

The company’s presence in this strategic industrial area is reflected in flagship developments such as KTG Industrial An Phuoc.

The “Green Factory” model is a strategic direction that KTG Industrial is actively pursuing in the industrial real estate sector, with the first representative being the “Industry 4.0 Technology Factory Generation”.

This concept embodies the creation of ready-built factories and warehouses that are not only smart thanks to the integration of Industry 4.0 technology but also environmentally friendly, through the application of green principles and solutions from the design and construction stages to operation, such as the installation of rooftop solar power systems and compliance with international green building standards.

KTG Industrial’s core green objective is to pioneer the development of sustainable industrial parks, minimizing environmental impact and optimizing resource efficiency.

The company demonstrates a strong commitment by pursuing LEED certification for its projects, focusing on energy saving, increasing the use of renewable energy, improving water efficiency, reducing emissions, and creating a green and safe working environment, contributing to overall sustainable development.

Conclusion

The presence of six major factories in Long Thanh not only demonstrates strong investment appeal but also affirms the strategic role of this area on Vietnam’s industrial map. With a diverse range of industries—from mechanical engineering, electronics, and chemicals to textiles and food processing—Long Thanh is emerging as a key development hub for both domestic and international enterprises.

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The trend of developing multi-storey factories in Vietnam

The rapid increase in demand for manufacturing, e-commerce, and logistics services is putting significant pressure on the industrial land supply in Vietnam. Finding suitable spaces is becoming increasingly difficult, not only because of limited availability but also due to escalating rental prices.

According to CBRE Vietnam, in 2024, the industrial land absorption in the southern region is expected to reach only 265 hectares, a 52% decrease compared to 2023, due to the limited land supply in key markets. The average rental price in southern industrial zones has also reached 175 USD/m² for the remaining lease term, marking a 1.4% increase compared to last year.

In this context, multi-storey factories have emerged as a strategic solution, enabling businesses to optimize vertical space usage rather than extending across large areas. This model is not only suitable for industries requiring extensive storage space but is also particularly effective in the context of urbanization. As a result, the distance from production centers to consumption markets is shortened, leading to significant savings in operational costs.

Currently, multi-storey factories are being widely implemented in key industrial areas such as Ho Chi Minh City, Dong Nai, Binh Duong, Long An, Hai Duong, and Bac Ninh—regions that host many export processing zones, industrial parks, and large-scale manufacturing plants. These areas benefit from well-developed transportation infrastructure, offering convenient connections to seaports, airports, and distribution centers, making them ideal locations for maximizing the effectiveness of this model.

What are the prospects for multi-storey factories?

The rise of multi-storey factories is not just a trend; it is gradually becoming an essential part of the industrial and logistics development strategy in Vietnam. At least three core factors are driving the acceleration of this model: The issue of urban land availability, the rapid growth of e-commerce, and the increasingly modernized transportation and industrial infrastructure.

Urban land is becoming increasingly scarce

In major cities and key industrial areas such as Ho Chi Minh City, Hanoi, and Binh Duong, the rapid pace of urbanization is shrinking the land available for industrial use. Available land is becoming more limited, while rental costs continue to rise, forcing businesses to reconsider how to use space more efficiently. As a practical response to this need, multi-storey factories with the ability to expand vertically have emerged as an optimal solution, allowing for space savings while maintaining operational capacity.

Urbanization is one of the key factors leading to the increasing limitation of industrial land

Read more: Top 7 popular types of industrial factories 

E-commerce boom

According to the Ministry of Industry and Trade’s report, in the first nine months of 2024, the total revenue from e-commerce reached over 227 trillion VND, a nearly 38% increase compared to the same period last year. Q3 2024 recorded a revenue of 84.75 trillion VND, contributing 37% to the total annual revenue.

The rapid growth of e-commerce in Vietnam has led to an increased demand for high-speed, large-scale storage, processing, and distribution of goods. Logistics companies require warehouse models located near consumer centers, while also offering flexibility in dividing, transferring, and delivering orders.

Multi-storey warehouses meet these needs well, especially when integrated with automation technologies and smart management. This model not only shortens delivery times but also becomes a crucial competitive advantage in the “same-day delivery” trend.

Furthermore, effectively utilizing space and location helps businesses optimize operational costs, particularly as land near residential areas becomes increasingly scarce and transportation costs account for up to 50% of total logistics expenses.

Related article: Factory Leasing Cost in Southeast Asia: Latest Updates

Modern infrastructure and technology

Investments in infrastructure and the application of technology are playing a key role in creating favorable conditions for the development of multi-storey warehouses in Vietnam. Currently, the highway network continues to expand, with approximately 1,188 km expected to be completed by 2025.

Notable highway projects include the 49 km Bung – Van Ninh section passing through Quang Binh (Central region), and the 83 km Van Phong – Nha Trang expressway in Khánh Hòa (South Central Coastal region). These routes enhance connectivity between industrial zones and seaports and airports, facilitating smoother goods transportation.

Additionally, highways connecting international airports and seaports are forming new economic zones, driving the development of logistics. A prime example is the nearly 300 km Hanoi – Mong Cai expressway, with almost two-thirds of the route running through Quang Ninh. This highway connects industrial zones, cities, three international airports (Noi Bai, Cat Bi, Van Don), and seaports such as Cai Lan and Lach Huyen, helping to expand large-scale economic zones in the North.

Alongside infrastructure development, multi-storey warehouse models are being increasingly supported. Many systems, including goods lifts, ramps, and conveyor systems, are being equipped to optimize operational processes and meet storage demands. Furthermore, modern fire protection technology, such as rescue ladders and emergency evacuation systems for high-rise buildings, is being implemented to ensure worker safety.

3 Notable multi-storey factory projects in 2025

Long Hau multi-storey factory – Long An

The Long Hau multi-storey factory is located in the Long Hau Industrial Park, Long An Province. This project offers flexible leasing solutions, with areas ranging from 100 to 3,300 m², and rental rates that are 10-15% lower than traditional low-rise factory models.

Strategically situated near Ho Chi Minh City, with convenient transportation connections to key routes such as Nguyen Huu Tho, the Ben Luc – Long Thanh expressway, and the seaport and airport systems, this location helps reduce transportation costs and optimize logistics processes.

Long Hau multi-storey factory – Long An

High-rise factory lot 100 – Ho Chi Minh City

The High-rise factory lot 100, located within Linh Trung I Export Processing Zone in Ho Chi Minh City, is a modern facility featuring eight floors of factory space with a total construction area of 24,841.6 square meters. Each floor offers 2,790.5 square meters, with floor load capacities ranging from 600 kg/m2 to 1,000 kg/m2 depending on the level, effectively accommodating diverse production needs.

The facility is strategically positioned, just 16 kilometers from the center of Ho Chi Minh City and in close proximity to key infrastructure points, including Tan Son Nhat Airport (13 kilometers), Cat Lai Port (11 kilometers), and Saigon Hi-Tech Park (3 kilometers). It benefits from a well-connected transportation network and flood-free terrain.

High-rise factory lot 100 – Ho Chi Minh City

KTG Industrial Nhon Trach 2 – Phase 4 (two-story factory)

KTG Industrial Nhon Trach 2 (Phase 4)

KTG Industrial Nhon Trach 2 (Phase 4) is the latest expansion of the modern industrial zone in Nhon Trach, distinguished by its efficient two-story factory model that maximizes space utilization. The project spans a land area of 18.69 hectares and is being developed in four phases, with the first two phases already completed and nearly fully occupied.

Strategically located approximately 35 kilometers from the center of Ho Chi Minh City, the project offers rapid connectivity to major urban areas and key transportation infrastructure. With abundant labor resources from neighboring areas such as Thu Duc City, District 2, and Bien Hoa, KTG Industrial Nhon Trach 2 (Phase 4) stands out as an ideal choice for businesses seeking a modern production facility.

What are the differences between warehouses and high-rise factories?

While differing in function, both warehouses and high-rise factories share numerous common advantages, aligning well with Vietnam’s rapid urbanization and the trend toward sustainable industrial development. First, vertical construction allows these facilities to be located closer to urban centers—areas with high consumer density and well-developed transportation networks. As a result, businesses can significantly shorten delivery times and reduce logistics costs.

Secondly, a key shared feature of high-rise warehouses and factories is the optimized and flexible space layout. This enables businesses to easily arrange storage, production, or office areas according to their specific operational needs. Notably, this model is particularly well-suited to light and clean industries such as electronics, packaged food, cosmetics, and pharmaceuticals.

Moreover, the reduced land footprint helps minimize environmental impact, conserve energy by shortening operational supply chains, and improve infrastructure utilization efficiency. Collectively, these factors contribute to enhanced cost-effectiveness and promote a greener, more sustainable path for industrial development.

High-Rise Factories

High-rise factories are a production facility model designed to maximize vertical space usage, rather than spreading horizontally like traditional factories. This model typically features multiple floors, with each level capable of serving different production functions or being shared among various businesses. High-rise factories are commonly found in densely populated urban areas and industrial zones.

With a modern and flexible design, high-rise factories offer numerous outstanding advantages. This model optimizes space utilization, enhances operational efficiency, and helps reduce costs.

In addition, integrated security systems ensure the safety of production activities, while internal transportation networks, maintenance services, and technical support further contribute to the operational efficiency of high-rise factories.

High-rise factories model is regarded as one of the most effective solutions for many businesses

High-Rise Warehouses

High-rise warehouses are storage facility models designed to maximize vertical space utilization, similar to high-rise factories. With advancements in technology and the growing demand for goods storage, high-rise warehouses have become an ideal solution for optimizing space and improving inventory management efficiency.

These facilities offer substantial storage capacity, allowing businesses to store vast quantities of goods without occupying extensive land areas. This helps companies save on rental costs and optimize land use. Additionally, high-rise warehouses streamline material handling processes—from receiving and sorting to transporting goods—thanks to smart storage systems and automated support equipment.

A major advantage of high-rise warehouses is the integration of logistics solutions, enabling businesses to manage and operate their storage facilities more efficiently. Systems such as inventory management, inbound and outbound control, and automated forklift operations can all be incorporated within these spaces, ensuring greater accuracy and speed in goods distribution.

As industrial land availability continues to shrink, high-rise warehouses present an effective solution for maximizing land resources

Conclusion

The trend of developing high-rise factories in Vietnam is emerging as an optimal solution to address the challenges of limited land availability and the increasing demand from industrial sectors, e-commerce, and logistics. Driven by the strong development of transportation infrastructure, advancements in technology, and the need to enhance operational efficiency, high-rise factory models not only save space but also optimize costs and strengthen the competitiveness of businesses. Built on solid foundations and strategically located, high-rise factories are poised to remain a preferred choice for enterprises shortly, contributing to the sustainable growth of Vietnam’s economy.

Reference

1. Ministry of Industry and Trade of Vietnam (2025). Thuong mai dien tu Viet Nam nam 2024: Nhung buoc tien va thach thuc. Retrieved April 14, 2025 from: https://moit.gov.vn/khoa-hoc-va-cong-nghe/thuong-mai-dien-tu-viet-nam-nam-2024-nhung-buoc-tien-va-thach-thuc.htm
2. Tien Si, Thu Ha, Kim Cuong (2025). Vuot kho dua cac cong trinh giao thong trong diem ve dich trong nam 2025. Nhan Dan Newspaper. Retrieved April 14, 2025 from: https://nhandan.vn/vuot-kho-dua-cac-cong-trinh-giao-thong-trong-diem-ve-dich-trong-nam-2025-post871956.html
3. Minh Tien (2025). Truc cao toc noi 3 san bay, KCN, cang bien, tao vung phat trien moi co dien tich gap 3 lan Ha Noi, 5 lan TP.HCM, 8 lan Da Nang. To quoc Newspaper. Retrieved April 14, 2025 from:https://nhipsongkinhte.toquoc.vn/truc-cao-toc-noi-3-san-bay-kcn-cang-bien-tao-vung-phat-trien-moi-co-dien-tich-gap-3-lan-ha-noi-5-lan-tphcm-8-lan-da-nang-20250310155130748.htm 

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Legal basis for factory completion procedures

To ensure compliance, businesses must refer to and follow these key legal documents:

• Law on Construction 2014
• Law amending and supplementing certain provisions of the Construction Law 2020
• Decree No. 06/2021/ND-CP: Detailing regulations on construction quality control, execution, and maintenance
• Decree No. 15/2021/ND-CP: Detailing regulations on management of investment and construction projects
• Circular No. 10/2021/TT-BXD: Guiding the implementation of Decree No. 06/2021/ND-CP
• Circular No. 06/2021/TT-BXD: Regulations on classification of construction works and its application in investment project management

Strict compliance with legal documents ensures a smooth and lawful completion process.

Factory completion procedure – step-by-step

Step 1: Collect and prepare completion documents

According to Article 26 of Decree No. 06/2021/ND-CP, the investor is responsible for preparing the factory’s completion dossier. This includes three main groups of documents:

1. Investment preparation and construction contract documents:

• Decision approving the investment project for the factory within the industrial park
• Pre-feasibility study or technical-economic report
• Appraisal documents and opinions from competent authorities
• Land lease or allocation certificates (for IP developers)
• Land lease contracts (for enterprises leasing land)
• Construction permit
• Construction contracts with contractors
• Financial invoices or documents proving the investor’s financial capacity
• Investment policy decision and pre-feasibility report (if applicable)
• Compensation and site clearance plan (if applicable)
• Other related documents during the investment preparation phase (if applicable)

2. Survey and design documentation:

• Construction site survey reports
• Acceptance documents for survey and design results issued by competent authorities
• Technical design dossiers: including assessment reports and approval decisions
• Other related documents in the survey and design phases (if applicable)

3. Construction quality management documents:

• As-built drawings and their corresponding list
• List of design changes during construction with approval documentation
• Construction quality inspection plan
• Documentation on the quality control of installed equipment
• Completion acceptance report for the entire project
• Monitoring and measurement results during construction (if applicable)
• Acceptance reports for each construction phase (if applicable)
• Testing and quality verification reports (if applicable)
• Documentation on operational procedures and maintenance plans (if applicable)
• Fire safety, environmental protection approvals from competent authorities (if applicable)
• Incident and issue handling reports during construction (if any)
• Any other related documentation arising during this stage (if applicable)

In addition to legally required documents, businesses are advised to proactively prepare supplementary materials to streamline the completion process. These may include:

• Completion request form
• Declaration for registration fee payment
• Request form for asset change registration

In practice, the factory completion dossier is often complex and includes a wide range of documents. Therefore, preparing everything thoroughly and accurately from the outset helps avoid repeated revisions and saves valuable time.

Note: It is possible and advisable to prepare the completion documents concurrently during the construction process. This proactive approach not only ensures that all paperwork is properly managed but also significantly reduces the time needed to finalize procedures once the project is completed.

A land lease contract is one of the essential documents required when preparing the completion dossier.

Step 2: Submit the dossier to competent authorities

The investor must submit the completion dossier to the appropriate authority. For industrial properties such as factories, industrial parks, or manufacturing facilities, the documents are typically submitted to the Investment and Construction Management Board for processing.

Cases that require a completion dossier submission include:

• Construction of new factories or temporary factory structures
• Projects that undergo architectural or structural changes due to repair or renovation

Step 3: Dossier review process

Once the completion dossier is received from the factory investor, the receiving office will begin verifying that the submitted documentation is complete and valid.

• If the dossier is incomplete: It will be returned to the business for the necessary additions.
• If the dossier is complete and valid: The officer will issue a receipt and inform the business of the expected date for result delivery.

Following this, the Investment and Construction Management Board will carry out the following steps:

• Dossier Appraisal: Review the completeness and validity of all documents. Conduct an on-site comparison between the actual completed structure and the information in the dossier to ensure accuracy.
• Approval of Completion: If all requirements are met and the facility qualifies for use, the authority will issue an official decision approving the completion.
• Result Delivery: The business will collect the completion result on the scheduled date.

The process includes dossier appraisal, approval issuance, and result delivery.

Step 4: Payment of completion fees and result collection

Once the dossier review process is completed and before receiving the official result, the investor must pay all applicable fees related to the completion procedure. On the appointed date, the business will visit the designated authority to collect the results and proceed with the next steps to commence operations.

Fees incurred during the completion process may include:

• Registration fee: A mandatory fee paid to the government authority upon project completion.
• Basic construction taxes: Including Value Added Tax (VAT) and Corporate Income Tax (CIT). These may either be paid by the contractor or transferred to the investor if no construction contract is in place.
• Other costs: This may include the cost of preparing as-built drawings, project site appraisal fees, etc. These costs are not fixed and may vary based on the contract value and the specific requirements set by the property owner.

After completing all procedures, the factory will officially meet the legal conditions to begin production and business operations.

How long does the factory completion procedure take?

Currently, there is no specific legal regulation on the exact duration required to complete the factory handover procedure. However, businesses can estimate the timeline based on the following steps:

• Site Measurement and Survey: Typically takes around 7 days.
• Dossier Review and Validation: On average, this takes 3 weeks to 1 month, depending on the local authority’s processing timeline.
  • If the dossier is incomplete, the Industrial Park Investment and Construction Management Board will respond in writing within 15 days, stating the reasons and requesting corrections.
• Financial Obligations (Tax Payment): Takes approximately 7–10 days. After the dossier is confirmed as valid, the tax authority will issue a tax notification, and the business must complete payment as required.

Estimated total time to complete the factory handover procedure: approximately 45 days.

Note: Actual processing time may vary depending on the responsiveness of the local Management Board, particularly during peak periods or if on-site inspections are required.

Completing the factory handover procedure typically takes around 45 days.

What documents are required for factory completion?

The completion dossier is essential for final project approval and legal commissioning of the factory. Below is a checklist of the necessary documentation, divided into two main groups: Quality Management Documents and Legal Documents.

Key notes when completing factory handover procedures

In practice, many businesses face challenges during the factory handover process due to insufficient preparation or lack of clear guidance. To ensure a smooth and compliant process, here are some important considerations for investors:

1. Prepare the completion dossier concurrently with construction

To avoid delays and ensure a smooth approval process, businesses should prepare the completion dossier in parallel with the construction phase. This helps maintain proper documentation of progress, quality control, and acceptance reports—key components when submitting the final dossier.

2. Clearly define roles and responsibilities of all involved parties

The factory handover process typically involves multiple stakeholders, including:

• Investor – responsible for compiling the full dossier, ensuring accuracy, and managing legal procedures.
• Contractor – responsible for executing construction per design, and preparing acceptance reports for each stage.
• Supervising Consultant – responsible for verifying construction quality and confirming completion at each stage.

Clear coordination and accountability among all parties are essential for a smooth and compliant handover process.

3. Conduct acceptance before preparing the completion dossier

Final acceptance is a mandatory step before preparing the completion dossier. All elements—foundations, structural frames, electrical and plumbing systems, fire protection, etc.—must undergo proper acceptance and documentation.

Only after full acceptance is achieved can the investor proceed with compiling and submitting the official handover dossier to the relevant authorities.

It is important to conduct acceptance inspections before proceeding with factory completion.

Frequently asked questions

What is factory completion?

Factory completion is the final step in the construction process, involving the fulfillment of all legal procedures and documentation after construction has been completed. This stage includes quality inspection, final acceptance, and the preparation of the as-built dossier for submission to the competent authority in order to obtain the Certificate of Land Use Rights.

Factory completion plays a vital role in legalizing a business’s manufacturing operations, minimizing legal risks, and ensuring full compliance with current regulations.

Is factory completion important?

Factory completion is not just a bureaucratic procedure—it holds significant importance for all stakeholders, including investors, contractors, and government authorities.

• For the investor:
  The completion certificate is the legal proof of ownership and confirms that the factory has been constructed according to approved designs, meeting safety and quality standards. It is also a mandatory requirement to legally operate and use the facility.
• For the contractor:
  Factory completion serves as a basis for final payment and confirms that the contractor has fulfilled construction commitments in terms of quality and timeline, thus enhancing their credibility in the industry.
• For government authorities:
  The completion dossier helps authorities monitor construction activities in the region, ensuring compliance with regulations. It also serves as a basis for inspections and oversight of facility use. Moreover, the process helps detect and resolve any legal violations, contributing to construction safety and order.

Can a factory built without proper permits still be eligible for completion approval?

According to Clause 1, Article 98 of the Law on Construction (2014), certain changes require an adjustment to the construction permit. These include:

• Changes to the architectural appearance in areas with specific architectural requirements
• Modifications to construction location, project scale, floor area, number of stories, or height
• Internal design adjustments that affect fire safety, environmental standards, etc.

If any of these changes apply, the project is deemed to have been constructed without proper permits and cannot proceed with the completion process without a valid adjustment to the construction permit. In such cases, the investor must submit a request for permit adjustment and obtain approval from the competent authority before continuing with completion. Failure to comply may result in the facility being subject to demolition.

However, under Clause 17, Article 16 of Decree 16/2022/ND-CP, if changes made to the project do not fall under the categories requiring permit adjustments, they are not considered violations. In such cases, the investor can still proceed with the standard completion process.

In summary: If there are any deviations from the approved permit, the investor must carefully assess whether they fall under “unauthorized construction.” Based on this, appropriate steps can be taken to ensure the completion procedure is in line with legal requirements.

Conclusion

While the factory completion procedure within industrial parks is not overly complex, it requires thorough preparation of documentation and strict compliance with current legal regulations. Taking a proactive approach during construction, coordinating closely among all parties involved, and conducting acceptance inspections in accordance with proper procedures will help shorten the handover timeline and enable efficient project commissioning.

Understanding the completion steps in 2025 will be key for businesses to implement their projects professionally and lawfully.

Thank you for following this article by KTG Industrial. We hope you’ve found the most helpful insights on the factory completion procedure in industrial parks for 2025.

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In this article, KTG Industrial will provide a comprehensive overview of the benefits, structure, and most common types of overhead cranes used in manufacturing facilities today.

What is an overhead crane in a factory?

An overhead crane is a mechanical system installed above the working area, designed to lift and move heavy loads horizontally and vertically within the workspace. This equipment is particularly useful for handling large and heavy items such as steel, concrete, and industrial machinery.

With load capacities ranging from 1 to 500 tons and powered by electric motors, overhead cranes are widely used across various industrial manufacturing sectors. They significantly enhance material handling efficiency and ensure safety during operation.

An overhead crane is a piece of equipment used to lift and move heavy loads within a factory or workshop.

Advantages of using overhead cranes in factories

The application of overhead cranes in factories brings a range of significant benefits, helping businesses optimize production, ensure worker safety, and reduce operational costs. Key advantages include:

• Labor savings: Overhead cranes handle lifting tasks efficiently, significantly reducing the need for manual labor and lowering workforce-related costs.

• Increased productivity: With precise and flexible movement, overhead cranes help shorten handling time, maintain workflow continuity, and improve overall operational efficiency.

• Enhanced worker safety: Designed to meet technical safety standards, overhead cranes minimize the risk of accidents when handling heavy materials, ensuring safer working conditions.

• Cost-effective installation and easy upgrades: The crane’s structure allows for easy installation across various types of factory layouts. Maintenance, replacement, or upgrades can also be carried out quickly when needed.

What types of overhead cranes are used in factories?

There are two main types of overhead cranes commonly used in factories:

Single-girder overhead crane

This is a type of crane with a simple design, featuring a single main girder, usually constructed in a box (assembled) form or as an I-beam. The system includes components such as the main girder, end carriages, hoist for lifting and lowering, power supply systems for both the hoist and crane, control cabinet, and accompanying safety devices.

Single-girder cranes have a lifting capacity ranging from 0.5 to 10 tons, making them suitable for light to medium-duty material handling needs in factories. Thanks to their compact design and space-saving advantages, they are particularly well-suited for production facilities with limited space and moderate scale.

Single-girder overhead crane

Double-girder overhead crane (double girder crane)

This type of crane uses two parallel main girders, typically in a robust box beam form. The system includes a trolley with a hoist that moves along the girders, a maintenance walkway, power supply and control systems, along with specialized safety devices.

Lifting capacity can vary depending on the design—from several tons to over 100 tons. The biggest advantage of a double-girder crane is its ability to handle heavy loads efficiently, with high durability and operational stability. However, it comes with higher initial investment costs and requires more installation space.

This type of crane is commonly used in large-scale factories such as metallurgy, steel manufacturing, industrial packaging, and thermal power plants.

Double-girder overhead crane

What is the structure of an overhead crane in a factory?

1. Main girder:

The main girder is the primary load-bearing component of the overhead crane, typically designed as a box girder or using I-beam steel. It also serves as the track for the hoist or trolley to move along. When designing the main girder, it is essential to consider the lifting capacity and the span of the factory to ensure structural rigidity, elasticity, and operational stability.

2. End girders (end trucks):

End girders are rectangular box-shaped steel structures, commonly 6 to 10 meters in length. Each end is equipped with a drive mechanism and rubber bumpers to reduce impact when the crane reaches travel limits. The end girders are connected to the main girder using bolts, flanges, or fillet welds depending on the design.

3. Wheels:

Depending on the load and span, cranes use wheels of various diameters such as D200, D250, D300, D350, D400, D500, or axle-mounted wheels. These wheels ensure stable and smooth movement.

4. Lifting mechanism:

The lifting system may include electric chain hoists, electric wire rope hoists, or trolleys. Chain and wire rope hoists are typically integrated with single-girder cranes, while trolleys are used in double-girder cranes for handling heavier loads.

5. Control system:

Overhead cranes can be operated via different methods such as wired pendant control, wireless remote control, or integrated operator cabins—depending on the operating conditions and work environment.

6. Crane runway (rails):

The crane operates on specialized steel rails, typically made from standard types such as P11, P15, P18, P24, P30, P38, or P43, selected based on load and system scale.

7. Bumpers (shock absorbers):

Bumpers are critical components designed to absorb impact when the hoist or crane reaches its travel limit. Made from engineered rubber, they offer high elasticity and excellent wear resistance. These components come in various sizes and shapes to suit a wide range of operational requirements.

8. Travel motors and drives:

The travel system includes the motor housing, gear transmission, electromagnetic brakes, pinion gears, and brake diodes. The crane moves along the rails using four wheel assemblies—each end truck includes one powered and one idle wheel. Motors typically use 3-phase, 380V – 50Hz AC power.

9. Electrical system:

There are two main power supply systems: the transverse system for the hoist and the longitudinal system powering the entire crane. This setup ensures continuous and safe operation during all working phases.

General structure of an overhead crane

Operating mechanism of an overhead crane in a factory

The overhead crane system operates based on power transmission from an electric motor to a gearbox via couplings and drive shafts. This setup drives the wheels, which move the entire main girder of the crane along its designed travel path. Simultaneously, the trolley—where the lifting mechanism is installed—moves along a rail system mounted on the main girder.

In certain situations, the braking system is activated to slow down or safely stop the crane’s movement. The entire operation is controlled by a central control system, ensuring synchronized and precise coordination between all electrical and mechanical components of the crane.

What factors should be considered when installing an overhead crane in a factory?

Unlike standard mechanical equipment, overhead cranes are used to lift and move heavy loads within factories. Therefore, the selection, design, and installation of cranes require a high level of technical accuracy to ensure safety, efficiency, and to avoid unnecessary costs. Below are key factors to consider when installing an overhead crane:

Load capacity

Maximum lifting capacity is a critical factor that determines the crane’s technical configuration and overall cost. The greater the capacity, the more complex the structure and the higher the investment. It’s important to clearly define the actual weight of goods and frequency of use to select a crane with suitable power—avoiding both underuse and overload risks.

Span

Span refers to the distance between the two parallel rails, corresponding to the crane’s operational width. A larger span requires more robust steel structures and detailed technical planning, which can increase production and installation costs. Accurately determining the required span early on helps streamline cost estimates and system optimization.

Lifting height

Lifting height (also known as hook travel) influences the selection of the hoist and the required length of chain or wire rope. To ensure efficient operation, installers typically conduct an on-site survey, measuring parameters like column height and roof clearance to recommend the most suitable crane configuration.

Crane runway length

This defines how far the crane will travel along the runway inside the facility. Runway length directly impacts the scale of rail installation, power supply system design, and overall project cost. Providing this specification early to the contractor enables faster and more accurate design and pricing.

Lifting and travel speed of the crane

The lifting and travel speed of an overhead crane is another important factor to consider. Each type of crane can be designed with one or multiple speed settings and may include an inverter (VFD) for flexible speed control based on operational needs. Cranes with higher speeds or more advanced maneuverability often come with higher investment costs.

Installing an overhead crane in a factory involves careful consideration of multiple key factors.

Important notes when operating overhead cranes in factories

During operation, factory overhead cranes may encounter technical issues that affect performance. Therefore, businesses should provide thorough training for workers on safe and efficient crane operation procedures.

Maintaining a regular cleaning and maintenance schedule also helps reduce the risk of equipment failure and extends the crane’s lifespan.

In addition, the lighting system—especially LED lights in the workshop—should be installed below the crane’s travel height and away from its operating range. This ensures adequate lighting is maintained while minimizing the risk of collisions that could damage the lights during crane operation.

Related article: Lighting standards for factory in Vietnam

Installation process of an overhead crane in a factory

To ensure efficient operation, the installation process must strictly follow technical procedures through the following steps:

Step 1: Select the appropriate crane type
Identify usage requirements to choose the right type of crane—single girder, double girder, suspension, semi-gantry, etc.—based on load capacity and working environment.

Step 2: Prepare installation infrastructure
Inspect and complete the rail system, column foundations, and electrical system to ensure compliance with design and safety standards.

Step 3: Fabricate, paint, and prepare components
Fabricate crane parts, apply anti-rust coating, and gather all components and equipment at the construction site.

Step 4: Assemble the mechanical structure
Install the main girder, end trucks, railings, and platforms. Use a crane to lift the entire structure and place it onto the rail tracks.

Step 5: Install the lifting system
Set up the hoist, hook block, conductor rail, and safety components in their designated positions.

Step 6: Install the electrical and control systems
Lay out electrical wiring, mount the control cabinet, and connect the hoist and remote control system.

Step 7: Test run and safety inspection
Perform test runs with and without load, check all functions and safety devices before handing over the equipment for use.

Conclusion

With the information provided above by KTG Industrial, we hope you now have a solid understanding of overhead cranes in factory settings. These cranes are essential equipment across various industrial sectors, especially in facilities that require heavy lifting and material handling.

By understanding the structure, advantages, and different types of overhead cranes, businesses can make informed decisions and select the most suitable solution for their production needs—ultimately improving operational efficiency and optimizing investment costs.

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Factory lease contract and key considerations

A factory lease contract serves as the legal foundation that defines the rights and obligations of all parties involved, while also helping to minimize potential disputes during the lease term. Below are important aspects that businesses should keep in mind when drafting a factory lease agreement:

Legal basis governing factory lease contracts

A factory lease contract is a type of civil agreement governed by various current legal regulations. Drafting and executing such contracts must adhere to the applicable legal framework to ensure that the rights and obligations of the parties are properly enforced, while also minimizing risks and future disputes. Relevant legal documents include:

• The 2015 Civil Code – General provisions on property lease contracts.
• The 2014 Law on Real Estate Business and Decree No. 02/2022/ND-CP – Detailed regulations on real estate leasing activities.
• The 2014 Law on Housing – Applicable in cases where the factory is classified as a residential property used for business purposes.
• The 2013 Land Law – Regulations on land use rights and conditions for leasing assets attached to land use rights.

Regulations on factory lease price and lease term

The rental price for a factory is determined based on mutual agreement between the involved parties. If an agreement cannot be reached, the rental price may be determined by a third party upon request. In the absence of a specific agreement, the rent shall be based on the prevailing market price at the time the contract is signed.

Regarding the lease term, the parties have the flexibility to negotiate a duration that suits their operational needs. If the contract does not clearly specify the lease term, either party has the right to unilaterally terminate the agreement, provided that reasonable prior notice is given to the other party. This ensures both parties’ interests are protected and helps avoid disruptions to production and business operations.

Leasing principles and contract effective date

The leasing of a factory and the commencement date of the lease agreement are clearly defined as follows:

• Leasing principles: The factory offered for lease must meet construction quality standards, ensure operational safety, environmental hygiene, and include supporting utilities. It must also comply with the original technical design and intended use.
• Effective date of the contract: The lease agreement becomes effective from the date agreed upon and clearly stated in the contract. If the contract is notarized, the effective date is determined based on the notarization date. If not notarized, the effective date is based on mutual agreement between the parties.

Mandatory contents in a factory lease contract

A factory lease contract is a type of property lease agreement governed by the provisions of the 2015 Civil Code, specifically Article 398. In addition, since it involves real estate business activities, the contract must also comply with the 2014 Law on Real Estate Business.

A valid and complete factory lease contract must include the following key components:

• Property information: The contract must clearly specify the details of the leased factory, including its location, area, structural specifications, and current condition. In addition, the property must be legally documented, such as having a land use rights certificate and construction ownership certificate, and must not be involved in any legal disputes.
• Rental price and payment terms: The parties must clearly agree on the rental price, payment method, and payment cycle (monthly, quarterly, or annually), along with any other associated costs if applicable. If there is a legal framework regulating rental pricing, the agreed rate must comply with such regulations.
• Rights and obligations of the parties: The contract should define the rights and responsibilities of both the lessor and the lessee, including maintenance and repair duties, proper use of the factory, and compliance with regulations on fire safety, environmental protection, and occupational safety.
• Handling of contract breaches: This section must outline specific violations and the corresponding remedies, such as penalties, compensation for damages, or unilateral termination of the contract.
• Dispute resolution mechanism: In the event of a dispute, the parties may choose one of the following resolution methods: negotiation, mediation, commercial arbitration, or litigation at a competent court.
• Additional provisions (if any): These may include agreements on contract extension, rental price adjustments over time, early termination conditions, or any other terms based on mutual agreement.

Note:
The factory lease contract must be made in writing. While notarization or authentication is not legally required, completing these steps can enhance legal validity and reduce risks during contract execution.

Common disputes in factory lease contracts

Disputes in factory lease contracts often arise when one party fails to fully or properly perform their contractual obligations, affecting the legal rights and interests of the other party.

Some common types of disputes include:

• Disputes over the legal capacity of the contracting parties: For example, the lessor does not have the legal right to lease the property or is not properly authorized to sign the contract.
• Disputes related to the leased property: The factory does not match the described specifications, such as area or condition, or lacks legal eligibility for leasing.
• Disputes over maintenance, repair, or upgrades: Unclear assignment of responsibility may lead to disagreements when issues arise.
• Disputes over rental price and lease term: These can occur due to price adjustments, late payments, or early termination of the lease.
• Disputes concerning subleasing rights: One party subleases the property to a third party without the consent of the other.
• Disputes regarding liability for damages: Especially in cases of premature or unilateral contract termination.
• Other disputes arising during the execution of the contract.

Suggested approaches to resolving factory lease contract disputes

During the execution of a factory lease contract, if a dispute arises, the resolution process must ensure the protection of the affected party’s legitimate rights and interests.

According to Clause 1, Article 39 of the 2015 Civil Procedure Code, the People’s Court at the district level where the real estate is located has jurisdiction over disputes related to factory lease contracts.

The aggrieved party may request the court to take actions such as: declaring the civil contract void, requesting compensation for damages, applying contractual penalties, or unilaterally terminating the contract in accordance with legal provisions.

Procedure for resolving factory lease disputes:

• Step 1: Submit a lawsuit petition to the competent People’s Court in accordance with legal regulations.
• Step 2: The court reviews the submitted documents and accepts the case if it meets the legal requirements for initiating a lawsuit.
• Step 3: Fulfill the obligation to pay a provisional court fee and submit the payment receipt as requested by the court.
• Step 4: The court conducts pre-trial procedures, including evidence collection, summoning involved parties, and organizing mediation if necessary.
• Step 5: Conduct the first-instance trial: After the hearing and issuance of the judgment, either party may file an appeal if they disagree with the court’s decision, in accordance with the law.

Dispute resolution must ensure the protection of legitimate rights and interests

Further reading: What is the factory span?

Factory leasing procedures in industrial parks

When leasing a factory in an industrial park, businesses must clearly understand the legal requirements and important considerations to avoid potential risks. Below are key points that both lessors and lessees should keep in mind:

Potential risks related to factory lessors

In today’s market, there are two main groups involved in factory leasing activities. The first group consists of legal owners who directly hold the rights to use and operate the factory. The second group includes parties that sublease factories after renting them from the original developer.

However, entities in the second group often do not meet the legal conditions required to sublease the property lawfully. Engaging in transactions with such parties carries significant legal and financial risks. Therefore, businesses must exercise caution and thoroughly verify legal documentation to avoid unnecessary losses.

What legal documents are required for subleasing a factory?

Prepare complete legal documents proving the right to use the factory

Businesses must ensure they possess all necessary documents proving legal ownership or usage rights of the factory intended for sublease. The documentation must clearly show that the factory is not involved in any disputes, is not subject to enforcement measures, and is not restricted from transfer under any decisions issued by competent authorities.

If the factory is currently mortgaged, a written approval from the credit institution or mortgagee must be obtained before signing the lease agreement.

Register and update business lines to include factory leasing

Before engaging in factory subleasing activities, the owner must complete procedures to register or update their business scope in accordance with the Law on Investment, the Law on Real Estate Business, and relevant regulations applicable to industrial and export processing zones. This process requires the enterprise to prepare all legally required documents.

Ensure the leased area is independent and does not affect other tenants

The leased factory area must be operationally independent to avoid interfering with neighboring businesses or the overall operation of the industrial or export processing zone. In addition, the premises must meet space requirements for supporting facilities and amenities for workers’ daily needs and work activities.

The factory for lease must be an independent and self-contained area

Notify relevant authorities and stakeholders as required

The leasing enterprise must proactively notify the Industrial Park Management Board about the leasing plan and coordinate on technical infrastructure requirements. This ensures that the tenant’s operations do not negatively impact the shared systems of the industrial zone.

Establish a clear and transparent factory lease contract

Although notarization or certification is not legally required for a factory lease contract, the contract must be drafted clearly and transparently. It should specify the responsibilities of the involved parties regarding the following matters:

• Connection to and flow capacity of the wastewater treatment system linked to the park’s shared infrastructure
• Collection and disposal of solid and hazardous waste
• Obligations to contribute to infrastructure maintenance fees and other service charges
• Commitment to maintaining the structural integrity and quality of the factory during the lease period

Important considerations for factory tenants

Registered business lines must align with factory usage

Tenants must ensure that their registered business lines are compatible with the intended use of the factory and aligned with the investment orientation of the industrial or export processing zone. These business activities should either be similar to those of the lessor or fall within the categories permitted under the area’s environmental license.

Additionally, in certain localities, further requirements may apply—such as the use of advanced or environmentally friendly technologies, limitations on wastewater discharge, and non-polluting operations. These criteria are often prerequisites for lease approval.

Production and business scale should match the leased area

Tenants should clearly define the scale and nature of their production or business activities to ensure they do not disrupt neighboring operations or interfere with the overall functioning of the industrial or export processing zone.

Fulfill all legal procedures in accordance with current regulations

After signing the lease contract, the tenant is responsible for completing all necessary legal procedures as required by law, including:

• Registering for the Investment Registration Certificate (IRC)
• Registering as a generator of hazardous solid waste
• Registering internal labor regulations and supporting the establishment of a trade union
• Drafting and registering the collective labor agreement and wage scale
• Reporting on labor usage and declarations as required by labor laws

The enterprise must complete all required legal procedures after signing the lease contract.

Frequently asked questions

Is it allowed to sublease surplus factory space in an industrial park?

Yes, businesses are allowed to sublease surplus factory space in industrial parks to optimize operating costs—as long as they comply fully with all relevant legal regulations.

Specifically, subleasing warehouse or factory space is considered a real estate business activity under the 2014 Law on Real Estate Business and the 2020 Law on Enterprises. Therefore, businesses intending to sublease factory space must:

• Register real estate business as one of their official business lines in their Enterprise Registration Certificate
• Maintain eligibility to conduct real estate business throughout their operations
• Obtain written consent from the primary lessor (typically the industrial park developer); this should be clearly stated in the original lease agreement or as an appendix
• Ensure the subleased facility has complete legal documentation, is free of disputes, and is not subject to seizure or enforcement. If the facility is mortgaged, written approval from the mortgagee is required
• Clearly define in the lease contract the responsibilities related to wastewater treatment, infrastructure maintenance, facility quality, and environmental compliance, to avoid future legal risks
• Use the leased factory in accordance with the approved purpose, as specified in legal documents related to land use rights and the original land lease agreement

Does a factory lease contract need to be notarized?

Under current regulations, a factory lease contract does not require notarization or certification unless otherwise agreed upon by the parties.

Specifically, according to Point b, Clause 3, Article 167 of the 2013 Land Law and Clause 2, Article 17 of the 2014 Law on Real Estate Business, contracts involving the lease of land use rights and assets attached to land (including factories and warehouses) are only required to be in written form. Notarization is not mandatory and depends on the mutual agreement between the parties.

If there is no request or agreement on notarization, the lease contract remains legally valid without it. However, in certain cases—such as high-value transactions, long-term leases, or to prevent future disputes—it is advisable for the parties to consider notarizing the contract to ensure greater legal clarity and protection.

Conclusion

Leasing a factory is not merely a real estate transaction—it is closely tied to a company’s long-term development strategy. Understanding the legal procedures and drafting a clear, compliant lease contract will help businesses operate with confidence and maximize investment efficiency.

Don’t overlook any step in the leasing process to ensure a safe and lawful experience for both lessors and lessees.

Thank you for following KTG Industrial’s comprehensive guide. We hope you found the information helpful and practical for your business needs.

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