Vietnam Industrial Landscape

Recognizing the importance of industry to the national economy, the Government has made efforts to implement many important policies and guidelines to promote sustainable growth. This is clearly demonstrated through the positive results from revenue and market share of some key industries such as electricity, electronics, information technology, etc.

Typically, by the end of 2024, according to information from the Ministry of Information and Communications, the industrial revenue of the digital technology industry in Vietnam is estimated to reach VND 3,878,296 billion (about USD 151.86 billion, up 11.2% compared to 2023) [2].

However, the current industry in Vietnam still does not meet certain requirements of the global industrialization and modernization process. In general, positive results are only short-term instead of the desire for stable and sustainable growth. This can be explained by reasons such as weak internal strength, heavy dependence on foreign investment, too much emphasis on cheap labor, etc.

Industry in Vietnam is on the rise, and needs appropriate support policies

What’s in industrial policy in Vietnam

The Vietnamese Government has officially approved the Government’s Action Program, implementing Resolution No. 23-NQ/TW dated March 22, 2018 of the Politburo on the orientation of building a national industrial development policy to 2030, with a vision to 2045 (attached to Resolution No. 124/NQ-CP) [1].

The most important goal of this program is to turn Vietnam into a country with rapid industrialization and modernization so that it is in the TOP 3 leading countries in Southeast Asia (ASEAN) by the end of 2030. At the same time, the Government’s vision is that by 2045, Vietnam will become a modern industrialized country.

To implement these strategies, the Government and the Politburo have agreed on a number of detailed and key goals for 2030 as follows:

• Industrial Competitiveness Index (CIP) is among the top 3 countries in ASEAN.
• GDP growth with the proportion of industry reaching over 40%.
• The proportion of GDP for the processing and manufacturing industry reaches about 30%.
• The proportion of GDP for the manufacturing industry reaches over 20%.
• The proportion of high-tech industrial products in the processing and manufacturing industry reaches at least 45%.
• The average growth rate of industrial added value is over 8.5%/year
• The average growth rate of the processing and manufacturing industry is over 10%/year.
• The average growth rate of industrial labor productivity is 7.5%/year.
• The proportion of labor in the industrial and service sectors is over 70%.
• Building a number of large-scale domestic industrial enterprises with international competitiveness [1].

From now until 2030, Vietnam has had certain strategies for the industrial sector

Government policies and initiatives driving industrial growth

To achieve the above goals, the Vietnamese Government has proactively proposed appropriate action programs. Including:

• Completing the approval of proposed plans in industrial sectors according to the Law on Planning, so that the territorial space and industrial structure shift can meet daily orientations and local socio-economic conditions.
• Consider forming industrial clusters based on appropriate criteria (such as the same industry, having advantages in trade, geo-economics, labor resources, etc.).
• Proactively coordinate with ministries and branches to develop methods to evaluate the performance of the above clusters to ensure the highest operational efficiency.
• Focus mainly on industries related to automobiles, agricultural machinery, construction equipment, industrial equipment, electrical and electronic equipment, etc.
• Coordinate with the Ministry of Agriculture and Rural Development to guide and direct localities to allocate appropriate agricultural and forestry processing facilities according to raw material areas and consumption capacity.

Investment opportunities in Vietnam’s industries

Towards completing all goals by 2030, Vietnam is currently “opening” to all potential investors in important industries with many new strategies as follows:

Manufacturing

Manufacturing is one of the industries that promotes strong economic development in Vietnam. This is confirmed by the data of more than 24.8 billion USD of FDI into our country as of September 2024, focusing mainly on high-value industries such as electronics, auto components, semiconductors and green technology [6].

In the national industrial development policy to 2030, the Government has actively requested the Ministry of Industry and Trade to focus on perfecting policies and regulations related to the development of the manufacturing industry, especially key mechanical products. In addition, the government also approved the strategy and removed factors affecting the development results of the textile and footwear industry in 2025.

By 2024, the manufacturing industry has also made important strides, preparing for development results in 2025. According to the General Statistics Office of Vietnam, the industrial production index increased by 8.4% over the previous year (in the first quarter, it increased by 5.9%; in the second quarter, it increased by 9.9%; in the third quarter, it increased by 9.3% and in the fourth quarter, it is estimated to increase by 7.9%) [7]

Manufacturing is an indispensable part of the GDP revenue of the industrial sector in Vietnam

Electronics

Not inferior to the manufacturing industry, the electrical and electronic industry in our country has also made many remarkable strides. Typically, compared to 2023, the production output of uninterruptible power supplies, automatic data processing equipment, etc. increased by 23.3%; computer components increased by 8.37%,… (information as of July 2024) [4].

Along with that, it can be seen that electronic products on the market are mainly imported and assembled domestically. This is a positive result for investors aiming for this industry.

The electronics industry is also a bright spot in the development of Vietnam’s industry in 2024 when witnessing a series of events such as

Renewable Energy

Realizing the great potential of the energy industry (especially renewable energy), the Government issued many documents to improve the investment environment for this “golden” field.

Specifically, the VIII generation power planning process was successfully approved in May 2023, expected to increase by 4,100 MW of capacity, mostly from solar power by 2030. In addition, the state also plans to add 252.1 – 291.5 billion kWh of electricity production from natural light by 2050, along with 21,880 MW of onshore wind power, 6,000 MW of offshore wind power by 2030 and 70,000 – 91,500 MW by 2050 [3].

Infrastructure

As a developing economy, Vietnam needs a lot of investment capital to build infrastructure systems, thereby creating favorable conditions for sustainable growth. According to the latest statistics, Vietnam wants to have at least 25 – 30 billion USD/year, from now until 2040 to invest in transportation, highways, trains, etc. [8]

Faced with such a demand threshold, our country is constantly striving to rank high on the international credit rating list according to Fitch Ratings. That means Vietnam has demonstrated its financial capacity, ability to meet debt obligations and economic and social stability in the following years. This is a great foundation for investors who want to recover capital quickly [8].

Although the infrastructure in Vietnam has been more complete than before, some areas still need more investment capital

Logistics

According to the latest information, the average growth rate of Vietnam’s logistics industry is 14% – 15%, with a scale of 40 – 42 billion USD/year. In parallel, the results of the World Bank (WB) rankings show that Vietnam ranks 43rd in the Logistics Performance Index (LPI), among the top 5 countries in ASEAN (as of 2023) [9].

Thanks to such impressive potentials, Vietnam is confident that it can “upgrade” the Logistics industry in the future if it has enough capital potential. Therefore, the Prime Minister issued Decision No. 200/QD-TTg dated February 14, 2017 approving the Action Plan to improve competitiveness and develop Vietnam’s logistics service industry by 2020 with 06 goals and 60 specific tasks. Of course, there are many tax policies and supporting infrastructure [5].

Challenges and factors for businesses when participating in the industrial market

Although Vietnam opens up many opportunities for multi-sector investment, there are certain challenges that need to be overcome as soon as possible to achieve the expected economic growth rate. Notable among them are:

Regulatory landscape

Vietnam is an Eastern country, so in general, the legal system is still partly influenced by outdated customs and practices. Along with that, the process of perfecting and developing our country as it is now is only less than 50 years, so somewhere the law has not been adjusted too much according to the extremely fast integration speed as it is today. Therefore, foreign enterprises wishing to invest in our country may encounter difficulties in completing procedures according to state regulations.

Procedures for registering investment or business in Vietnam still have shortcomings

Infrastructure limitations

As mentioned above, although the quality of infrastructure in our country is improving positively, it may not “catch up” with the needs of investors. Up to now, we still need huge investment capital for infrastructure (tens of billions of USD per year). Therefore, if foreign investors require much higher infrastructure requirements (such as subways) to serve the production and distribution process, our country is temporarily unable to meet them well.

Workforce challenges

According to the latest updated data (January 16, 2025), Vietnam has reached a milestone of more than 101,313,000 people and an average age of 32.9 years old (with the majority of the population between 15 and 64 years old) [10]. It can be seen that our country’s labor force is extremely abundant, but to increase the economy comprehensively, workers must have solid technical skills and expertise. This is a shortcoming of Vietnam when the number of intellectual human resources is not enough to directly serve factories and plants, but must be sought abroad.

Competition

Competition between businesses can be the reason why new investors hesitate

Although competition between investors and business owners is inevitable to help the economy grow more effectively, if competition occurs beyond what is necessary, new investors will have a “cautious” mindset and consider more carefully. This leaves Vietnam with a number of opportunities to attract both domestic and foreign investment.

Conclusion

Vietnam’s industrial policy, coupled with strong government support and a dynamic economy, offers unparalleled opportunities for investors and businesses looking to expand. With booming sectors such as manufacturing, electronics, renewable energy, infrastructure and logistics, the country is poised for a major transformation, particularly the opportunity to become a global semiconductor hub [11]. The government’s focus is on improving the regulatory framework, investing in infrastructure and promoting innovation to ensure an environment conducive to sustainable growth. For businesses looking to tap into Vietnam’s potential, now is the time to act and secure a foothold in this rapidly growing market.

References:

[1] Vien Kiem sat Nhan dan Toi cao. (2025). Chinh sach phat trien cong nghiep quoc gia den nam 2030. Vksndtc.gov.vn. http://vksndtc.gov.vn.

[2] Hoang Ngan. (2025, January 7). Doanh thu nganh cong nghiep cong nghe so Viet Nam dat hon 151 ty USD trong nam 2024. Retrieved January 15, 2025, from DCCA – Lien minh sang tao noi dung so Viet Nam website: https://www.dcca.org.vn/doanh-thu-nganh-cong-nghiep-cong-nghe-so-viet-nam-dat-hon-151-ty-usd-nam-2024.

[3] Tap chi cong san. (2018). Retrieved January 16, 2025, from Tap chi Cong san website: https://www.tapchicongsan.org.vn/web/guest/kinh-te/-/2018/910402/chinh-sach-cong-nghiep-xanh-huong-toi-su-phat-trien-ben-vung-o-viet-nam.aspx.

[4] Nganh cong nghiep dien tu Viet Nam nhieu loi the va tiem nang phat trien. (2024, September 12). Retrieved January 16, 2025, from moit.gov.vn website: https://moit.gov.vn/tin-tuc/phat-trien-cong-nghiep/nganh-cong-nghiep-dien-tu-viet-nam-nhieu-loi-the-va-tiem-nang-phat-trien.html.

[5] (2017). Retrieved January 16, 2025, from Mof.gov.vn website: https://mof.gov.vn/webcenter/portal/vclvcstc/pages_r/l/chi-tiet-tin?dDocName=MOFUCM195235.

[6] Tan, M. (2024, November 9). Viet Nam dang o vi the tot hut “lan song” moi dau tu vao nganh cong nghiep gia tri cao. Thoi Bao Tai Chinh Viet Nam. https://thoibaotaichinhvietnam.vn/viet-nam-dang-o-vi-the-tot-hut-lan-song-moi-dau-tu-vao-nganh-cong-nghiep-gia-tri-cao-163642.html

[7] Diem sang cua san xuat cong nghiep nam 2024. (2024). General Statistics Office of Vietnam. https://www.gso.gov.vn/du-lieu-va-so-lieu-thong-ke/2025/01/diem-sang-cua-san-xuat-cong-nghiep-nam-2024/

[8] LE MY. (2024, February 9). Nhu cau dau tu co so ha tang va co hoi von cua doanh nghiep. Diendandoanhnghiep.vn. https://diendandoanhnghiep.vn/nhu-cau-dau-tu-co-so-ha-tang-va-co-hoi-von-cua-doanh-nghiep-10128205.html

[9] Hai Van. (2024, October 31). Nganh logistics can chuyen doi de but pha trong ky nguyen moi. Nhip Song Kinh Te Viet Nam & The Gioi. vhttps://vneconomy.vn/nganh-logistics-can-chuyen-doi-de-but-pha-trong-ky-nguyen-moi.htm

[10] hoavic. (2017, April 21). Dan so Viet Nam moi nhat (2025) – cap nhat hang ngay – DanSo.org. DanSo.org. https://danso.org/viet-nam/

[11] baochinhphu.vn. (2024, October 2). Viet Nam co co hoi tro thanh trung tam cong nghiep ban dan toan cau. Baochinhphu.vn. https://baochinhphu.vn/viet-nam-co-co-hoi-tro-thanh-trung-tam-cong-nghiep-ban-dan-toan-cau-102241002094034294.htm

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Overview of Industrial Parks (IP)

An industrial park is a geographically defined area that is planned and developed specifically for industrial production and the provision of supporting services. According to Clause 16, Article 3 of the Investment Law 2020, industrial parks are concentrated areas for industrial activities, including manufacturing, processing, and distribution [1].

Additionally, industrial parks can be classified into various types, such as:

• Export Processing Zones: Specializing in the production of export goods.
• Supporting Industry Parks: Focusing on manufacturing industrial supporting products.
• Eco-Industrial Parks: Promoting clean production and efficient resource utilization.
• High-Tech Industrial Parks: Attracting investment in high-tech projects, research, and development.

Industrial parks play a vital role in driving economic growth, attracting investment, and generating employment opportunities.

The industrial park contributes to economic development.

There are over  300 industrial parks in Vietnam, covering a total area of more than 70,000 hectares, distributed across the northern, central, and southern regions.

The government supports investors through incentives such as corporate tax exemptions, import tax reductions, and preferential land lease policies.

According to CBRE, by 2023, the average occupancy rate of industrial parks in northern Vietnam reached 80.2%, while industrial parks in the southern regions, including Ho Chi Minh City and Binh Duong, had an average occupancy rate of 81.9%. Key northern provinces such as Bac Ninh, Hanoi, and Hai Phong continue to be investment hotspots, whereas the central and southern regions attract investors due to their well-developed transportation infrastructure [3].

With an abundant labor force, competitive costs, and a strategic location near international ports, Vietnam’s industrial parks have become a key manufacturing and export hub in Southeast Asia, creating numerous opportunities for businesses.

Overview of Industrial Zones (IZ)

An industrial zone is a large-scale industrial territorial structure that integrates industrial parks, industrial clusters, and industrial centers, with a high degree of specialization in production. Industrial zones play a key role in promoting economic development by fostering specialization and strengthening linkages among businesses through closely interconnected production activities.

There are  six industrial zones in Vietnam,with its characteristics, potential, and key industries:

• Northern Midland and Mountainous Region: Comprising 14 provinces, specializing in mineral extraction, processing, and high-tech agriculture.
• Red River Delta: Covering 14 provinces, focusing on processing industries, construction materials production, and strong infrastructure development.
• North Central and Central Coastal Region: Consisting of 10 provinces, known for processing agricultural, forestry, and seafood products. Notably, Du Long Industrial Park (Ninh Thuan) has attracted over VND 1,000 billion in investment.
• Central Highlands: Encompassing four provinces, focusing on hydropower and agricultural and forestry processing industries.
• Southeast Region: Spanning eight provinces, leading the country in GRDP, with strengths in oil and gas extraction and high-tech industries.
• Mekong Delta: Including 13 provinces, specializing in industries utilizing natural gas and aquaculture.

Key Differences Between Industrial Parks and Industrial Zones in Vietnam

An industrial zone (IZ) is a large geographic area that spans multiple provinces or inter-regional areas and can focus on a single industry or encompass multiple industries. Meanwhile, an industrial park (IP) is a smaller, well-planned area located near major urban centers, with more concentrated management and stricter regulatory oversight.

Industrial zones can be categorized into sector-specific zones (focusing on a particular industry) and comprehensive industrial zones (integrating multiple industries). Industrial zones can encompass several industrial parks.

Definitions of Industrial Zones and Industrial Parks

• Industrial Zone (IZ): A large-scale area comprising multiple industrial clusters, industrial centers, and production sites. These interconnected components form a production ecosystem, optimizing resources, labor, and support services. Industrial zones may span multiple localities and serve as the foundation for key economic regions.
• Industrial Park (IP): A specifically designated area with clearly defined boundaries dedicated to industrial production. Industrial parks are often strategically located near seaports, highways, or major urban centers to facilitate trade and logistics [15].

In addition to the two previously mentioned concepts, industrial clusters may also be a source of confusion. According to Clause 1, Article 2 of Decree 68/2017/ND-CP, an industrial cluster is an area designated for industrial production and related services, including handicrafts. These clusters have defined geographical boundaries, are non-residential, and are developed to attract and relocate small and medium-sized enterprises (SMEs), cooperatives, and business partnerships for production and business operations. The size of an industrial cluster ranges from 10 to 75 hectares [13].

The fundamental and most straightforward difference between an industrial park and an industrial cluster lies in scale and business types. While industrial clusters mainly house small and medium-sized enterprises, industrial parks accommodate large-scale industrial manufacturers. By 2025, Vietnam aims to establish 1,704 industrial clusters [14].

Scale: Land Area and Industry Concentration

• Industrial Zones (IZs): Typically cover vast geographic areas that can span multiple provinces or cities. Each industrial park or cluster within an industrial zone represents a smaller component of the larger economic ecosystem. For example, the Southern Industrial Zone includes provinces such as Binh Duong, Dong Nai, and Ho Chi Minh City.
• Industrial Parks (IPs): Significantly smaller than industrial zones, usually spanning a few hundred hectares or less. These parks often specialize in certain industries, such as high-tech industrial parks or textile and garment industrial parks.

Characteristics: Organization and Management

• Industrial Zones (IZs): Planned as integrated economic regions with unified development policies to maximize economic potential. Although businesses within an industrial zone operate independently, they benefit from shared infrastructure, logistics networks, and synchronized supply chains.
• Industrial Parks (IPs): More structured, with a dedicated management board overseeing operations within the park. This board ensures regulatory compliance, facilitates administrative procedures, and supports infrastructure development tailored to the specific needs of businesses within the park.

Role: Economic Impact at National and Local Levels

• Industrial Zones (IZs): Act as economic growth engines for entire regions or the nation. Large industrial zones, such as Vietnam’s Southern Key Economic Region, not only make significant contributions to national GDP but also promote exports, technology transfer, and foreign direct investment (FDI).
• Industrial Parks (IPs): Play a crucial role in job creation, attracting investment, and modernizing local infrastructure. Additionally, industrial parks drive economic restructuring, transitioning local economies from agriculture to industry and services.

Development Trends: Future Models and Directions

• Industrial Zones (IZs): Develop in alignment with national economic planning, focusing on natural resource utilization, large-scale logistics hubs, and regional connectivity. In the future, industrial zones are expected to transition towards sustainability, emphasizing green industries and minimizing environmental impact.
• Industrial Parks (IPs): Currently evolving towards advanced models such as eco-industrial parks, supporting industry parks, and high-tech parks. These new models not only enhance production efficiency but also contribute to lower greenhouse gas emissions and improved energy conservation.

Investment Benefits: Incentives and Development Opportunities

• Industrial Zones (IZs): Offer macro-level advantages with coordinated policies and interconnected infrastructure. Investors benefit from government incentive programs, such as tax breaks and logistical support across the entire industrial zone.
• Industrial Parks (IPs): Provide more direct benefits tailored to individual investors. Both national and local governments frequently offer specific incentives, such as corporate income tax exemptions in the initial years, reduced land rental costs, and access to a skilled workforce trained at nearby vocational institutions.

Application Scope: Planning and Project Implementation

• Industrial Zones (IZs): A broader concept encompassing multiple interconnected industrial areas developed as part of national economic strategies. Each industrial zone is typically part of a long-term industrialization and modernization plan.
• Industrial Parks (IPs): More specific and localized entities within industrial zones. Each industrial park is planned and developed to cater to specific industries or production activities, optimizing land use and infrastructure efficiency.

Industrial parks have been and continue to create numerous jobs for workers.

Current Status of Industrial Parks and Industrial Zones in Vietnam

As of July 2024, Vietnam has 431 industrial parks (IPs) and export processing zones (EPZs), with 301 already in operation, attracting significant foreign direct investment (FDI). Industrial parks play a crucial role in economic growth and national revenue. The eco-industrial park (EIP) model, aimed at sustainable development, is being implemented in localities such as Hai Phong, Dong Nai, and Ho Chi Minh City [5].

Industrial parks and economic zones have become key destinations for major multinational corporations such as Samsung, LG, Canon, Foxconn, and Lego, contributing to job creation, enhancing competitiveness, and accelerating industrialization and modernization [6].

In the first seven months of 2024, FDI in Vietnam’s manufacturing sector increased by 15.7% year-on-year, reaching $12.65 billion. According to VnDirect, the FDI environment will continue to improve due to competitive costs and infrastructure enhancements. The industrial land supply in both the northern and southern regions is expected to meet demand for the next 4–5 years, with major projects such as Tien Thanh Industrial Park, Trang Due 3 (in the North), and Nam Tan Uyen Industrial Park, VSIP 3 (in the South) [7].

These developments highlight the strong growth potential of Vietnam’s industrial parks and industrial zones.

Government Strategy for the Development of Industrial Parks and Industrial Zones in Vietnam

Vietnam’s industrial development strategy through 2035 focuses on sustainable growth, aiming for an annual industrial production value increase of 10.5–12.5%, with high-tech industries contributing over 50% of GDP. Priority sectors include manufacturing and processing, electronics, renewable energy, and green industrial planning, alongside enterprise support and strengthened international cooperation [8].

Vietnam is committed to developing sustainable industrial parks to achieve its net-zero emissions target by 2050, aligning with the National Green Growth Strategy and international commitments. Net-zero emissions mean balancing emitted greenhouse gases with equivalent absorption, ensuring no overall increase in atmospheric emissions [9].

The Vietnamese government is actively formulating new policies to promote the development of eco-industrial parks (EIPs), offering investment incentives for green projects.

The Ministry of Planning and Investment (MPI) has proposed a new draft law to develop large-scale eco-industrial parks, attracting high-quality investments in digital economy sectors, green industries, semiconductor manufacturing, and advanced materials. This draft law includes tax reductions and streamlined administrative procedures [10].

However, the development of EIPs still faces regulatory challenges. Pilot EIP projects have successfully reduced energy consumption and CO₂ emissions, and the government is working to expand these initiatives with international support. The circular economy and sustainable industrial development models will be key priorities between 2024 and 2028.

Additionally, the government is introducing incentives to promote key industries such as electronics, renewable energy, and artificial intelligence (AI).

Orientation towards developing eco-industrial parks with incentives for green investment.

Potential of Industrial Parks and Industrial Zones in Vietnam

Attracting High-Quality FDI in Manufacturing and Processing

The development of industrial parks (IPs) provides significant benefits to the manufacturing and processing industries, particularly through high-quality foreign direct investment (FDI) projects.

Industrial parks offer several advantages, including strategic locations near seaports and raw material sources, preferential policies for new enterprises, and strong support from local authorities.

Additionally, industrial parks play a crucial role in boosting Vietnam’s export growth, particularly in electronics, textiles, footwear, and machinery, helping diversify the country’s export markets.

Moreover, industrial parks are key drivers of Vietnam’s export growth, infrastructure development, foreign investment attraction, and improved living standards for local communities. A notable example is the industrial parks in Ho Chi Minh City, which generate $7 billion in annual exports and provide employment for over 281,000 workers [11].

Enhancing Competitiveness and Innovation in Domestic Industries

Industrial parks and export processing zones play a vital role in improving competitiveness and fostering innovation in Vietnam’s industrial sector. By attracting FDI projects, facilitating technology transfer, and encouraging business collaboration, industrial parks help increase productivity and enhance product quality.

Furthermore, resource-sharing, knowledge exchange, and collaboration among businesses within these zones help optimize costs, improve operational efficiency, and create higher-value products. Thanks to these factors, Vietnam has significantly improved its competitiveness and innovation rankings in recent years, and industrial parks will continue to be key drivers of industrial growth in the future.

Job Creation and Improved Living Standards

Job creation and improved living conditions for workers in industrial parks and export processing zones are top priorities for the Vietnamese government. Support policies such as social housing, low-interest credit loans, and access to cultural and sports services have helped enhance the quality of life for workers [12].

As of now, there are 253 worker housing projects covering approximately 600 hectares of land. Among them, 112 projects have been completed, accounting for 41% of the total land area [12].

However, challenges remain in meeting the infrastructure and social needs of workers, requiring cooperation from businesses, labor unions, and local authorities.

Conclusion

Industrial parks and industrial zones in Vietnam are continuously expanding, becoming key drivers of innovation and economic growth. With strategic development policies and strong government support, these zones have great potential to create attractive investment opportunities and drive the transformation of Vietnam’s industrial sectors in the coming years.

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