Factory for Rent in Vietnam: What Makes It Attractive to Foreign Investors?

Foreign investors are more and more looking forward to Vietnam for leasing industrial spaces. Having competitive labour costs, a strategic location and a conducive business environment, in Vietnam, there is a compelling argument for global customers who want to establish manufacturing facilities there. For foreign investors, the demand for a factory for rent in Vietnam has become more apparent as the country’s industrial sector grows.

We will discuss why choosing a factory for rent in Vietnam is a great option for foreign companies, focusing on the specific considerations that attract foreign investors.

1. Competitive Labor Costs and Skilled Workforce

Low labor costs of Vietnam vs. regional countries

According to foreign investors, the most important reason for choosing a factory for rent in Vietnam is the low labor costs. Despite being relatively cheap compared with other neighboring Asian countries, such as China and Thailand, Vietnam’s labor costs are still very competitive. This can be a relatively powerful way to reduce operating costs for foreign companies, providing a compelling competitive option for companies seeking to increase production at a low cost.

Availability of a Young, Skilled Workforce

Besides low pay, the Vietnamese labour force is big and has been growing continuously. The country’s young, dynamic labor force is famous for its degree of flexibility, will, and work ethic, which makes them a desirable option for foreign companies wishing to recruit in their factory for rent in Vietnam. A lot of workers in Vietnam have practical ability and specialized knowledge which helps foreign investors easily establish their operations in many fields, including electronics, textiles, and manufacturing.

Government Investment in Education and Vocational Training

The capacity of a skilled labor force is leveraged to a greater extent due to Vietnam’s commitment to making education and vocational training program better. Foreign investors searching for rent/furnishing factory for lease in Vietnam will have the advantage of increasing numbers of qualified personnel. Now the government still makes its investment in these programmes and thus a continuous supply of skilled operatives is available to cater to the requirements of both domestic and international companies.

2. Strategic Location for Global Trade

Proximity to Major Markets Like China and Southeast Asia

Due to Vietnam’s central position in Southeast Asia, it is the perfect country for companies to locate a factory for rent in Vietnam. The country’s proximity to major markets such as China, Japan, and other ASEAN nations gives it a competitive edge for businesses looking to serve these regions. Thanks to its strategic placement, supply chains can be accessed more easily leading to reduced shipping costs (and consequently shorter delivery times).

Extensive Coastline with Access to Major International Shipping Routes

Vietnam’s long coastline, stretching along the South China Sea, provides direct access to important international shipping routes. Ports, such as those in Ho Chi Minh City and Hai Phong, create important import and export access points that contribute to the country’s logistics infrastructure. Foreign companies looking to lease a factory for rent in Vietnam will find it advantageous to have a manufacturing plant near these major transport points, which will enable more efficient international trade.

Participation in Regional Trade Agreements (e.g., RCEP, CPTPP)

Vietnam’s participation in regional trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), further boost its attractiveness as a manufacturing hub. Through these agreements, foreign enterprises obtain lower tariff rates and more liberalised market access, so choosing a factory for rent in Vietnam is still more beneficial. Investors will be able to use these trade agreements to take advantage of opportunities to expand their global outreach.

3. Business-Friendly Policies and Incentives

Government Policies Encouraging Foreign Direct Investment (FDI)

Vietnam’s government has a strong interest in attracting foreign direct investment (FDI) by establishing a business environment conducive to FDI. Foreign investors can benefit from a range of incentives, including tax breaks and simplified processes for establishing and operating businesses. A factory for rent in Vietnam is a golden ticket for companies from abroad who want to enter this market and make use of that policy, establishing a strong position in the Southeast Asian region.

Tax Incentives and Reduced Tariffs in Industrial Zones

There are a great many industrial estates in Vietnam with tax breaks and lower tariffs for foreign investors. In particular, tax benefits, i.e., exemption or lower local company tax rate, can be available in certain situations in the early years of the operation of foreign companies. These allowances considerably increase the feasibility of factory rental in Vietnam, so that companies can make their profits and reduce their costs at the same time.

Streamlined Processes for Factory Rentals and Permits

Also in Vietnam, the procedures for the acquisition of the required authorization and licenses before using industrial spaces have been simplified. This is a crucial issue for foreign investors who want to save the delay of setting up their factories. The country has achieved significant improvements in terms of reforming ease of doing business that allows foreign investors to quickly and easily set up business in the country within a short period.

4. Diverse Industrial Zones and Infrastructure

Overview of Vietnam’s Modern Industrial Zones

Modern industrial zones in Vietnam are many and serve a diverse clientele. Foreign investors wishing to find a factory for rent in Vietnam can look at well-mature areas in Vietnam, which offer bon-built factories and a favourable business condition. These areas are tailored with a foreign company’s needs in mind, providing power outlets, waste management solutions, and so on.

Infrastructure Improvements: Highways, Ports, and Airports

Vietnam has made significant investments in infrastructure, including highways, ports, and airports, all of which play a crucial role in supporting the country’s industrial growth. The establishment of major transport infrastructures eases the movement of goods and raw materials of companies that rent factories in Vietnam. These improvements to the infrastructure are a clear advantage to foreign investors that can ensure their processes are fast and cheap.

Ready-Built Factories Cater to Diverse Industries

For foreign investors, the factory for rent in Vietnam can mean the selection of factory for lease space that is preexisting and adaption for the needs of a wide range of industries. These plug-and-play factories, with utilities and facilities built-in, are designed to be capable of production as soon as they arrive to bring production to a site. This ease of this convenience makes it easier to set up operations for foreign investors rapidly, and in very little time to set up.

5. Rising Demand for Sustainable and Green Factories

Trend of Sustainable Factories for Rent in Vietnam

As global environmental concerns grow, Vietnam is increasingly offering sustainable and green factories for rent. Investors to green production efforts could take advantage of the country’s increasing attention to environmental sustainability. Vietnam’s endeavour toward green manufacturing approaches is consistent with the worldwide, increasingly large, market for environmentally friendly production.

Incentives for Green Building Certifications and Renewable Energy

The Vietnamese authorities provide subsidies to companies using green construction certification and green energy technologies. Foreign companies seeking a factory for rent in Vietnam can access these benefits, which reduce operational costs in the long term and help them meet international sustainability standards. These tax subsidies are provided for the use of renewable energies (or for the construction of buildings that provide an environmental advantage).

Vietnam’s Commitment to Global Environmental Goals

Vietnam’s focus on sustainable development is reflected in policies designed to decrease carbon emissions and green manufacturing. Foreign investors know that warehouse or factory leasing in Vietnam is consistent with global environmental objectives. This commitment is also attractive to consumers who increasingly prefer eco-friendly companies and brands.

6. Growing Economic Stability and Market Opportunities

Stable Economic Growth Rate and Low Inflation

Vietnam’s economic growth has been remarkably stable over time, with continuous, low inflation. This is favourable for long-term investment for foreign investors. Renting a factory to be leased in Vietnam can be used to support a company to prosper in an economy that is both stable and robust, thereby guaranteeing the safety and profitability of any capital invested.

Expanding Local and Regional Market Opportunities

With a total population of more than 95 million people, Vietnam provides a large domestic market for foreign companies. Apart from this, the ongoing integration of the country into global trade networks creates further potential for targeting regional markets. For foreign investors, opting for a factory for rent in Vietnam can serve as a strategic base to tap into both local and international demand.

Political Stability as a Key Factor for Investors

The stability of the government in Vietnam is one reason why it is a good investment destination in Vietnam. In contrast to some of its neighbouring countries, Vietnam is characterized by a political stability that minimizes risks for companies wishing to sublease factories. This stability generates confidence in future investments and hence it is the most desirable for foreign investors.

Read more:

• Factory for Rent in Vietnam: Comprehensive Cost Analysis for Foreign Investors
• Factory for Rent in Vietnam 101: Top 5 Industries Benefiting the Most
• How to Choose the Right Factory for Rent in Vietnam for Small-Scale Production Startups

In conclusion, Vietnam offers a compelling package for foreign investors looking to rent a factory in the country. Despite the relatively low cost of labor and the highly skilled workforce, the advantages of strategic location and favourable business environment, Vietnam is still a leading destination for global manufacturing activities. With economic expansion and environmental challenges growing, finding a factory for rent in Vietnam has short-term wins and long-term potential for investors. Just contact us today for the best industrial locations for your business in Vietnam.

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

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