If you are planning to establish a manufacturing facility or large-scale operation in Vietnam, your first instinct may be to look near Hanoi, such as Bac Ninh, or around Ho Chi Minh City, such as Binh Duong.

The reasoning is straightforward. These locations have mature industrial ecosystems, established supply chains, and experienced labor pools.

However, as Vietnam's manufacturing landscape continues to evolve, some investors are also exploring opportunities beyond the country's traditional industrial hubs.

One reason is that land costs, labor competition, and operational expenses have increased in many well-established manufacturing zones. Another is that certain investment incentive programs are often associated with projects located in specific economic zones and priority investment areas.

Understanding Vietnam's Tax Incentive Framework

Vietnam offers a range of Corporate Income Tax (CIT) incentives for qualifying investment projects.

Depending on factors such as project location, industry, investment scale, and regulatory eligibility, some projects may benefit from preferential tax treatment.

For eligible projects located in designated areas or sectors, incentives may include:

1. Up to 4 years of Corporate Income Tax exemption
2. Up to 9 subsequent years with a 50% reduction in applicable Corporate Income Tax
3. Preferential Corporate Income Tax rates for a specified period under applicable regulations

While these incentives can be significant, eligibility requirements vary and should be assessed on a project-by-project basis.

Why Some Investors Are Looking at Tier-2 Provinces

Several Tier-2 provinces, including Quang Ninh, Nghe An, and Thanh Hoa, have attracted increasing attention from investors evaluating long-term manufacturing strategies.

Beyond potential tax incentives, these locations may offer advantages such as:

1. More available industrial land
2. Lower operating costs in certain areas
3. Expanding transportation infrastructure
4. Access to ports, highways, and cross-border trade routes

As a result, some companies view these provinces as alternatives worth evaluating alongside Vietnam's traditional manufacturing centers.

Quang Ninh as an Example

Quang Ninh is often cited as a province that combines industrial development with strategic logistics connectivity.

The province benefits from:

1. Expressway connections to the Mong Cai border gate
2. Access to major transportation corridors linking Vietnam and Southern China
3. Deep-water port infrastructure that supports international trade

For manufacturers with supply chains connected to China, these logistical advantages may help support operational efficiency, depending on the nature of the business and product category.

Looking Beyond Convenience

Selecting a location in Vietnam is no longer simply a matter of finding the nearest industrial zone.

For many investors, the decision increasingly involves balancing factors such as:

1. Tax incentives
2. Labor availability
3. Infrastructure quality
4. Logistics efficiency
5. Long-term operating costs

While established industrial hubs continue to play an important role in Vietnam's economy, Tier-2 provinces are becoming part of the conversation for companies evaluating long-term expansion plans.

Note

Vietnam's investment incentives vary based on industry, project scale, location, technology classification, and applicable regulations. Investors should conduct project-specific assessments and seek professional advice before making investment decisions.