Many companies are moving their factories from other countries to Vietnam, showing the potential for strong development of industrial real estate, according to Vietnam+.
They included many factories from China operating mainly in the fields of electronics, textiles, footwear and spare parts production, such as Hanwha, Foxcom, Lenovo, Nintendo, Sharp among others.
Related: Formation of foreign company in Vietnam
The industrial sector is growing strongly with a tenfold increase in foreign direct investment (FDI) over the last decade. Good land supply is facilitating incoming manufacturing projects and the rise of rental options with ready-built factories (RBF) and built-to-suit (BTS) solutions. Vietnam must be more selective with projects to move up the value chain, improve competitiveness and ensure sustainable growth.
Low labour costs and government incentives, particularly preferential tax rates, will continue to be critical drivers of FDI. However, to maintain the transition to higher-value industries, Vietnam must focus on the quality rather than the number of investments.
By enabling the latest production technologies and increasing workforce training, the government is actively easing qualms around viability, labour shortages and rising costs for a more transparent business environment.