Vietnam: a strategic investment destination for global and Chinese groups

On November 7, the Shenzhen Digital Economy Industry Promotion Association hosted the “Exchange Global Enterprises - New Development Opportunities in Vietnam" event. This gathering brought together industry leaders and key stakeholders, including representatives from Vietnamese industrial real estate developer KTG Industrial.

The event provided a platform to discuss Vietnam's dynamic investment environment, focusing on opportunities in the electronics manufacturing sector, risks related to overseas laws and regulations, supply chain management, and customs services. Industry insiders also shared successful experiences of enterprises expanding globally, further underscoring Vietnam's growing prominence as an investment hub.

Vietnam has emerged as a premier destination for foreign investment, underpinned by a strategic combination of geographic, economic, and demographic advantages. Situated at the heart of Southeast Asia, Vietnam enjoys proximity to major Asian markets, including China, and seamless access to global trade routes, making it an ideal hub for both manufacturing and export-oriented industries.

The country’s youthful and dynamic population further enhances its appeal. With a median age of 30, a workforce that constitutes 70 per cent of its 100-million-strong population, and a rapidly expanding middle class, Vietnam offers a robust labour pool and a growing consumer base. These factors, coupled with rapid urbanisation, are driving domestic demand and creating significant opportunities for Chinese businesses.

At the event, the experts also believed that Vietnam’s active participation in multiple free trade agreements is another critical factor differentiating it from regional peers. Membership in agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the Regional Comprehensive Economic Partnership, and bilateral deals with the EU, South Korea, and Japan provide Vietnamese businesses with preferential access to major global markets. These agreements enable companies operating in Vietnam to benefit from reduced export tariffs, facilitating market expansion and improving competitiveness.

The FDI Regulatory Restrictiveness Index ranks Vietnam as the second-most open economy in the region, following Singapore, highlighting its favourable investment environment. Additionally, a competitive statutory corporate income tax rate of 20 per cent offers a significant cost advantage over markets like China, the Philippines, Malaysia, and Indonesia. These factors make Vietnam an increasingly attractive destination for multinational corporations and emerging enterprises alike.

“Vietnam’s relatively minor trade deficits with the US and its favourable position in Southeast Asia make it an essential destination for foreign investment,” said Koh Eng Meng, deputy director of Investment and Asset Management at KTG Industrial.

This positioning is supported by data from S&P Global Market Intelligence, which identifies Vietnam as a leading reshoring destination, even surpassing Mexico. A report titled “Reshoring Special Report: Vietnam Sees Strongest Reshoring-Related Growth Over Past Year", released in September, highlighted Vietnam's significant growth in reshoring-related sales, driven by domestic demand and exports. This trend aligns with the "China+1" strategy, as companies diversify production to mitigate geopolitical risks.

"Vietnam is poised not only to become a regional manufacturing centre but also poised to grow as a significant domestic consumer market fuelled by the growth of the middle income," Koh added.

Global corporations such as Samsung, Foxconn, and Intel have already established Vietnam as a leader in electronics manufacturing. Additionally, prominent Chinese electronics brands, including TCL, Haier, Midea, and Gree, have expanded operations in Vietnam, bringing high-quality products to market while stimulating the development of local supply chains.

Vietnam’s consumer electronics market is projected to reach $6.9 billion in revenue by 2024, with a compound annual growth rate (CAGR) of 2.16 per cent from 2024 to 2029, according to Statista. This growth, combined with the country’s proactive approach to infrastructure development and foreign direct investment, positions Vietnam as a top choice for businesses navigating an increasingly dynamic global landscape.

KTG Industrial: Diverse locations supporting global investors

KTG Industrial has positioned itself as a vital partner for foreign investors, offering a diverse portfolio of industrial projects across Vietnam. Its strategic presence in both the northern and southern regions caters to businesses seeking proximity to key markets, infrastructure, and supply chain networks.

KTG Industrial has positioned itself as a vital partner for foreign investors, offering a diverse portfolio of industrial projects across Vietnam. Its strategic presence in both the northern and southern regions caters to businesses seeking proximity to key markets, infrastructure, and supply chain networks.

Located in Dong Nai province, the Nhon Trach 2 project spans 18.69 hectares and is being developed in four phases. Phases 1 and 2 are nearly fully occupied, reflecting a strong demand for industrial spaces. Phase 4 marks a milestone with the introduction of KTG Industrial’s first double-storey factory, offering flexible configurations to accommodate diverse manufacturing needs.

Strategically situated just 35km from Ho Chi Minh City’s central business district and 25km from the upcoming Long Thanh International Airport, the project ensures seamless connectivity to trade routes. The surrounding Nhon Trach district, with over 2.1 million residents, offers a robust and skilled labour pool, making it an ideal location for companies expanding in southern Vietnam.

In northern Vietnam, KTG Industrial Yen Phong IIC in Bac Ninh province presents another compelling investment opportunity. Located 22km from Noi Bai International Airport and 34km from Hanoi, it is strategically positioned near industry giants like Samsung and Luxshare, making it an integral part of established supply chain ecosystems.

Phase 2 of the project offers state-of-the-art factories and warehouses for lease, with unit sizes ranging from 816-20,000 square metres. These facilities are designed to meet diverse industrial needs, from small-scale manufacturing to large logistics operations.

Scheduled for completion in Q1/2025, KTG Industrial Yen Phong IIC Phase 2 boasts facilities built to Singaporean standards, ensuring high reliability and efficiency. Investors also benefit from KTG Industrial’s comprehensive service offerings, including customised consultations and post-establishment support.

“KTG Industrial’s presence across Vietnam ensures we can cater to a variety of operational needs, whether companies seek proximity to Hanoi’s industrial centres or the economic hub of Ho Chi Minh City,” shared a KTG Industrial representative.

KTG Industrial, a prominent player in Vietnam's industrial real estate market, successfully showcased its offerings at Taitronic 2024. The event provided a valuable platform for the company to connect with potential clients from Taiwan, a major investor in Vietnam's manufacturing sector.

KTG Industrial, a leading provider of ready-built factories and warehouses in Vietnam, participated in the Vietnam Industrial Manufacturing Fair (VIMF) 2024, from November 6-8 at the Kinh Bac Cultural Centre in Bac Ninh province.

Vietnam may face challenges from increased trade scrutiny and protectionist policies under Trump’s administration, but the country's strategic position, resilient foreign investment flows, and role in supply chain diversification offer significant opportunities for continued economic growth.