Ho Chi Minh City is known as the leading economic hub in Southern Vietnam as well as the whole country. To promote investment in this area for stronger development, the role of industrial parks, export processing zones and high-tech parks is indispensable.
Industrial parks include export processing zones, auxiliary industrial areas, eco-industrial parks, which are areas that are enclosed by definite boundaries. These areas specialize in the production of goods and services fulfilling the industrial needs and are established in conformity with conditions, procedures and processes prescribed in ‘Decree 82/2018/ND-CP’. In these areas, the government grants incentives to attract investment from domestic and foreign investors. However, investors need to consider many factors before investing in these areas. Therefore, this article shall analyze the characteristics and advantages of high-tech parks, export processing zones and large industrial zones in HCMC for investors to have an overview before investing in projects in such areas.
1. Hiep Phuoc Industrial Park
Hiep Phuoc Industrial Park is considered as one of the leading industrial zones in HCMC. It was established in 1996 by Hiep Phuoc Industrial Park joint stock company and is located in Nha Be district, Ho Chi Minh City.
Scale of the park
The total planning area is expected to be 2,000 hectares, deployed in three phases. Currently, this industrial park has gone through 2 phases with a total area of 1,686 ha, of which the available land area for lease until 2019 was 195.35 hectares. This is the priority area for the development of the city port industry.
In terms of geographical location
Hiep Phuoc is the largest industrial park in Ho Chi Minh City. It is located strategically, 15km from the city center, 21km from Tan Son Nhat international airport, only 1km from the nearest seaport ‘Tan Cang Hiep Phuoc’ and other international seaports such as ‘Saigon Central International Container Port’ and ‘Saigon Port – Hiep Phuoc’.
Business lines and investment attraction
Currently, ‘Hiep Phuoc Industrial Park’ prioritizes high-tech industries and clean production, which belong to key business lines of the city and help in limiting pollution. They include:
- Information technology and telecommunications;
- Precision mechanics and automation, robotics;
- Biotechnology applied in the fields of agriculture, health and environment;
- Renewable materials, nanotechnology, and new energy.
Hiep Phuoc is especially the sole industrial park in Ho Chi Minh City with a natural gas (NG) distribution station leading from Vung Tau province supplying power to Hiep Phuoc Power Plant and clients needing power in this area.
Services in the industrial park
For land lease, the current land rental price is 3,185,000 VND/m2, equivalent to USD 140 /m2 for a lease term of 41 years, of which the minimum rental area is 5000m2.
In addition, Hiep Phuoc Industrial Park also leases ready-built factories should investors require these. Factory/office rent is 113,750 VND/m2, equivalent to USD 5 /m2.
Incentives for investors
For new investment projects in Hiep Phuoc Industrial Park, corporate income tax incentives are applicable by which tax is exempted for the first 2 years, and reduced by 50% for the next 4 years from the date of registration. Tax incentives begin from the first year in which taxable income was earned from an investment project.
Some enterprises operating in Hiep Phuoc Industrial Park
Including Siam City Cement (Vietnam) Limited, Indo-Trans Keppel Logistics VN Co. Ltd., Meizan CLV Co. Ltd., Kondo Vietnam Co. Ltd., and Honda Logicom Co. Ltd. (Vietnam).
Thus, Hiep Phuoc Industrial Park is one of the best options for investors to invest in high-tech business lines and import and export activities by sea because of its wel equipped infrastructure and favorable geographical location.
2. Le Minh Xuan Industrial Park
Le Minh Xuan Industrial Park has a total project area of about 100 hectares. It is a concentrated industrial park of Ho Chi Minh City which was established in 1997 by Khang Phuc House Business Investment Company Limited (BCCI).
This industrial park is in the western part of Ho Chi Minh City, along the border with Tan Nhut commune and Le Minh Xuan commune in Binh Chanh District. It is about 18 kms away from the city center, 8 kms from concentrated residential areas, 6 kms from National Highway 1A, and 18 kms from Tan Son Nhat International Airport and Saigon International Port.
Since this industrial park is far from residential areas, it is suitable for the fields like textiles, dyeing, plating, garment industry, leather shoes, processing industry, mechanical engineering, etc. Activities in this area include:
- Leasing land to build factories
- Transferring land-use rights to domestic and foreign investors
- Providing banking and healthcare services, etc.
The infrastructure system of this industrial park is complete.
Investors are entitled to a tax exemption for 2 years and in some cases a further 50% reduction in tax payable for the further 4 years.
Enterprises operating in this industrial park
Including Bray Controls Vietnam Co. Ltd., Hung Man Garment & Wash Co. Ltd., Jin Kyong Vietnam Co. Ltd., Osaka Paint Company Limited, and Phu Thuan Garment Private Enterprise.
Although the infrastructure in the industrial park has been completed on a scale of 100 hectares and was established long time ago, the park has run out of leased land area. Therefore, if the investor wishes to carry out investment activities in this area, it is necessary to ask the Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA) if any land is available for lease before starting the project.
3. Tan Tao Industrial Park
Scale of the industrial park
Tan Tao industrial park has a total acreage of 343.9 hectares, divided into two areas – an existing industrial park with an acreage of 161.35 hectares, established in 1996, and an extended industrial park with an acreage of 182.55 hectares, established in 2000. It is located in Tan Tao A Ward, Binh Tan District, Ho Chi Minh City and was established by Tan Tao Investment and Industry Joint Stock Company (ITACO).
Location and transportation infrastructure
Tan Tao Industrial Park is only 3.5km from National Highway 1A and Saigon (Trung Luong Expressway) and only 12 km from the city center and 15km away from the nearest seaport (Saigon port).
In terms of infrastructure
This industrial park has a complete infrastructure system and a full internal transportation system, electricity, water and wastewater treatment system. Therefore, the land rental price ranges from USD 220-260 /m2 for a minimum leased area of 3000 m2 and lease term until 2047 (for existing industrial park) and 2050 (for extended industrial park). Thus, this industrial park is an attractive area for investment driving the economy of the northwest region.
There are three main groups of business lines that are prioritized for investment in this industrial park:
- Mechanical, electronic and electrical industry;
- Food, agricultural products and aquatic products processing;
- Chemical, cosmetic and pharmaceutical products processing.
In general, Tan Tao Industrial Park is considered the most successful industrial park in Ho Chi Minh City. It has a very high occupancy rate, with the latest statistics showing that this area currently has no land available for rent, hence investors should find out the right details before investing in this area.
4. Tan Phu Trung Industrial Park
Scale of the park
Tan Phu Trung Industrial Park is one of the largest industrial parks in Ho Chi Minh City. It was established in 2003 with a total acreage of 543 hectares and is located in Tan Phu Trung commune, Cu Chi district, Ho Chi Minh City.
This industrial park is 25 km from the center of Ho Chi Minh City, 15 km from Tan Son Nhat International Airport, and 27 km from Saigon International Port. Traffic to this area is extremely favorable because it is located near National Highway 22, National Highway 1A and provincial road 8 connecting the economic triangle region of Long An, Binh Duong and Ho Chi Minh City.
Tan Phu Trung Industrial Park is convenient for investors to implement projects related to:
- Electricity and electronics;
- Information technology;
- Medical equipment;
- and other eco-friendly business lines.
Products and services in the industrial park
Including land leasing and factory/office leasing. The land rental price is 2,310,000 VND/m2/year, equivalent to USD 94 /m2. The lease period is 50 years, until the end of December 16, 2054 with a minimum rental area of 2 hectares. Currently, the area available for rent in Tan Phu Trung Industrial Park is 50 hectares.
Investment activities in Tan Phu Trung industrial park are exempt from CIT for 2 years , which can be reduced by 50% for the further 4 years for investors implementing new projects.
Some enterprises operating in this industrial park
Including Dashi Lab Co. Ltd., Viet Dung Aluminum joint stock company, Nippon Paper Viet Hoa My joint stock company, Thai Duong Rubber Technology joint stock company and Omega Pharma joint stock company.
Accordingly, with competitive advantages in terms of scale, facilities and available land acreage for lease, Tan Phu Trung Industrial Park is an outstanding choice for those wishing to invest in this area.
5. Dong Nam Industrial Park
Dong Nam Industrial Park was established in 2008 with a total acreage of 342.53 hectares, located on the main road between Binh My commune and Hoa Phu commune in Cu Chi District, Ho Chi Minh City.
The distance from this industrial park to Binh Duong province is only 1km. It is also 10km from Xuyen A road, 25km from Phuoc Long ICD port and 25km from the city center.
This industrial park prioritized efficient high-tech activities and environmentally friendly clean technology in sectors such as:
- Information technology
- Food and beverage;
- Furniture production;
- Sports equipment production, etc.
Land rental price
Dong Nam Industrial Park applies a rental price of USD 70 /m2 with a minimum rental acreage of 5,000 m2, and rental period until December 29th, 2058. At the time this article was written, the land available for rent is 15 hectares.
Dong Nam industrial park has a complete system including Tan Quy power station, Binh Duong water plant and wastewater treatment system with a designed capacity of 10,000 m3/day and night and 15,000 m3/day and night.
In general, the strategic location of Ho Chi Minh City and Binh Duong province, well-connected waterway and road transport systems, and abundant labor force, this industrial park is a great choice for investors.
Some businesses operating in Dong Nam Industrial Park
Include Japan Plus Vietnam Co. Ltd., Vietnam Milk joint stock company, Von Ardenne Vietnam Co. Ltd, Sheico Vietnam Co. Ltd., and Worldon (Vietnam) Co. Ltd.
Find out Part 2 of series Overview of industrial parks, export processing zones and high-tech parks in Ho Chi Minh City at [Link]