With its rapidly growing economy and strategic location in Southeast Asia, Vietnam has become a magnet for foreign investors, especially in the industrial real estate sector. As 2025 approaches, understanding the legal policies and investment conditions for industrial parks is essential for foreign businesses aiming to enter or expand in the Vietnamese market.
Overview of Foreign Investment in industrial real estate in vietnam
As of the end of 2024, Vietnam had approximately 430 industrial parks and export processing zones, with around 300 already in operation, covering a total area of about 89,200 hectares (1). The average occupancy rate across these zones exceeded 80%, with Northern Vietnam reaching approximately 80% and Southern Vietnam achieving about 89%.(2)
By the end of the first quarter of 2024, Industrial parks and economic zones have attracted over 10,400 domestic investment projects and over 11,200 valid FDI projects, with total registered investment capital of over VND2.54 trillion and USD231 billion, respectively. FDI capital in industrial parks and economic zones accounts for about 35 – 40% of the total registered FDI capital increase of the whole country in recent years.(3)
As global supply chains shift, Vietnam continues to attract attention for its strategic location, competitive labor costs, and expanding trade networks. This has positioned industrial real estate as a promising sector, especially for manufacturing and logistics investments.
For foreign investors, understanding regulatory frameworks, infrastructure readiness, and market trends is essential to making informed and effective investment decisions in this rapidly evolving sector.
Legal Framework for Foreign Investment (4)
Vietnam’s legal framework for foreign investment is structured to ensure transparency, stability, and investor protection. The Investment Law 2020, along with Decree No. 31/2021/ND-CP, outlines the key procedures, conditions, and incentives for foreign investors entering the Vietnamese market. This includes market access requirements and investment registration processes.
Complementing this, the Enterprise Law 2020 governs the establishment and operation of businesses, applying to both domestic and foreign investors with equal rights and obligations.
To attract investment into industrial parks (IPs), Vietnam provides several incentive policies. Decree 218/2013/ND-CP, amended by Decrees 12/2015/ND-CP and 91/2014/ND-CP, offers corporate income tax incentives. Decree 134/2016/ND-CP provides export tax incentives for eligible businesses. Additionally, Decree 103/2024/ND-CP introduces land-related incentives, including exemptions or reductions in land lease fees for IP projects.
Together, these legal documents form a solid foundation supporting foreign direct investment, particularly in Vietnam’s industrial real estate sector.
Specific Investment Conditions
A. Minimum Capital Requirements
Vietnam currently regulates around 228 conditional business sectors, many of which impose minimum capital requirements to ensure financial capacity and regulatory compliance. These requirements vary depending on the nature and scale of the business. For instance, companies providing security services must have a minimum charter capital of VND 1 billion. In more capital-intensive sectors such as airport operations, the required minimum is significantly higher—VND 100 billion for domestic airport businesses and VND 200 billion for those operating at international airports. These capital thresholds help safeguard market stability and promote serious, long-term investment commitments.
B. Permitted Investment Sectors
Vietnam encourages foreign investment in industrial parks (IPs) through a focus on priority sectors that align with national development goals. Key sectors include supporting industries, such as the production of components for electronics and automobiles; high-tech industries, including information technology and biotechnology; and processing and manufacturing, with areas like food processing and medical equipment gaining attention. Additionally, smart energy, particularly renewable energy production, is strongly promoted as Vietnam shifts toward a more sustainable industrial base. These sectors benefit from various incentives and streamlined investment procedures to attract long-term capital and technology transfer.
C. Prohibited Investment Sectors
According to Article 6 of Vietnam’s Investment Law, foreign and domestic investors are strictly prohibited from engaging in certain business activities deemed harmful to society, public safety, or national heritage. These include operations related to narcotics, hazardous chemicals and minerals, wildlife trafficking, prostitution, human trafficking, cloning, fireworks trading, and debt collection services. Additionally, starting from July 1, 2025, the government will enforce further restrictions, including bans on the trading of national treasures and the export of artifacts and antiques. These measures are designed to protect public order, national security, and cultural heritage while ensuring sustainable and ethical investment practices.
Environmental Requirements
Under Vietnam’s Law on Environmental Protection 2020, certain investment projects are required to conduct an Environmental Impact Assessment (EIA) to ensure that potential environmental risks are identified and mitigated early. The EIA must be carried out during the feasibility study phase and submitted in the form of a detailed report for evaluation by the authorities. This requirement primarily applies to Group I and Group II projects, which are typically large-scale or have significant environmental implications. However, emergency public investment projects are exempt from this obligation. The EIA process reflects Vietnam’s commitment to sustainable development and responsible industrial growth.
Investment Registration Process
Step-by-Step Process for Investing in Industrial Parks in Vietnam
Step 1: Prepare Investment Documents
Investors must compile and submit a complete set of documents, including:
- Legal registration documents of the investing entity
- Investment project proposal
- Proof of financial capacity
- Documentation related to land use rights
- Technology descriptions (if applicable)
- Other supporting materials required by law
Step 2: Select an Industrial Park and Negotiate Terms
Identify a suitable industrial park (IP) based on strategic location, infrastructure, and industry fit. Investors then negotiate directly with the IP infrastructure developer on land availability, utility connections, rental prices, and payment terms.
Step 3: Submit Investment Application
The investment registration dossier is submitted to the Department of Planning and Investment in the province where the project will be located. For projects situated in high-tech zones, the application must be filed with the High-Tech Zone Management Board.
Step 4: Obtain the Investment Registration Certificate (IRC)
Upon approval, the competent authority will issue the Investment Registration Certificate (IRC) within 5 working days, officially allowing the project to proceed.
Vietnam presents a promising environment for foreign investors in industrial parks thanks to its preferential policies and transparent legal framework. However, investors must ensure compliance with all conditions to maximize project success and sustainability.
Source:
(1). Vir
(2). Vietnam Briefing
(3). Viet Data
(4). Vietnamese Law