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8 benefits of renting factories in Vietnam

May 09, 2024 09:07 AM

Factory lease in VietNam is not only a crucial strategic decision but also brings significant benefits to both domestic and international businesses. It not only helps optimize production processes but also flexibly meets the demand for business space. Convenient location when choosing a factory lease in VietNam Near China The Kim Thanh-Lao Cai border gate […]

Factory lease in VietNam is not only a crucial strategic decision but also brings significant benefits to both domestic and international businesses. It not only helps optimize production processes but also flexibly meets the demand for business space.

Convenient location when choosing a factory lease in VietNam

Near China

The Kim Thanh-Lao Cai border gate directly connects Vietnam with China

The Kim Thanh-Lao Cai border gate directly connects Vietnam with China

The border between Vietnam and China, with a length of up to 1,400km, has many large border gates, creating a vibrant and diverse trading landscape.

Vietnam not only connects with China by road but also by sea with many ports connecting the two regions. Both countries have modern seaports, making transportation of goods between the two countries convenient and efficient.

Vietnam's maritime system develops favorably for trading

Vietnam’s maritime system develops favorably for trading

Moreover, connectivity via railways and airways also plays an equally important role. Vietnam and China both have developed transportation systems, with many highways and international airports, reducing transportation time and costs, while enhancing flexibility in the supply chain.

The decision to rent factories in Vietnam, with its close proximity to China – the world’s leading economic center, through a diverse transportation system, not only helps businesses save transportation costs but also opens up opportunities to access a large and promising market.

Infrastructure Investment

Vietnam is currently a leading country in Asia in infrastructure investment, with spending reaching about 5.7% of GDP. The country is in the process of transitioning towards a high-income economy, and infrastructure development plays a crucial role in achieving this goal.

Vietnam leads Asia in physical infrastructure investment

Vietnam leads Asia in physical infrastructure investment

Significant investment (about 5.7% of GDP) in Vietnam’s infrastructure is evidence of a serious commitment to improving the national infrastructure system. Projects such as modern seaports, railways, and highways not only connect factories to manufacturing areas but also optimize transportation and logistics processes.

The challenge of developing infrastructure to achieve sustainable growth presents significant opportunities for businesses renting factories in Vietnam. By leveraging modern infrastructure systems, businesses will have an efficient and flexible working environment, minimizing risks and enhancing competitiveness in the international market.

Labor Force

ManpowerGroup’s 2022 Global Talent Index Report has ranked Vietnam 47th out of 60 labor markets worldwide, according to the group’s assessment. Additionally, Vietnam ranks last among 11 countries in the Asia-Pacific region, according to the list published.

Abundant and diverse labor supply in Vietnam

Abundant and diverse labor supply in Vietnam

According to ManpowerGroup, some factors attracting foreign direct investment (FDI) to the Vietnamese labor market in 2022 include a young and abundant labor force, low labor costs, and flexible visa policies. Vietnam currently has a large labor force, estimated at around 50.74 million people of working age. Generation Y and Z make up nearly one-third of the total, about 65%.

Possessing a young and diverse labor supply, amidst the aging population challenge faced by many countries, is one of the reasons why the Vietnamese labor market is highly regarded and attracts the attention of international investors.

Incentives

With an increasing number of domestic businesses, renting factories in Vietnam has become an extremely attractive option. In particular, Vietnam’s favorable geographical location not only provides ideal conditions for manufacturing and business operations but also significantly contributes to the development of this industry.

Therefore, the Vietnamese government has proactively implemented incentive policies to attract international businesses, enhance competitiveness, and elevate the domestic factory rental market to the international level. Information connectivity through maritime and road transport routes, coupled with a strategic location near the Chinese border, creates a dynamic and multidimensional business environment.

>>> See more: Important Factors to Consider When Renting a Factory in Vietnam

Time and Cost

Lower Initial Investment Costs

Choosing a factory lease in VietNam allows businesses to save a significant amount of investment

Choosing a factory lease in VietNam allows businesses to save a significant amount of investment

When deciding to build a new manufacturing facility, businesses must incur a large fee including land costs, construction materials, design drawings, infrastructure construction, and many other aspects. This implies the need to pay a large amount of upfront investment capital before production can begin. Moreover, the issues that arise during the operation of the factory are also a considerable challenge.

In contrast, opting to rent a manufacturing facility brings many benefits and significant cost savings. Businesses only need to pay rent, use support services, and some other expenses. This not only helps reduce the initial financial pressure but also provides flexibility and time savings for the business.

Operational Time Savings

The operating time of the business will be faster

The operating time of the business will be faster

The process of completing a new factory for businesses typically requires a significant amount of time. If there are complex legal or financial issues, this time can be further increased.

Therefore, choosing to rent a manufacturing facility helps to streamline all processes flexibly and efficiently. Businesses do not have to deal with many complex issues related to legal or financial matters, and they can start production quickly.

Support and Services

Support services are always emphasized by factory lessors in Vietnam

Support services are always emphasized by factory lessors in Vietnam

Another benefit business when choosing factory lease in Vietnam is the diverse support and services provided by factory lessors. These entities often have extensive experience and knowledge of the factory market, as well as related regulations and procedures. Therefore, they are capable of providing value-added services, including:

Market Updates

factory lessors typically have reliable and up-to-date information about the factory market in Vietnam, such as prices, quality, location, potential, trends, opportunities, and challenges. They can advise and assist businesses in choosing factories that fit their needs and budget, as well as provide suggestions and solutions to optimize factory usage efficiency.

Value-Added Services

In addition to providing factories, factory lessors also offer value-added services, such as assistance in obtaining permits, resolving legal issues, recruiting and training personnel, maintenance and repair of factories, providing equipment and infrastructure systems, security and protection, transportation and delivery of goods, along with other services as requested by customers. These services help businesses save time and effort, focus on their core activities, and improve productivity and quality of business operations.

>>> See more: Why Opt for a Factory with Integrated Office Space in Vietnam

Conclusion

Factory lease in VietNam is not only a cost-effective economic decision but also provides flexibility and convenience for businesses. Low investment costs, the ability to quickly adapt to production needs, along with the convenience of existing infrastructure are important factors in improving business performance. Choosing to rent factories in Vietnam not only quickly meets production needs but also is a wise strategy to optimize resources and reduce financial risks.

>>> See more: The Increasing Demand for Factory Rentals in Vietnam

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