Investment Conditions for Foreign Investors in Vietnam’s Industrial Parks in 2025

1. Overview of Foreign Investment in Vietnam’s Industrial Parks

Vietnam is rapidly becoming a hotspot for foreign direct investment (FDI), particularly within its industrial parks (IPs). These zones are crucial to the country’s economic landscape, contributing significantly to its growth trajectory.

By 2023, Vietnam had established 418 industrial parks spanning approximately 219,100 hectares. Out of these, 298 parks were operational, covering around 155,300 hectares. The impressive statistics speak volumes, with over 21,600 investment projects bringing in more than $318 billion in total capital. Specifically, 11,200 of these projects were foreign investments, accounting for around $212 billion.

Businesses operating in these industrial parks contribute to roughly 50% of Vietnam’s total export turnover and employ about 4.15 million people, predominantly in the Southeast region. Such figures underscore the importance of fostering a conducive investment environment to lure more high-quality projects in the coming years.

Importance of Understanding Investment Conditions

For foreign investors, grasping the nuances of investment conditions in Vietnam is vital. A thorough understanding of the economic, legal, political, and market dynamics significantly reduces risks while enhancing the potential for profit maximization. Financial literacy plays a crucial role in this process, enabling investors to evaluate risk adequately, select appropriate investment instruments, and manage their assets wisely. Ignorance of these conditions can lead to costly missteps, jeopardizing investment aims.

2. Legal Framework for Foreign Investment

Key Legal Documents

Understanding the legal landscape is crucial for any foreign investor. Important legal documents governing investments in Vietnam include:

• Investment Law 2020 and its guiding decrees (Decree 31/2021)
• Enterprise Law 2020
• Decrees concerning investment incentives in industrial parks.

3. Specific Investment Conditions

3.1 Minimum Capital Requirements

As of 2025, Vietnam outlines various conditional business sectors, as noted in Appendix IV of the Investment Law, each requiring different minimum capital investments. For instance:

1. Security Services:

   • Minimum capital: VND 1 billion.
   • Investment must only be utilized for machinery and technical equipment related to security.

2. Airport Business:

   • Domestic airport enterprise: Minimum capital of VND 100 billion.
   • International airport enterprise: Minimum capital of VND 200 billion.
   • Foreign equity ownership is capped at 30%.

3.2 Permitted Investment Sectors

Vietnam prioritizes several industries within its industrial parks:

• Supporting Industries: Manufacturing components for key sectors such as electronics, automobiles, and textiles.
• High-Tech Industries: Innovations in information technology, telecommunications, and biotechnology.
• Processing & Manufacturing: Including food processing, mechanical engineering, and medical devices.
• Smart Energy: Renewable energy solutions aimed at environmental sustainability.

3.3 Prohibited Investment Sectors

Investment is restricted in certain areas under Article 6 of the Investment Law, which includes:

• Drug-related businesses
• Hazardous chemicals and minerals
• Trading of endangered flora and fauna
• Prostitution-related ventures
• Human trafficking and cloning activities

Furthermore, new prohibitions will take effect from July 1, 2025, expanding the scope of restricted sectors.

4. Environmental Requirements

Conducting an environmental impact assessment (EIA) is mandatory for certain projects. Key requirements involve:

• The project investor must perform the assessment, either independently or via a qualified consultant.
• The EIA should occur during the preparation of the project’s feasibility study.
• A comprehensive report detailing the environmental impacts must be submitted.

Specific project types that require an EIA are classified as Group I or Group II projects under the Law on Environmental Protection.

5. Investment Registration Process

Step 1: Prepare Investment Documents

Investors must compile a full set of documents, including:

• Legal enterprise documents
• Investment project documents
• Financial capability statements
• Land use rights documentation (if applicable)
• Technology used in the project (if technology appraisal is necessary)
• Additional documents as legally required.

Step 2: Identify a Suitable Industrial Park and Negotiate

Selecting the right industrial park requires negotiations with the infrastructure company regarding:

• Location
• Area
• Utilities
• Pricing and payment methods

Step 3: Submit the Application to the Competent Authority

Investors need to submit their applications to the appropriate entity:

• The Department of Planning and Investment in the relevant province.
• Alternatively, for projects near high-tech zones, submissions might go to the site’s Management Board.

Step 4: Issuance of Investment Registration Certificate

The final step involves receiving the investment registration certificate. Depending on the type of project, investors must provide requisite documents, with a processing window of approximately five working days.

For comprehensive insights on foreign investment procedures within Vietnam’s industrial parks, consult the detailed guide here.