Vietnam Attracts Foreign Manufacturers with Incentives
Vietnam has become one of Asia’s most attractive destinations for export manufacturing, drawing foreign investors with its competitive costs, free trade agreements, and access to major global markets. In 2025, the country’s export turnover reached $475 billion, a 17% increase from the previous year, with manufacturing and processing accounting for nearly 89% of that total.
Two paths to export manufacturing
Companies establishing export-focused operations in Vietnam can select between two structures: an Export Processing Enterprise (EPE) or a standard manufacturing company. Each provides different benefits in incentives, compliance, and operational freedom.
EPEs receive broader customs and value-added tax advantages but must meet stricter facility and customs supervision requirements.
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Standard manufacturers face fewer restrictions. While they do not qualify for the same tax incentives, they avoid ongoing customs oversight and periodic inspections. This model suits smaller or labor-intensive operations better, allowing faster project execution.
Logistics shape site selection
Vietnam’s export manufacturing hubs divide into two key regions. Northern Vietnam, centered on Lach Huyen Port in Hai Phong, offers strong connections to China and Northeast Asia. The port is the largest deep-water facility in the north, linking to major shipping routes across Asia, the Americas, and Europe.
Southern Vietnam, with Cai Mep–Thi Vai Port in Vung Tau, serves as the main gateway for exports to the U.S. and Europe. The port handles the largest container vessels globally. Air freight also plays a key role, with Noi Bai International Airport in Hanoi processing 729,000 tons of cargo in the first nine months of 2025. Tan Son Nhat International Airport in Ho Chi Minh City remains the country’s busiest.
Overland corridors further improve connectivity. Three expressway networks connect northern manufacturing hubs to China’s border gates, while two corridors link southern provinces to Cambodia. Industrial clusters in Quang Ninh, Hung Yen, Bac Giang, Hai Duong, and Hanoi lead northern production. In the south, Dong Nai, Long An, Tay Ninh, and Ho Chi Minh City dominate.
Related: Top 5 best practices in collection strategy
This infrastructure has helped Vietnam integrate into global supply chains, serving markets like the U.S., EU, China, Japan, and South Korea. However, as global markets increasingly prioritize sustainability and supply chain transparency, export manufacturers in Vietnam will need to complement cost advantages with investments in technology, compliance, and green production capabilities.
For investors, choosing between an EPE and non-EPE structure requires evaluating more than tax benefits. Operational flexibility, logistics, facility suitability, and long-term goals all matter. A well-informed decision, supported by local market studies and tailored location assessments, can determine whether an operation succeeds or struggles to adapt.
Companies must also consider collection strategies to maintain cash flow. Effective practices in this area can prevent disruptions and ensure smooth operations.
