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Viet Nam
Industrial Park Situation
Text by Saito Hiroshi
Cities Eager to Accept FDI (Foreign Direct Investment) - Haiphong City
This time, we will introduce the situation in Haiphong City, a northern port town where special preferential tax policies are applied.
1. Location / Area / Population
Haiphong City is located at the mouth of the Red River, approximately 102 km east of Hanoi. It covers an area of 1,523 square kilometers and has a population of about 2.09 million, making it the third largest city after Ho Chi Minh City and Hanoi.
Many owners of small to medium-sized manufacturing companies in Japan tend to think from an optimistic perspective. However, when Vietnamese individuals return to their hometowns, they are often influenced by negative associates who may lead them astray. Even if they initially have no intention of engaging in wrongdoing, many can easily be swayed, so it is risky to place too much trust in them.
2. Industrial Zones in Haiphong
Currently, Haiphong City has 10 industrial zones:
1. Deep C Industrial Zone
Nomura Hai Phong Industrial Zone
VSIP Hai Phong Industrial Zone
Trang Due Industrial Zone
Nam Cau Kien Industrial Zone
Do Son-Hai Phong Industrial Zone
An Duong Industrial Zone
Nam Dinh Vu Industrial Zone
Vinashin-Shinec Industrial Zone
Trang Cat Industrial Zone
3. Characteristics of Haiphong City
Haiphong City is one of the centrally governed cities alongside Hanoi and Ho Chi Minh City, and it is the largest port city in northern Vietnam. Haiphong Port is among the largest ports in the country, operating direct routes to countries in Southeast Asia and East Asia. Cat Bi International Airport, located within the city, hosts international flights from Jetstar Pacific (to Macao), VietJet Air (to Bangkok), Donghai Airlines (to Shenzhen, China), and RuYi Airlines (to Kunming, China).
Manufacturers based in Haiphong City enjoy significant benefits. In other industrial zones, corporate tax incentives are often described as “2免4減” (2 exemptions and 4 reductions), where the corporate tax is exempt for the first two years and halved for the next four years (from the usual 20% to 10%). However, in Haiphong City, the incentives are “4免9減” (4 exemptions and 9 reductions), meaning that corporate tax is exempt for the first four years and halved for the following nine years.
4. Japanese manufacturing and logistics companies operating in the area.
Major Japanese manufacturing companies operating in Haiphong City include Kyocera, Fuji Xerox, and Paloma (in VSIP Haiphong Industrial Park); Bridgestone, Nippon Express, and Yusen Logistics (in Deep C Industrial Park); as well as Kokuyo and Yazaki Corporation (in Nomura Haiphong Industrial Park).
5. Living Environment
1. Housing Situation: In Hai Phong City, there are many foreign-invested industrial parks (from Japan, Belgium, Singapore), resulting in a variety of service apartments and standalone properties available for foreigners. Additionally, there are Japanese hotels such as Hotel Nikko Hai Phong and Toyoko Inn, providing options for stays until suitable housing is found. The Singaporean-owned Somerset also has locations in Hanoi and Ho Chi Minh City and is a popular choice for foreign service apartments.
2. Restaurant Situation: There are not many Japanese restaurants in Hai Phong yet, but the restaurants in the aforementioned Japanese hotels, such as ‘Ko Hai Phong’ and ‘Tannbouzu’ (located inside Azuma Hai Phong), offer high quality.
3. Shopping Situation: In December 2020, ‘AEON Mall Hai Phong Le Chan’ opened as the sixth AEON Mall in Vietnam, featuring 190 stores and becoming the largest shopping mall in Hai Phong. It includes the AEON supermarket, as well as globally recognized brands such as ‘CHARLES & KEITH,’ ‘Clarks,’ and ‘LACOSTE’ on the first floor. Additionally, popular Japanese-owned restaurants like ‘Pizza 4P’s’ and ‘Marugame Seimen’ are also located there.
6. Summary
Hai Phong City has the largest port in the country, and with the application of a special tax system known as ‘4 exemptions and 9 reductions,’ it allows for savings in logistics costs and corporate taxes. However, since 2017, the establishment of VINFAST, Vietnam’s first domestic car brand, which hired a large number of workers at higher-than-average wages, has resulted in slightly higher labor costs compared to other regions. Nevertheless, when assessed overall, the advantages are greater, leading to the expansion of existing industrial zones and a continuous increase in foreign companies entering the market.
齊藤公(Saito Hiroshi)
Business Advisor
G.A. Consultants Vietnam Co., Ltd
After graduating from university, he joined a PHP research institute and served as the head of the New York office. He then worked on the “Nagoya Port Redevelopment Project” at a subsidiary of the Chubu Nippon Broadcasting (CBC) company. He later shifted his base to Asia, where he was involved in the launch of “FM96.3” in Singapore, and the creation of “Hello Vietnam” and “Invest Asia” magazines in Vietnam. He then joined BW Industrial Development JSC, Vietnam’s largest rental factory development company, where he was responsible for attracting Japanese manufacturing companies. Currently, he is active as a consultant for the entry of Japanese companies at “G.A. Consultants”, one of the longest-standing Japanese HR consulting firms in Vietnam.
