Where to invest in Vietnam? Episode 3 – Dong Nai Province
Vietnam in the recent years has become an appealing location for foreign investors mostly due to its advantages such as low labor cost, high economic growth and stable social and political environment. One of the first steps for the foreign investors when making a go-to decision in Vietnam is to answer the question of where to invest? In more specific, which provinces and cities provide the most suitable conditions for the investment such as favorable location, sufficient development of infrastructure, cost advantages, labor availabilities and so on? To answer this question, Access Vietnam shares our research and insights about provinces and cities of Vietnam in different articles with each episode focusing on one particular province/city. In this episode, we will shed the light on Dong Nai province, which was regarded as one of the most developed industrial areas in the South of Vietnam.
Where is Dong Nai and why should I invest in Dong Nai?
Dong Nai province is located in the South of Vietnam and belongs to the Southern Key Economic Zone, which is one of the most active economic development areas of Vietnam. It is bordered by Ho Chi Minh city, Binh Duong, Binh Phuoc, Binh Thuan, Lam Dong and Ba Ria Vung Tau provinces.
Up until July 2018, Dong Nai province has attracted 1.335 FDI projects with the registered capital of approximately 30 billion USD. The first 9 months of 2018 alone contributed 1.3 billion USD which surpassed 130% of the whole year target. This result can be explained by different benefits that the province offer to the foreign investors.
1. An enormous supply of young and highly educated workforce
With approximately 2 million residential, Dong Nai is the second most populous province in the South, only after Ho Chi Minh City. The province has Bien Hoa city which is the most populated city in Viet Nam.
The province benefits from a young population with 68% of the residents are at their working age. The workforce is highly educated and familiar with the industrial works. This is resulted from a good access to a high quality education system. There are in total 82 educational facilities including 9 universities, 10 colleges, 13 middle level schools and 50 vocational centers in Dong Nai currently under operation. The ratio of trained labors per total employees is approximately 65% and ratio of vocational trained labors is 48%.
Sharing borders with Ho Chi Minh city and Binh Duong province, Dong Nai can also easily attract high skilled and qualified personnel from its neighborhood.
2. Favorable infrastructure
According to the Provincial Competitive Index (PCI) conducted in 2017 by The Vietnam Chamber of Commerce and Industry (VCCI), with the support from the United States Agency for International Development (USAID), Dong Nai was assessed as one of a few provinces that offered the most developed infrastructure in Vietnam.
Dong Nai has a well-developed transport system, including major national highways such as the National Highway (NH) No. 1A, NH 20, NH 51, NH 56 and the North-South railway. The province is of maximum 2 hours away from the international Cat Lai port and the international Tan Son Nhat Airport, which makes it very convenient for international exchanges. By end of 2019, a new international airport called Long Thanh will be built in Dong Nai. Upon completion, it will become the main air transport center in the South of Vietnam with an expected capacity of 100 million passengers and 5 million tons of goods per year.
Long Thanh airport project to be launched in 2019
3. Favorable geographic location
Unlike many provinces in the central of Vietnam, Dong Nai locates in an areas where it is rarely affected by natural disasters such as storm, flood or earthquake.
In terms of the local supply chain, Dong Nai is next to Ho Chi Minh city, Binh Duong and is close to Long An where most of the industrial parks in the South locate. Those city and provinces belong to the Southern Key Economic Zone and are home of more than 100 industrial parks with many local and FDI suppliers working in various areas.
What should I invest into Dong Nai?
Dong Nai province prioritizes projects from high-tech industries, supporting industries and in energy-saving, environmentally friendly projects. The production of hardware and software products are also highly welcomed.
In addition, Dong Nai also gives priority to projects in infrastructure development project such as building bridges, roads, seaports, logistic services, drainage system and wastewater treatment.
Depending on the area and the industrial park that the investors want to locate their factories, there will be different benefits applied such as tax incentives, land prices and labor cost. To learn more about which location is the most suitable for your business, please contact Access Vietnam for further information.
With all the above advantages and the benefits that the province offers, Dong Nai has attracted more than 1850 FDI projects with a total registered capital of 33.4 billion USD over the last 30 years, making it the top 3 province in Vietnam in terms of FDI attraction.
New investment projects in Dong Nai are mainly belonged to industrial production fields such as machinery and electronics components manufacturing, footwear and textile fibers. Countries that have many new investment projects over the years in Dong Nai include South Korea, Japan, Taiwan and China.
According to the evaluation of different MNCs and Consulate General in Ho Chi Minh City, Dong Nai is among the first group in attracting foreign investors who want to invest in the South of Vietnam.