Investing in Binh Duong – A Magnet for Investment in Southern Vietnam

Investing in Binh Duong – A Magnet for Investment in Southern Vietnam

Anne Do

Located at the center of the Southern Key Economic Region and sharing a border with Ho Chi Minh City, Binh Duong province is among the top three foreign direct investment (FDI) destinations in terms of the total capital (only after Ho Chi Minh City and Hanoi) and the fifth most competitive locality for doing business in Vietnam. The province has successfully attracted foreign investment and maintained economic growth despite the mounting impact of the pandemic in 2020-2021.

Economic Growth

Despite the low gross regional domestic product (GRDP) growth in 2020 due to COVID-19, Binh Duong's average annual growth rate from 2016 to 2020 was 8.7%. The industry and construction sector dominates the province's economy, accounting for 66% of the provincial total GDP.

Among over 180 countries and territories that have an import-export relationship with Binh Duong, the USA accounted for 66.4% of the export turnover, being the largest export partner of the province. Other important export markets include South Korea, Japan, and Taiwan. Export turnover in 2020 of Binh Duong was is estimated to reach US$27.4 billion, up by 8.5% compared to the previous year. Its main export products include textiles, footwear, wooden furniture, computers, and electronic products and components.

Import turnover in 2020 wasis estimated at US$21.5 billion, up 7.6% over the previous year, mainly concentrating on markets such as China, Japan, Taiwan, South Korea, and the USA. Key import products in 2020 are machinery, equipment, electronic components, and raw materials.

Foreign Direct Investment

In the first 11 months of 2021, Binh Duong received over US$2 billion foreign investment capital, including US$592 million newly registered capital, US$808 million adjusted capital, and US$670 million capital contribution. At present, the province has 4,011 investment projects from 65 countries and territories with a total registered capital of US$37 billion. Investors come from countries and territories such as Taiwan, South Korea, Singapore, Japan, Europe, and the USA. Some of the major global firms in the region include Kia Motors, Samsung, Nike, Unilever, Bosch, P&G, IBM, Hyundai, AkzoNobel, and Intel.

Foreign investors have invested mainly in high-value-added sectors such as manufacturing and processing, financial services, logistics, supporting industries, as well as high technology. The manufacturing and processing industry continues to attract much attention from foreign investors.

Labor Force

As one of the first and more developed manufacturing hubs in Southern Vietnam, Binh Duong has the highest concentration of labor, especially trained workers, in Vietnam. The province's labor supply does not only come from the locality itself and the surrounding areas but also includes migrant workers from other distant provinces from the North and the Central region of Vietnam. It is estimated that more than one million migrant workers have come to work in Binh Duong in recent years, accounting for over 50% of the local population.

With Binh Duong having a total of eight universities, five colleges, and around roughly 90 vocational schools in the province, investors express a higher degree of confidence in the existing labor supply.

Infrastructure

Binh Duong has a favorable location due to its proximity to Ho Chi Minh City, Tan Son Nhat International Airport, and Cat Lai International Seaport, making it a convenient locale for both export and import. With a wide array of amenities such as an administrative center, international hospital, and a variety of residential areas from social housing to premium apartments and villas, Binh Duong is an ideal place to live and work.

Roads

Binh Duong province currently has about 7,300 km of roads of all kinds, of which 77.1 km is the national highway and 500 km is the provincial road. Particularly, the National Highway 13, connecting Ho Chi Minh City, Binh Duong, and Binh Phuoc province, is the main road that links industrial parks and industrial clusters in the province. The new My Phuoc - Tan Van Expressway has helped reduce traffic pressure on the current National Highway 13 and shorten the time to transport goods and services to airports and seaports. This infrastructure development demonstrates the provincial leadership’s commitment to meeting investor expectations.

Railway

Along with investment in road infrastructure, Binh Duong also pays attention to the development of the railway transport system. The Metro Line No. 1 named Ben Thanh - Suoi Tien, which will be extended to Binh Duong, is under construction, creating favorable conditions to connect urban areas between Ho Chi Minh City, Dong Nai, and Binh Duong.

Waterway

The province currently has five cargo ports, three passenger wharves, and 84 cargo berths, with a capacity of over 100 million tons. The Ministry of Transport has planned to upgrade the Saigon River route from grade III to grade II, which is a great advantage for Binh Duong in expanding and promoting the development of the inland waterway network of the province.

Industrial Zones

The province currently has 31 concentrated industrial zones with a total area of ​​11,858 ha, of which 29 zones have been put into operation with a total area of ​​11,021 ha, the occupancy rate is over 91%. Up to now, these industrial zones have attracted 2,965 projects. FDI projects account for a major share of 2,309 projects with a total registered investment capital of more than US$24.3 billion. Most large enterprises investing in Binh Duong choose to locate in the concentrated industrial zones rather than in other small industrial clusters.

Binh Duong authorities have been working on developing an e-government system to reduce time and costs for businesses, together with expanding and enhancing the quality of public administrative services to better serve businesses investing in the province.

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