An Investor’s Guide to Vietnam’s Bắc Ninh Province

Bắc Ninh has recently evolved into an important industrial powerhouse in Vietnam, with an increasing number of foreign firms showing interest in the area. In this article, we offer an overview of the factors driving this trend.

Located in the Red River Delta Region, Bắc Ninh is part of the economic growth triangle of Hanoi-Hai Phong-Quang Ninh. The smallest province in terms of land area, Bắc Ninh is located to the east of Vietnam’s capital Hanoi, and shares borders with Bắc Giang, Hưng Yên, and Hải Dương provinces.

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Bắc Ninh boasts an extensive network of highways and waterways, and its infrastructure has propelled its economic value for businesses. Furthermore, its proximity to the Noi Bai International Airport underlines its easy connectivity, lowering costs of the circulation of goods and services.

Altogether, these factors have made Bắc Ninh an attractive location for foreign direct investment (FDI). While keeping this in mind, the present article looks at how Bắc Ninh stacks up in terms of doing business in Vietnam.

Public Administration Performance Index

According to the Vietnam Provincial Governance and Public Administration Performance Index (PAPI), which benchmarks Vietnam’s 63 provincial governments, Bắc Ninh showcased a commendable performance in most of the indexes. The province ranked third nationwide and first in the Red River Delta region.

In 2023, Bắc Ninh scored 45.7 points on the PAPI index. Noteworthy achievements were observed in “Vertical Accountability”, and “E-Governance”, where the province secured the 2^nd position nationwide. However, challenges persist in “Public Administrative Procedures”, and in “Environmental Governance”, where Bắc Ninh ranked 23^rd and 35^th, respectively.

PAPI, Bắc Ninh, 2018 to 2023

Source: Vietnam Provincial Governance and Public Administration Performance Index

Provincial Competitiveness Index

Since its inception in 2005, the Provincial Competitive Index (PCI) serves to identify the most competitive provinces within Vietnam.

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In 2022, Bắc Ninh ranked 7^th nationwide and claimed the 3^rd position in the Red River Delta region alone, trailing behind only Quang Ninh province and Hai Phong city. This marked an overall positive improvement from 2018 when the province came in position 15.

Of note is Bắc Ninh’s performance in the metric of “Time Costs (and Regulatory Compliance)”, which has exhibited a constant increase over the years. This was the province’s highest score on any of the 10 metrics included in the PCI.

PCI, Bắc Ninh, 2018 to 2022

Source: The Provincial Competitive Index 2022

Foreign direct investment

According to figures from the Ministry of Planning and Investment’s Foreign Investment Agency, in the first quarter of 2024, Bắc Ninh ranked second in the country for FDI attraction, with a combined registered capital of US$745.2 million.

In that period, the country awarded new investment certificates to 105 projects, and capital adjustment was made on 41 projects.

Key projects announced for Bắc Ninh include:

• Goertek Electronics Vietnam Co., Ltd., a subsidiary of Chinese electronics giant Goertek and a key supplier of Apple, announced in January 2024 that it will open a US$280 million factory in the province in the coming quarter. The project will be in Lot A1, Nam Son-Hap Linh Industrial Park.
• In March 2024, the US-based semiconductor business, Kine SIC Semi, discussed its plan to build a US$200 million factory with an initial area of 7,500 square meters in Bắc Ninh.
• Guangdong SQ New Material Co., a Chinese manufacturer of materials used in the electronic industry also expressed its intention to erect a US$50 million plant in the province while working with the Bắc Ninh Center for Investment and Development of Industrial Zones.

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Despite being the smallest province in Vietnam, Bắc Ninh has recently emerged as an industrial powerhouse. Bolstered by good infrastructure, stable human resources, efforts to reform administrative procedures, and dynamism in investment promotion, the province has become a hub of manufacturing and investment activity. Major investors hailing from China, Hong Kong, Singapore, Japan, and South Korea, among others, have established their presence in the area, benefitting from the province’s rich potential.

For foreign firms intending to enter the Vietnamese market, Bắc Ninh presents opportunities worth considering. For more in-depth guidance and more comprehensive insights into business prospects in Bắc Ninh or other provinces of Vietnam, businesses are encouraged to reach out to the business advisory experts at Dezan Shira and Associates.

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