Manufacturing in Hung Yen, Vietnam: Key Advantages and 2021-2030 Master Plan

Hung Yen, a key locality within the Northern Key Economic Zone (NKEZ), is attracting both domestic and international businesses with its renewed focus on manufacturing development and industrial transformation. The region’s comprehensive master plan for the 2021-2030 period, with a vision extending to 2050, outlines clear goals for sustained economic growth, making it a compelling destination for investment.

Last week, a governmental delegation met with Hung Yen’s administration to discuss the current situation and measures to promote its production, public investment, infrastructure construction, trade, and business environment.

According to the working session, Hung Yen province achieved positive results in the first seven months of 2024. Noticeably, the province’s gross regional domestic product (GRDP) increased by 6.81 percent, with industrial production rising by 11.13 percent, showcasing a prominent shift in its economic structure towards industry and services, whereas:

• Industry and construction accounted for 64.13 percent;
• Trade and services accounted for 28.05%; and
• Agriculture and fisheries accounted for 7.82%.

The economic landscape in Hung Yen offers businesses a favorable destination for their upcoming ventures.

Industrial-focus planning for the 2021-2030 period

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Hung Yen’s master plan for the 2021-2030 period, with a vision to 2050, marks a significant breakthrough in its industrialization strategy. By building on traditional growth drivers and introducing new catalysts, the plan aims to transform Hung Yen into a modern industrial province characterized by rapid yet sustainable development. Approved by Prime Minister Pham Minh Chinh in June 2023, the plan sets forth a comprehensive roadmap for Hung Yen to become a leading locality in terms of economic scale and growth. The Prime Minister has outlined key priorities for the region, including enhancing the business and investment environment, streamlining administrative procedures, and optimizing resources for infrastructure development.

The primary goals for Hung Yen in the master plan for the 2021-2030 period include:

• GRDP to expand by 9 percent per year, with a per capita GRDP reaching VND287 million (US$11,291) by 2030;
• Total social investment in the 2021-2030 period to hit about VND700 trillion (US$28 billion) by 2030;
• Export revenue to reach US$12-13 billion each year by 2030, with a growth rate of 8.5-9 percent annually in the 2021-2030 period; and
• Becoming a centrally-run city by 2050.

The master plan’s objectives for infrastructure

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Hung Yen province plans to establish 30 industrial parks by 2030, covering approximately 10,000 hectares. The long-term goal is to expand to 35 industrial parks, encompassing around 12,000 hectares. Currently, 10 of these industrial parks are fully equipped with modern infrastructure and are ready to host new investment projects. These parks collectively offer nearly 1,000 hectares of clean land available for development. Simultaneously, several other industrial parks, including Ly Thuong Kiet Industrial Park, Tan Dan Industrial Park, Industrial Park No. 01, Industrial Park No. 06, and Van Nhue-Hoang Hoa Tham Industrial Park (Tan A Industrial Park-Dai Thanh), are advancing through the investment approval process.

On July 7, Hung Yen granted investment licenses and policy approvals for 24 projects, attracting over US$1.15 billion in combined capital from both domestic and foreign investors.

Favorable location for manufacturing

Located in Vietnam’s Red River Delta region, Hung Yen province spans approximately 923 square kilometers and is home to a population of over 1.2 million. Its strategic connections to major transportation networks—including highways, railways, and waterways—provide easy accessibility and make it a prime location for trade and commerce.

Hung Yen is positioned along two key economic corridors:

• Kunming (China) – Lao Cai – Hanoi – Hai Phong
• Nanning (China) – Lang Son – Hanoi – Hai Phong

As one of seven localities within the Northern Key Economic Zone (NKEZ), alongside Hanoi, Hai Phong, Quang Ninh, Vinh Phuc, Bac Ninh, and Hai Duong, Hung Yen enjoys significant logistical advantages. Its proximity to other rapidly developing provinces, such as Ha Nam and Thai Binh, further enhances its strategic importance.

• 30 km from central Hanoi (approximately 30 minutes by car)
• 55 km from Noi Bai International Airport (approximately 45 minutes by car)
• 92 km from Hai Phong Seaport (approximately 60 minutes by car)

Robust economic and administrative development

Hung Yen achieved an impressive gross domestic product (GDP) growth rate of 10 percent in 2023, significantly surpassing Vietnam’s national average of 5.25 percent. This robust growth underscores the province’s economic potential and fosters optimism for its future development.

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Between 2018 and 2023, Hung Yen’s economic structure has notably shifted towards industry and services. In 2023, the province’s industrial production and construction sectors saw a year-on-year increase of 7.08 percent, with construction alone growing by 14.86 percent. During the same period, the value of commercial and service production rose by 15.23 percent, while the agriculture and aquaculture sectors posted a more modest growth of 2.45 percent.

Hung Yen’s efforts to advance administrative reforms and enhance its business environment have paid off, resulting in a record-breaking influx of foreign direct investment (FDI) in 2023, exceeding US$1 billion.

Among 63 provinces of Vietnam, Hung Yen also ranked high on various administrative indicators in 2023, such as:

• 12^th in the Provincial Competitiveness Index (PCI);
• 4^th in the Provincial Green Index (PGI);
• 11^th in the Provincial Governance and Public Administration Performance Index (PAPI); and
• 12^th in the Public Administration Reform Index (PAR).

State of infrastructure

Power infrastructure

Hung Yen has successfully established a stable power supply and distribution system, including transformer stations and 500 kV, 220 kV, and 110 kV power lines. This well-coordinated infrastructure investment ensures that the province’s energy demands are consistently met. The 500 kV Line 3 (Quang Trach—Pho Noi) terminates in Pho Noi, Hung Yen’s key area, which is a hub for commercial centers, banking and finance, educational institutions, and advanced industrial zones. This significantly enhances the province’s capacity to supply electricity, supporting its continued growth and development.

Transportation

Recognized as the eastern gateway to Hanoi, Hung Yen boasts a convenient and modern transportation network, strategically located near four national highways and other essential routes:

• National Highway 5A (Hanoi – Hai Phong)
• National Highway 39A (Hung Yen – Thai Binh)
• National Highway 38 (Bac Ninh – Hai Duong – Hung Yen – Ha Nam)
• National Highway 38B (Hai Duong – Ninh Binh)
• Hanoi – Hai Phong Expressway
• Hanoi – Hai Phong Railway
• Red River and Luoc River waterways, connecting the Red River Delta region

In addition to its existing infrastructure, Hung Yen is benefiting from significant investments in major transportation projects, including:

• Ring Road 4 (Hanoi – Hung Yen – Bac Ninh)
• Cho Ben – Yen My Expressway
• Hung Yen – Thai Binh Expressway

Youthful and skilled workforce

Hung Yen has a population of over 1.3 million and a workforce of about 700,000. Of this workforce, 69 percent are trained workers, with 31 percent classified as skilled, high-quality professionals. The province’s robust higher education system, consisting of 28 colleges and universities, produces an average of 12,000 graduates annually, further enriching the local talent pool.

Situated within a 60 km radius of five provinces in northern Vietnam, Hung Yen has access to a large and diverse labor force. This strategic location enables the province to attract high-quality human resources from the capital, Hanoi, ensuring a steady supply of workers for high-tech application projects. Additionally, the labor cost in Hung Yen remains competitive, ranging from US$250-300 per individual per month.

Attractive investment incentives

Hung Yen offers a wide range of incentives for investment in prioritized industries and industrial parks to promote industrial transformation. In general, eligible investors will enjoy:

• Exemption from import tax to create fixed assets;
• Investment in infrastructure within industrial parks;
• Labor recruitment support;
• Investment promotion activities; and
• Labor training support.

For prioritized sectors

Hung Yen currently grants special incentives for investments in its prioritized industries, which include:

• Supporting industrial products
• Biotechnology
• Software technology
• High-tech applications

Investments in these sectors are eligible for the following benefits:

• A preferential corporate income tax (CIT) rate of 10 percent for 15 years
• Complete tax exemption for the first four years
• A 50 percent tax reduction for the following nine years

For investments in industrial parks

Businesses can take advantage of a complete tax exemption in two years and a 50 percent tax reduction in the next four years when investing in these sectors:

• Electronics
• Refrigeration
• Telecommunications
• Computers
• Mechanical engineering
• Automobiles, motorbikes
• Pharmaceuticals, cosmetics

Conclusion

With a clear roadmap in place, Hung Yen offers a strategic advantage for businesses in its prioritized sectors. Companies can maximize the benefits of investing in the province by thoroughly analyzing its master plan, leveraging their expertise alongside Hung Yen’s incentives, and optimizing production to take full advantage of the province’s geographic location, infrastructure, and skilled labor force.

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