{"id":3366,"date":"2025-08-27T07:36:05","date_gmt":"2025-08-27T07:36:05","guid":{"rendered":"https:\/\/vinasources.com\/blog\/?p=3366"},"modified":"2026-02-04T02:57:34","modified_gmt":"2026-02-04T02:57:34","slug":"pros-and-cons-of-manufacturing-in-vietnam","status":"publish","type":"post","link":"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/","title":{"rendered":"Manufacturing in Vietnam: Pros, Cons, and Considerations"},"content":{"rendered":"<p><b>What are the pros of manufacturing in Vietnam?<\/b><span style=\"font-weight: 400;\"> And what are the cons? Vietnam has many advantages in terms of location, political stability, low labor costs and policies that support foreign companies. However, there are still some disadvantages mainly coming from regulations, legal procedures, infrastructure, productivity and supply chains. If business owners are interested in these two issues, let\u2019s refer to the following content.<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_76 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Content:<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#The_trends_driving_global_companies_to_move_factories_to_Vietnam\" >The trends driving global companies to move factories to Vietnam<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#Advantages_of_manufacturing_in_Vietnam\" >Advantages of manufacturing in Vietnam<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#1_Significantly_lower_labor_and_operational_costs\" >1. Significantly lower labor and operational costs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#3_Strategic_geographic_location_and_logistics_advantages\" >3. Strategic geographic location and logistics advantages<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#4_Trade_agreements_and_favorable_business_environment\" >4. Trade agreements and favorable business environment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#5_Political_stability\" >5. Political stability<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#6_Opportunity_amid_geopolitical_shifts\" >6. Opportunity amid geopolitical shifts<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#Disadvantages_of_manufacturing_in_Vietnam\" >Disadvantages of manufacturing in Vietnam<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#1_Infrastructure_logistics_and_productivity_still_lag_behind_China\" >1. Infrastructure, logistics, and productivity still lag behind China<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#2_Import_dependency_and_supply_chain_limitations_for_certain_materials\" >2. Import dependency and supply chain limitations for certain materials<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#3_Regulatory_complexity_and_tax_challenges\" >3. Regulatory complexity and tax challenges<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#4_Rising_labor_costs_in_key_industrial_zones\" >4. Rising labor costs in key industrial zones<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#Manufacturing_in_Vietnam_Practical_tips_and_key_consideration\" >Manufacturing in Vietnam: Practical tips and key consideration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/vinasources.com\/blog\/pros-and-cons-of-manufacturing-in-vietnam\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"The_trends_driving_global_companies_to_move_factories_to_Vietnam\"><\/span><b>The trends driving global companies to move factories to Vietnam<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Vietnam has the potential to become the destination for global factories. In just the first two months of 2025, the registered foreign direct investment (FDI) reached US$6.9 billion, up 35.5% year-on-year. The manufacturing and processing sector alone accounted for nearly 66.9% of total FDI in 2024.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This wave of FDI is largely explained by external shifts. Rising production costs in China and ongoing trade tensions have pushed many multinationals to seek alternatives in Asia. At the same time, global brands are under increasing pressure to diversify supply chains after the pandemic and to meet consumer demand for resilient, sustainable sourcing. These broader trends have combined to make Vietnam one of the top relocation choices.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It makes sense, though. Recently, major brands such as Apple, Logitech, SharkNinja, and Wyze have announced moves of production originally planned in China to Vietnam, following escalating tariffs and trade uncertainties. In apparel and footwear, Adidas shifted a significant share of its shoe manufacturing, while in electronics, Amkor and Intel expanded multi-billion-dollar packaging facilities in this Southeast Asian hub.<\/span><\/p>\n<figure id=\"attachment_3369\" aria-describedby=\"caption-attachment-3369\" style=\"width: 800px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-3369\" src=\"https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-4.jpg\" alt=\"What are the disadvantages of manufacturing in Vietnam?\" width=\"800\" height=\"414\" srcset=\"https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-4.jpg 800w, https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-4-300x155.jpg 300w, https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-4-768x397.jpg 768w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><figcaption id=\"caption-attachment-3369\" class=\"wp-caption-text\"><em>Vietnam has the potential to become the destination for global factories<\/em><\/figcaption><\/figure>\n<h2><span class=\"ez-toc-section\" id=\"Advantages_of_manufacturing_in_Vietnam\"><\/span><b>Advantages of manufacturing in Vietnam<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">So, why choose this country specifically rather than any other manufacturing base? Here are the pros of manufacturing in Vietnam:<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"1_Significantly_lower_labor_and_operational_costs\"><\/span><b>1. Significantly lower labor and operational costs<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Labor and operating costs in Vietnam are significantly lower because the Vietnamese currency is valued at a lower rate than in other countries. Therefore, the actual amount that companies have to pay employees will be significantly lower.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The salary of around <\/span><a href=\"https:\/\/www.talentnetgroup.com\/vn\/featured-insights\/compensation-benefits\/manufacturing-compensation-vietnam-factory-salary-data\/\" target=\"_blank\" rel=\"noopener\"><b>332 USD\/month on average for manufacturing workers<\/b><\/a><span style=\"font-weight: 400;\"> and roughly 347 USD\/month in the industry and construction sector, which equals approximately 8.4 million VND and 8.8 million VND respectively, is fairly stable in the Vietnamese labor market. Meanwhile, the average cost of living nationwide is only about 6-7 million VND per person per month.<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Country<\/b><\/td>\n<td><b>Manufacturing Workers (USD\/month)<\/b><\/td>\n<td><b>Industry &amp; Construction Sector (USD\/month)<\/b><\/td>\n<\/tr>\n<tr>\n<td><b>Vietnam<\/b><\/td>\n<td><span style=\"font-weight: 400;\">~332<\/span><\/td>\n<td><span style=\"font-weight: 400;\">~347<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>China<\/b><\/td>\n<td><span style=\"font-weight: 400;\">~1,453<\/span><\/td>\n<td><span style=\"font-weight: 400;\">~1,500+<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Thailand<\/b><\/td>\n<td><span style=\"font-weight: 400;\">~437<\/span><\/td>\n<td><span style=\"font-weight: 400;\">~460<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Indonesia<\/b><\/td>\n<td><span style=\"font-weight: 400;\">~300-350<\/span><\/td>\n<td><span style=\"font-weight: 400;\">~370<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>India<\/b><\/td>\n<td><span style=\"font-weight: 400;\">~250-300<\/span><\/td>\n<td><span style=\"font-weight: 400;\">~320<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<ol start=\"2\">\n<li><b> Access to an increasingly skilled labor pool<\/b><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">In recent years, the quality of human resources in Vietnam has increased significantly. They are not only young and dynamic but also have good skills. Besides that, their ability to absorb, learn and upgrade themselves is also outstanding. Nowadays, it only takes <\/span><b>1-3 years for an intern to have the ability to take on the work of a senior employee<\/b><span style=\"font-weight: 400;\">. This is a clear advantage compared to Thailand or Indonesia, where it often takes 2\u20134 years for young workers to reach the same level.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is because the number of workers in Vietnam increases significantly <\/span><a href=\"https:\/\/www.vietnam-briefing.com\/news\/vietnams-labor-market-moving-into-2024.html\/\" target=\"_blank\" rel=\"noopener\"><b>at the rate of around 600,000-700,000 people per year<\/b><\/a><span style=\"font-weight: 400;\">, making the competition among them increasingly fierce. To compete for a job, workers must constantly improve their qualifications and skills. This inadvertently creates a guarantee of high-quality human resources for global companies in Vietnam.<\/span><\/p>\n<figure id=\"attachment_3370\" aria-describedby=\"caption-attachment-3370\" style=\"width: 800px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-3370\" src=\"https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-5.jpg\" alt=\"What are the disadvantages of manufacturing in Vietnam?\" width=\"800\" height=\"450\" srcset=\"https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-5.jpg 800w, https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-5-300x169.jpg 300w, https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-5-768x432.jpg 768w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><figcaption id=\"caption-attachment-3370\" class=\"wp-caption-text\"><em>The quality of human resources in Vietnam has increased significantly<\/em><\/figcaption><\/figure>\n<h3><span class=\"ez-toc-section\" id=\"3_Strategic_geographic_location_and_logistics_advantages\"><\/span><b>3. Strategic geographic location and logistics advantages<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Vietnam has a very favorable strategic geographical location for logistics with easy access to China, Korea, Japan, and Southeast Asian countries, which are large markets for products as well as materials. Geographically, the country sits on the eastern edge of the Indochinese Peninsula, facing the East Vietnam Sea and directly connecting to both Northeast Asia and ASEAN.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The coastline is also long and has many seaports, always ready for ships with large cargo volumes. Vietnam currently operates <\/span><b>over 300 ports, including 34 seaports of different sizes<\/b><span style=\"font-weight: 400;\">, with major deep-water ports such as Cai Mep-Thi Vai capable of handling vessels up to 200,000 DWT.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In terms of transport modes, Vietnam benefits from multiple logistics corridors: maritime shipping for bulk exports, expanding air freight hubs in Hanoi and Ho Chi Minh City for high-value goods, and cross-border trucking into China. Average sea freight from Vietnam to the U.S. The West Coast takes around 20-30 days, similar to southern China but faster than India (30\u201350 days). Vietnam also has shorter routes into ASEAN and less congestion risk.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"4_Trade_agreements_and_favorable_business_environment\"><\/span><b>4. Trade agreements and favorable business environment<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Another strong advantage of manufacturing in Vietnam is its extensive network of tariff-cutting trade agreements and pro-investment government policies. The country has signed many international trade agreements (FTAs), which help reduce taxes and restrictions, creating favorable conditions for foreign investors.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As of 2025, the number of <\/span><a href=\"https:\/\/www.reuters.com\/world\/asia-pacific\/vietnam-introduce-measures-cope-with-us-tariffs-trade-official-says-2025-07-09\/\" target=\"_blank\" rel=\"noopener\"><b>in-effect FTAs that Vietnam has with its partner countries<\/b><\/a><span style=\"font-weight: 400;\"> is up to 16. Some of these agreements allow 0 % import tariffs when exporting goods such as garments, footwear, and electronics to major markets like the EU, Japan, and the UK. That means:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Lower export prices boost competitiveness of Vietnam-made goods<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Tariff savings raise margins or allow price cuts<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">FDI flows in to build factories and tap FTA benefits<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Wider access to premium global markets for Vietnamese manufacturing<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Moreover, the government also has preferential policies for foreign enterprises to promote investment capital. For example, Vietnam offers up to 4 years of corporate income tax exemption followed by 9 years at a 50% reduction for eligible projects. This is a favorable condition for global companies to expand their business and production markets.<\/span><\/p>\n<figure id=\"attachment_3371\" aria-describedby=\"caption-attachment-3371\" style=\"width: 800px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-3371\" src=\"https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-1.jpg\" alt=\"What are the disadvantages of manufacturing in Vietnam\" width=\"800\" height=\"523\" srcset=\"https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-1.jpg 800w, https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-1-300x196.jpg 300w, https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-1-768x502.jpg 768w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><figcaption id=\"caption-attachment-3371\" class=\"wp-caption-text\"><em>International trade agreements facilitate global enterprises in Vietnam<\/em><\/figcaption><\/figure>\n<h3><span class=\"ez-toc-section\" id=\"5_Political_stability\"><\/span><b>5. Political stability<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Vietnam&#8217;s political situation is always considered stable and safe. Domestically, the country has had one\u2011party leadership for decades and no major unrest.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In terms of foreign relations, the government always advocates maintaining a detente policy and not allowing war to happen. Vietnam is famous for its <\/span><b>balanced diplomacy<\/b><span style=\"font-weight: 400;\">, joining ASEAN, CPTPP, and RCEP while <\/span><b>keeping good ties with partners in both East and West<\/b><span style=\"font-weight: 400;\">. Moreover, Vietnam also has good agreements with military powers such as Russia and the United States, so it receives the protection of these countries.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"6_Opportunity_amid_geopolitical_shifts\"><\/span><b>6. Opportunity amid geopolitical shifts<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Learning from the COVID-19 period and the tense political situation in recent years, enterprises are gradually shifting towards the trend of friendshoring (producing in allied countries) and nearshoring (producing in countries near the consumer market).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Accordingly, Vietnam is considered the most suitable place, as it can meet both of these trends due to its strong relationships with other countries and its potential to form new supply chains for global businesses.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to Bank of America, since 2018, Vietnam has gained +2.1 percentage points in U.S. import market share, reflecting how these reshoring shifts are moving production away from China toward Vietnam.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Disadvantages_of_manufacturing_in_Vietnam\"><\/span><b>Disadvantages of manufacturing in Vietnam<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Besides the advantages, <\/span><b>what are the disadvantages of manufacturing in Vietnam? <\/b><span style=\"font-weight: 400;\">Let\u2019s explore all the possible cons of setting up and operating production facilities in the country.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"1_Infrastructure_logistics_and_productivity_still_lag_behind_China\"><\/span><b>1. Infrastructure, logistics, and productivity still lag behind China<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Overall, although there are many similar characteristics, infrastructure, logistics, and productivity in Vietnam are still far behind China. Roads and highways remain limited. Ports have weaker connectivity. Power or drainage issues can disrupt operations in some provinces like the Central Highlands. That said, key hubs such as Binh Duong and Hai Phong already have developed infrastructure that supports exports.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Logistics costs are also higher, making up 16-17% of GDP compared to 12-13% in China. Meanwhile, Vietnam\u2019s labor productivity in 2023 was about 37% of China\u2019s level. This is still a gap, but it\u2019s important to note that the trend is improving as more factories invest in training and automation.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_Import_dependency_and_supply_chain_limitations_for_certain_materials\"><\/span><b>2. Import dependency and supply chain limitations for certain materials<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">While this issue does not apply to all industries, it still affects manufacturers in sectors such as electronics, chemicals, and textiles. Companies in these industries face challenges because many essential inputs are imported instead of locally sourced. For example, over 50% of raw materials for Vietnam\u2019s textile and garment sector come from China.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"3_Regulatory_complexity_and_tax_challenges\"><\/span><b>3. Regulatory complexity and tax challenges<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Tax and legal procedures in Vietnam are still quite cumbersome, divided into many layers, which makes the processing time and process complicated and prolonged. According to studies, it takes <\/span><b>an average of 384 hours per year for a business in Vietnam to comply with tax procedures<\/b><span style=\"font-weight: 400;\">. In some cases, central and local administrative units have different ways of handling, which creates difficulties for businesses.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In addition, Vietnam is in the process of innovation, digitalization, and reform, so regulations can change frequently. A recent example is the revision of cadastral maps and land-use classifications, which has slowed down land licensing for new outsourced plants in several provinces.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"4_Rising_labor_costs_in_key_industrial_zones\"><\/span><b>4. Rising labor costs in key industrial zones<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Although labor costs in Vietnam are lower than in other countries, they are on the rise. From 2016 to 2023, Vietnam\u2019s minimum wage jumped by about 50%, and in July 2022 alone it rose by 6% after a two-year freeze.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Enterprises in large industrial zones must calculate wages that both reduce costs and are sufficient to retain highly qualified workers. In addition, the cost of living combined with the government wage adjustment policies also puts labor costs at risk of increasing. Despite improving worker skills and productivity, the upward wage trend is still worth considering.<\/span><\/p>\n<figure id=\"attachment_3367\" aria-describedby=\"caption-attachment-3367\" style=\"width: 800px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-3367\" src=\"https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-2.jpg\" alt=\"What are the disadvantages of manufacturing in Vietnam?\" width=\"800\" height=\"450\" srcset=\"https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-2.jpg 800w, https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-2-300x169.jpg 300w, https:\/\/vinasources.com\/blog\/wp-content\/uploads\/2025\/08\/what-are-the-disadvantages-of-manufacturing-in-vietnam-2-768x432.jpg 768w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><figcaption id=\"caption-attachment-3367\" class=\"wp-caption-text\"><em>Although labor costs in Vietnam are low, they are on the rise<\/em><\/figcaption><\/figure>\n<h2><span class=\"ez-toc-section\" id=\"Manufacturing_in_Vietnam_Practical_tips_and_key_consideration\"><\/span><b>Manufacturing in Vietnam: Practical tips and key consideration<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">These are the pros and cons that global companies need to weigh when manufacturing in Vietnam. Generally speaking, the country offers advantages such as competitive costs, a skilled and growing labor force, strategic location, and strong FDI inflows. On the other hand, there are disadvantages including infrastructure gaps, import dependency in some sectors, regulatory complexity, and rising labor costs.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If global companies want to expand their manufacturing footprint in Vietnam, here are a few important tips and considerations:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Choosing a strategic location to set up a factory:<\/b><span style=\"font-weight: 400;\"> Company owners should look for key industrial parks with good infrastructure, close to key logistics centers.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Understanding legal and tax regulations:<\/b><span style=\"font-weight: 400;\"> Foreign investors need to understand clearly the regulations on business registration, foreign capital investment, taxes, labor laws, product registration, etc. To avoid legal risks, global enterprises should have a team of lawyers specializing in handling legal issues under Vietnamese law.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Find many suppliers:<\/b><span style=\"font-weight: 400;\"> To avoid risks of material shortages and high prices causing production delays, foreign investors should find many suppliers and not depend on any single source of supply.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Having a plan to train and improve employee skills: <\/b><span style=\"font-weight: 400;\">To improve productivity and quality, and to have a team of employees working with a consistent method and process, enterprises should develop a plan to train and improve employee skills.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Having a contingency plan: <\/b><span style=\"font-weight: 400;\">Enterprises should have a contingency plan for situations that negatively impact their business and production, such as supply chain problems, political tensions, changes in regulatory policies, etc.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><b>Conclusion<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Business owners already know the answer to <\/span><b>what are the disadvantages of manufacturing in Vietnam? <\/b><span style=\"font-weight: 400;\">The above information also points out the advantages and explains each aspect in detail.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you intend to find sources of goods and materials made in Vietnam with good quality at proper cost and low MOQs, <\/span><a href=\"https:\/\/vinasources.com\/en\/our-story\"><b>VinaSources<\/b><\/a><span style=\"font-weight: 400;\"> can help. As a first and transparent <\/span><b>B2B sourcing platform<\/b><span style=\"font-weight: 400;\"> in Vietnam, VinaSources connects you directly with verified factories, giving you faster lead times, better prices, and lower risk in supplier selection.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Feel free to contact and request a quote here!<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What are the pros of manufacturing in Vietnam? And what are the cons? Vietnam has many advantages in terms of &hellip; <\/p>\n","protected":false},"author":1,"featured_media":3368,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[23],"class_list":["post-3366","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-sourcing","tag-sourcing"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Manufacturing in Vietnam: Pros, Cons, and Considerations<\/title>\n<meta name=\"description\" content=\"What are the disadvantages of manufacturing in Vietnam? 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