Overview of Vietnam’s provinces and municipalities

Overview of Bac Giang

As more and more people pay attention to the Vietnamese market, Yuanzhe Consulting has
also received a large number of inquiries related to the Vietnamese market. These questions
involve many fields, such as:

-Are there big differences in salary levels in different regions in Vietnam?

-How do foreigners set up a company in Vietnam?

-What kind of preferential policies do foreign-invested enterprises enjoy in Vietnam?

-How do foreign-funded enterprises rent offices in Vietnam and hire Vietnamese employees?

-Is it better for textile and clothing manufacturers to set up factories in southern Vietnam or
northern Vietnam?

-How to sell the auto parts you produce to Vietnam?

-How to purchase natural rubber from Vietnam?

-How will Vietnam’s cement market demand grow in the next few years?

-What is the price of industrial electricity in Vietnam?

-Has the impact of COVID-19 on Vietnam been eliminated?

- Various other issues.

Yuanzhe Consulting will answer the questions of high concern related to Vietnam one by
one. We will launch a series of topics related to Vietnam’s macroeconomics, investment
policies, industry research, and regional economic research to help everyone better
understand the Vietnamese market.

We will introduce you to basic information about various regions in Vietnam to help you
better understand the Vietnamese market and discover your own investment opportunities.

Administratively, Vietnam is divided into 58 provinces and five municipalities directly under
the central government (Can Tho, Da Nang, Haiphong, Hanoi, and Ho Chi Minh City).
Provinces and cities vary in size. The largest province in Vietnam is Nghe An Province, with
an area of about 6,368 square kilometers. The smallest province is Bac Ninh Province, with
only 822.71 square kilometers; the most populous province is Ho Chi Minh City. Data shows
that in 2021 Ho Chi Minh City has a population of 9.166 million, and the province with the
smallest population is Bei Kan Province, with only 323,700.

Administrative map of Vietnam by region

At the same time, Vietnam usually groups the country's many provinces into eight major
regions: Northwest, Northeast, Red River Delta, North-Central, South-Central, Central
Plains, Southeast and Mekong Delta. These eight regions are not official administrative
divisions of Vietnam, but are only divided according to geographical location.

According to Yuanzhe Consulting's analysis, regions such as Ho Chi Minh City and Hanoi
City in Vietnam have relatively developed economies, large populations, and high per capita
monthly wages. The overall economic level of these cities is relatively developed and
suitable for the development of industries with higher added value, such as finance and
service industries.

Yuanzhe Consulting will bring you an overview of the five municipalities and some important
provinces in Vietnam.

Specifically, enterprises related to finance, commerce, import and export trade, technological
innovation, Internet and telecommunications industries can obtain more development
opportunities in these areas; at the same time, there are many provinces and cities in
Vietnam with large populations and low per capita wages, which are The three or four
categories of areas with minimum wages in Vietnam, such as Thanh Hoa, Nghe An, Dak
Lak, and Thai Binh provinces, are labor-intensive and cheap, and are more suitable for the
development of processing manufacturing, planting, and breeding industries with low added
value.

Relatively speaking, Vietnam's five municipalities, namely Ho Chi Minh City, Hanoi, Da
Nang, Haiphong and Can Tho, play a more important role in Vietnam's economy. We will
introduce these regions one by one.

1. Bac Giang Province Overview

1.1. Strategy Location

Locating in the Northeastern region of Vietnam, Bac Giang province is on the Lang Son -
Hanoi - Ho Chi Minh City - Moc Bai economic corridor (in the Nanning - Singapore Corridor).
The province borders Hanoi Capital, Bac Ninh, Hai Duong, Lang Son, Quang Ninh, Thai
Nguyen and adjacent to Hanoi - Hai Phong - Quang Ninh economic triangle.
With a natural land of approximately 3,895 square kilometers, and a population of over 1.8
million people, the province has 09 administrative units at district level and 01 city. Bac
Giang city is the administrative center of the province. The city is 50 kilometers away from
Hanoi capital, 110 kilometers away from Huu Nghi (Lang Son) border gate, 50 kilometers
away from Noi Bai international airport, 130 kilometers away from Hai Phong seaport and
Cai Lan - Quang Ninh deepwater port.
 Total Land in use of Bac Giang Province
in 2022

Agricultural Land
22% Forestry Land
32% Urban Land, Specialized Land,
and Residential Land
Other types of Land

17%

29%

According to the office of Bacgiang Provincial People’s committee, the province has 382,200
hectares of natural land, including 123,000 hectares of agricultural land, 110,000 hectares of
forestry land, 66,500 hectares of urban land, specialized land, and residential land. The
remaining 82,700 hectares are of other types of land.
Along with that, the province also has 3 big rivers with large flow (Cau River, Thuong River
and Luc Nam River) flowing through all year long for a total length of 347 kilometers. There
is also a system of ponds, lakes, lagoons, and groundwater with a relatively large reserve.
The amount of surface water, rainfall, and groundwater is enough to supply economic
sectors and daily life.
1.2. Economic Overview
According to the General Statistics Office, the economic growth rate (GRDP) in 2023 of Bac
Giang province is estimated to reach 13.45%, leading the country.
Of which, the industry - construction sector increases by 17.25% (industry alone increases
by 18.56%); agriculture, forestry and fisheries increases by 2.63%; service sector increases
by 6.56%; product tax minus product subsidies increases by 7.14%.
The scale of GRDP has been expanded. Full year value (current price) is estimated at 181.8
trillion VND (equivalent to about 7.6 billion USD), exceeding 0.2% of the plan. GRDP per
capita reaches 3,950 USD, an increase of 10%, exceeding 3% of the plan. The economic
structure has shifted strongly towards increasing the proportion of industry. The value of
industrial production (current prices) for the whole year is estimated at 539 trillion VND,
exceeding 6.2% of the year's plan.
Agricultural production continues to develop towards large-scale production with cooperation
and linkage along the value chain. Application of technical advances, advanced production
processes such as VietGAP, GlobalGAP, high-tech applications are paid attention to and
replicated. Livestock farming continues to shift strongly in the direction of reducing small-
scale farming and reducing the proportion of pig herds, increasing concentrated farming on
farm scale, and raising livestock in a closed chain.

Trade, import and export; financial and banking services; transportation, postal and
telecommunications continue to grow.
In the past 2 years, Bac Giang's economic growth rate has achieved many impressive
results. In 2022, the province's economic growth rate reached 19.3%, ranking second in the
country; by 2023, reaching 13.45%, rising to the top of the country.

1.3. Labor market overview

In the first months of 2023, the labor market in Bac Giang province has prospered as a
number of large enterprises have been awarded investment certificates by the province.
Some businesses have begun to expand production, helping workers have more choices in
finding jobs.
Aspect Description
Total Workfocre Over 1 million
New Entrants 32,000 people per year
Job Shifting Agriculture and forestry workers moving to
industry and construction
Interprovincial Migration Workers from neighboring provinces
seeking jobs in Bac Giang
Labor Shortage No local shortages or surpluses in different
industries
Recruitment Needs High demand in electronic component
production
Job Fair Early Spring job transaction session
connecting online with 10 provinces
Participating Businesses 158 from various provinces and cities
Open Positions Approximately 55,700

2. Bac Giang Province Economy

2.1. Key economic sectors of Bac Giang Province

Sector Description Contribute to GDP Importance

Industry & Largest and fastest- 57% Major driver of

Construction growing sector, economic growth
dominated by and employment
foreign-invested
enterprises (FIEs) in
electronics,
garments, footwear,
and furniture

Agriculture Decreasing 24% Provides food

contribution but still security and
important,
 employing over 20% livelihoods for many
of workforce; known
for lychees, longans,
rice, poultry, and
aquaculture

Services Rapidly growing 20% Supports diverse

sector economic activities
encompassing and attracts
tourism, trade, investment
transportation, and
finance; Bac Giang
is a popular tourist
destination with
universities and
colleges contributing
to its development

Small & Medium- Account for over N/A Form the backbone
sized Enterprises 90% of all of the economy and
(SMEs) businesses, involved create employment
in various activities opportunities
across
manufacturing,
agriculture, and
services

The Bac Giang government is committed to diversifying the province's economy and
reducing its reliance on a few key sectors. The government is investing in infrastructure,
education, and training in order to attract new businesses and industries to the province. Bac
Giang is also working to improve the business environment and make it easier for
businesses to operate.

2.1.1. Outstanding foreign-invested companies and local Vietnamese companies

Foreign-invested Companies
Number Company Address Image
Name
1 Samsung Quang Bieu
Electronics village, Quang
Chau
commune, Viet
Yen district, Bac
Giang province.

2 Yaeda Lot 6, Quang

Group Chau Industrial
Park, Quang
Chau
commune, Viet
Yen district, Bac
Giang province.

3 Foxconn Lot F07, Quang

Vietnam Chau Industrial
Park, Quang
Chau
commune, Viet
Yen district, Bac
Giang province.

4 Luxshare Van Trung

Precision Industrial Park,
Industry Viet Yen district,
Co., Ltd Bac Giang
province.

Local Vietnamese Companies

Number Company Address Image
Name
1 HAEM Vina Dinh Tram
Industrial Park,
Bac Giang
Province,
Vietnam

2 TNG Can Village,

Investment Huong Son
and Commune, Lang
Construction Giang District,
Joint Stock Bac Giang
Company Province,
Vietnam

3 Hashimoto Dinh Tram

Seimitsu Industrial Park,
Việt Nam Bac Giang
Province,
Vietnam
4 Bac Giang No. 349, Giap
Garment Hai Street, Dinh
JSC) Ke Ward, Bac
Giang City, Bac
Giang Province,
Vietnam

2.1.2. Some outstanding industrial parks

There are 08 industrial parks that have been approved by the Prime Minister for investment
policy with a total natural land area of about 1,792.5 hectares;
05 industrial parks are operating with a total natural land area of about 1,063 hectares,
including:
 Dinh Tram Industrial Park (Viet Yen district) with an area of 127.4 hectares;
 Song Khe - Noi Hoang Industrial Park (Yen Dung district) with an area of 158.7
hectares;
 Quang Chau Industrial Park (Viet Yen district) with an area of 426 hectares;
 Van Trung Industrial Park (Viet Yen district) with an area of 350.3 hectares;
 Viet Han Industrial Park (Yen Dung district) with an area of 197.31 hectares.

No Name of Information Image

Industrial Park
1. Dinh Tram Dinh Tram Industrial Park is
Industrial Park the first industrial park
established in Bac Giang
province. The industrial park
is located in Viet Yen district,
with a total area of 127
hectares. The industrial park
specializes in manufacturing
electronic products,
supporting industries,
textiles, footwear, and food
processing. As of January
2024, Dinh Tram Industrial
Park has more than 100
factories, creating jobs for
more than 30,000 people.
2. Van Trung Van Trung Industrial Park is
Industrial Park the second largest industrial
park in Bac Giang. The
industrial park is located in
Viet Yen, bordering Bac
Ninh. The industrial park
attracts many large projects
from foreign corporations
such as Samsung, Foxconn,
Yadea. The industrial park's
 main industries are
electronics, supporting
industries, textiles, footwear,
and food processing. As of
January 2024, the Industrial
Park has 109 projects,
creating jobs for more than
20,000 workers.
3. Quang Chau Quang Chau Industrial Park
Industrial Park is the largest industrial park
in Bac Giang province,
located in Viet Yen district.
Quang Chau Industrial Park
has an area of 426 hectares,
with synchronous and
modern infrastructure. Quang
Chau Industrial Park attracts
many investment projects
from multinational
corporations, especially in
the field of electronics.
4. Hoa Phu Hoa Phu Industrial Park is an
Industrial Park industrial park in Hiep Hoa
district, Bac Giang province,
Vietnam. The industrial park
has an area of 207.45
hectares, with synchronous
and modern infrastructure.
Hoa Phu Industrial Park
attracts many investment
projects from domestic and
foreign enterprises,
especially in the fields of
electronic manufacturing,
supporting industries,
textiles, footwear, food
processing,...
5. Song Khe – KCN Song Khê - Nội Hoàng
Noi Hoang thu hút nhiều dự án đầu tư
Industrial Park của các doanh nghiệp trong
nước và nước ngoài, trong
đó có các tập đoàn đa quốc
gia như Samsung, LG,
Foxconn,... Các ngành công
nghiệp chủ yếu tại KCN Song
Khê - Nội Hoàng bao gồm:
điện tử, công nghiệp phụ trợ,
dệt may, da giày, chế biến
thực phẩm,...
2.2. Foreign direct investment
2.2.1 FDI figures and performance

In recent years, thanks to strong improvements in the business investment environment, Bac
Giang has become an attractive destination for foreign investors. In 2023, Bac Giang will
rank 4th in the country in attracting foreign investment (FDI), with the total registered capital
reaching the highest level ever.

Total registered FDI capital is Total registered FDI capital is

highest in the country in the first 3 highest in the country in the first 3
months of 2023 months of 2023
1,200.00 (Source: Foreign Investment
Department).
1,000.00
In 2023, the world and regional
800.00
situation continues to fluctuate
600.00 complicatedly, but the province's
investment attraction, especially FDI
400.00
capital attraction, still achieves
200.00 positive results. In 11 months of this
year, the whole province has
0.00
Total registered capital attracted more than 3.2 billion USD
of converted investment capital, an
Bac Giang Dong Nai Bac Ninh
increase of 3.2 times compared to
Ho Chi Minh City Hai Phong
the same period in 2022 (the
highest ever). In terms of FDI attraction alone, Bac Giang ranks 4th in the country, after
Quang Ninh province, Ho Chi Minh City and Hai Phong city.

FDI projects are concentrated in the fields of manufacturing, processing electronic

components, garments... Specifically, the province has issued new investment registration
certificates for 89 FDI projects with registered capital of more than 1 billion VND. .53 billion
USD, 3.47 times higher than the same period last year; adjusted to increase capital for 48
FDI projects with additional capital of nearly 1.4 billion USD, nearly 2.2 times the previous
year.

According to Mr. Tran Quang Tan, Director of the Department of Industry and Trade, FDI
enterprises operating in the area have made great contributions to the province's industrial
production value. This year, the province's economic growth rate continues to be a bright
spot in the national growth picture, estimated at 13.45%, ranking first in the country. The
value of industrial production (current prices) in the whole province reached more than 541
trillion VND, exceeding 6.6% of the year's plan. In particular, the industrial production value
of the FDI enterprise sector reached more than 439 trillion VND, an increase of nearly 18%
compared to the previous year and accounting for more than 81% of the total industrial
production value of the province.
2.2.2. Opportunities for foreign investing
Ho Chi Minh City presents a wealth of opportunities for foreign investors looking to
tap into Vietnam's dynamic and growing economy. Firstly, high-tech industries.
Manufacturing  Electronics: This is the dominant sector in Bắc
Giang's FDI landscape, with established
companies like Samsung and LG. Opportunities
exist for companies in the supply chain, such as
component manufacturers and assemblers.
 Garments and textiles: Another major industry
with a strong presence of international brands.
Investors can explore opportunities in fabric
production, apparel manufacturing, and
accessories.
 Other manufacturing: Bắc Giang is also
developing other manufacturing sectors like
furniture, food processing, and machinery.
Investors with expertise in these areas can find
potential opportunities.

Infrastructure and  Industrial parks: The province is actively

Development developing new industrial parks with modern
infrastructure. Investors can consider setting up
facilities in these parks to benefit from the
supportive environment.
 Logistics and transportation: Bắc Giang's
strategic location near major transportation hubs
like Noi Bai International Airport and Hai Phong
port presents opportunities for investment in
logistics and transportation infrastructure.
 Renewable energy: Vietnam is prioritizing
renewable energy development, and Bắc Giang
has potential for solar and wind power projects.
Investors with expertise in these areas can find
promising opportunities.

Other Potential Sectors  Healthcare: The province is looking to improve

its healthcare facilities and services. Investors
can explore opportunities in hospitals, clinics,
and medical equipment manufacturing.
 Education: Bắc Giang is investing in education
infrastructure and needs qualified teachers.
Foreign investors can explore opportunities in
establishing international schools or providing
educational services.
 Tourism: The province has potential for eco-
tourism and cultural tourism. Investors can
develop resorts, hotels, and other tourism
infrastructure.
2.2.3 Challenges for foreign investing
When it comes to foreign investing in Ho Chi Minh City, the opportunities are
plentiful, but the challenges should not be ignored. Firstly, market access and competition.

Competition Bắc Giang already has a well-established presence of foreign

investors, particularly in major sectors like electronics and
garments. This means new entrants will face stiff competition
from existing players.

Labor While the labor pool is growing, there might be a shortage of

highly skilled workers in specific sectors. Investors might need
to invest in training or offer competitive salaries and benefits to
attract and retain skilled personnel

Infrastructure Although infrastructure is improving, there might be limitations

in some areas, particularly in terms of transportation networks
and utilities in less developed industrial zones. Investors may
need to factor in additional costs for infrastructure upgrades or
alternative solutions.

Bureaucracy Navigating administrative procedures and obtaining necessary

permits can sometimes be time-consuming and complex.
Investors should be prepared for potential delays and seek
professional guidance to ensure smooth operations.

Language and cultural Language and cultural differences can create communication
barriers challenges and hinder smooth business operations. Investors
can mitigate this by hiring bilingual staff or partnering with local
companies familiar with the cultural nuances.

Legal and regulatory Although Vietnam is actively reforming its legal system, some
environment uncertainties and complexities might still exist in the regulatory
landscape. Seeking legal advice is crucial to ensure
compliance and avoid potential risks.

Environmental Vietnam is tightening its environmental regulations, and

regulations investors need to comply with stricter standards. This may
require additional investments in pollution control measures
and waste management practices.

Political and economic While Vietnam enjoys relative political stability, global
stability economic fluctuations and regional tensions can still impact
the investment climate. Investors should carefully assess the
potential risks and conduct thorough market research.