Linh Trung Export Processing Zone is a Vietnam-China joint venture project consisting of three zones spanning 326,37 hectares, with Linh Trung II Export Processing Zone established in 2000 in Ho Chi Minh City’s Thu Duc district, operating for 50 years.
I. Overview of Linh Trung II Export Processing Zone – HCMC:
Information about the Industrial Park:
The export processing zone is a specialized unit formed to serve businesses specialized in producing goods for export. The trade activities of manufacturing units within the export processing zone involve frequent and continuous import-export of goods from both domestic and international markets.
Linh Trung Export Processing Zone is a joint venture project between Vietnam and China, with Saigon Industrial Park Development Company (SAIGON IPD) representing Vietnam and CHINA UNITED ELECTRIC IMPORT AND EXPORT CO., LTD representing China.Linh Trung Export Processing Zone comprises three zones, I, II and III, covering a total area of 326,37 hectares.
Established in the year 2000, Linh Trung II Industrial Park, renowned as Linh Trung II Export Processing Zone, finds its location in Ho Chi Minh City. The industrial park is located in Thu Duc district of Ho Chi Minh City and is operational for 50 years since its construction.
Investment situation:
The total investment capital of the project is 55.500.000 US dollars, with the legal capital being 17.000.000 US dollars, contributed equally by both parties.
To date, Linh Trung II has attracted 41 investors to lease land and standard factory buildings, with a total investment capital of over 130 million USD. The leased area is fully occupied, and 40 investors have been granted investment licenses. The total export turnover in 2011 reached 611 million USD, creating employment opportunities for more than 30.000 workers.
The industrial park has attracted many foreign investors from countries such as Japan, Taiwan, and the United States. Some notable industrial zones are New Toyo (Singapore), Freetrend (Taiwan), Vinawood (USA), and Theodore Alexander (BV Islands).
Scale of the Industrial Park:
Linh Trung II Export Processing Zone and Industrial Park have a total area of 61,7 hectares, located in Binh Chieu Ward, Thu Duc City, Ho Chi Minh City.
Details include:
Total industrial land area: 44,01 hectares
Occupancy rate: 100%
Medium and small-scale factory buildings.
Officially operational since May 2000.
Master plan map of Linh Trung II Export Processing Zone – HCMC – TTTFIC Group
II. Geographic Location of Linh Trung II Export Processing Zone – HCMC:
Linh Trung 2 Industrial Park, Nguyen Chi Quoc Street, Thu Duc District, Binh Chieu Ward, Ho Chi Minh City, Vietnam.
Linh Trung Export Processing Zone is situated adjacent to National Highway 1A, close to Cat Lai Port and Tan Son Nhat International Airport. It attracts businesses from countries such as Japan, China, Taiwan, and South Korea, mainly focusing on advantages in light industries, such as machinery manufacturing.
Distances:
15 km from the center of Ho Chi Minh City
16 km from Saigon Port, 20,8 km from Cat Lai Port
16 km from Saigon Station
The distance to Tan Son Nhat International Airport is roughly 16 kilometers.
4 km from National Highway 1A
41 km from Saigon-Trung Luong Expressway.
III. Infrastructure in Linh Trung II Export Processing Zone – HCMC:
Internal transportation:
A convenient and smooth transportation system for easy goods transportation.
Electrical system:
The electrical system is sourced from the 110KV substation…
Public lighting system:
Separate street lighting network with residential electricity supply along the transportation routes.
Water system:
Water is supplied with a capacity of 6000m3/day and night.
Wastewater and rainwater drainage system:
The industrial zone has a comprehensive rainwater drainage system.
Waste treatment:
Investors will sign service contracts with licensed professional waste treatment units according to regulations.
Wastewater treatment:
The wastewater treatment system operates with a capacity of 5000m3/day.
Communication system:
The telecommunication system meets international standards, ready to meet high-speed data communication needs.
Linh Trung II Export Processing Zone – HCMC – TTTFIC Group
IV. Key Industries in Linh Trung II Export Processing Zone – HCMC:
Linh Trung II Export Processing Zone mainly prioritizes the development of the following industries:
Electronics, semiconductors, and home appliances.
Processing of rubber products (especially technical rubber products) and plastic products (with a focus on premium plastics).
Textiles, garment making, and embroidery.
Mechanical manufacturing.
V. Investment Costs in Linh Trung II Export Processing Zone – HCMC:
Land rental price in the industrial zone: 150 USD/m2/year
Workshop rental price: 4 USD/m2/year.
Infrastructure maintenance fee: 0,4 USD/m2/year
Clean water fee: 0,51 USD/m3
Wastewater treatment fee: 0,42 USD/m3
Electricity cost (Based on Thuduc Power Company’s rates):
Voltage above 22 kV:
Normal hours: 0,066 USD/KWh
Peak hours: 0,12 USD/KWh
Off-peak hours: 0,043 USD/KWh
Voltage below 6 kV:
Normal hours: 0,071 USD/KWh
Peak hours: 0,13 USD/KWh
Off-peak hours: 0,047 USD/KWh
Note: Prices and fees above do not include VAT. The pricing table may change at different times.
VI. Labor Source and Costs in Linh Trung II Export Processing Zone – HCMC:
Labor Source:
According to the 2019 Population and Housing Census, the population of Ho Chi Minh City as of April 1, 2019, was 8.993.082 people.
Out of the total local population of 4.8 million, more than half are of working age.
The labor force between 20 and 45 years old accounts for 65,81% of the workforce, with the age group 20-24 having the highest proportion at 16,7%, followed by the age group 25-29 at 15,18%, and the age group 30-34 at 17,58%.
Female labor force accounts for 52.41% of the total workforce, and the female labor force ratio in all age groups is higher than that of male labor force.
Regarding education, 47,6% of the labor force and population have completed secondary education or above, and 27,34% have completed lower secondary education.
The trained labor force accounts for 58% of the total workforce. The educational structure of the technical specialization is as follows: University degree – 9,35%, College degree – 1,67%, Intermediate degree – 4,37%, Elementary degree – 42,61%, and Unskilled – 42% without a certificate.
By the year 2025, Thu Duc City is expected to witness an “influx” of immigration with more than 50.000 people, including 2.000 engineers and experts coming to work. The population of Thu Duc City is forecasted to reach about 1,5 million people by 2030, and 2,2 million people by 2040. It is set to become an area that attracts high-skilled labor and professionally trained workforce.
In 5 – 10 years, the labor productivity of Thu Duc City will be three times that of Ho Chi Minh City, with the population and labor force accounting for 10% of the city’s total, making it the third economic region in the country.
Labor Costs:
Linh Trung II Export Processing Zone is located in Thu Duc City – Ho Chi Minh City, belonging to region I.
The current minimum wage in region I is 4.680.000 VND per month.
VII. Investment Incentives Policy in Linh Trung II Export Processing Zone – HCMC:
The standard corporate income tax rate currently applied is 25%.
However, depending on the sector, investors may enjoy the following preferential corporate income tax rates:
Preferential rates: from 10% to 20% (applicable for 15 to 30 years or the project implementation period).
Exemption period for corporate income tax: up to 4 years.
Tax reduction period (50%): up to 9 years.
For sectors such as education and training, vocational training, healthcare, culture, sports, and environment: A 10% tax rate applies to the enterprise’s income throughout its operation.
For sectors like software production, high technology, investment in water plants, power plants, water supply and drainage systems; roads, railways; airports, seaports, river ports; airports, train stations, and infrastructure works; a preferential tax rate of 10% applies for 15 years.
Regarding import taxes: Investors importing raw materials and machinery to create fixed assets not yet produced domestically may be exempted from import and export taxes.
The land for lease that belong to Industrial Park has run out of stock. Only the land and warehouse has been re-invested by individual investor that still available
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