Vietnam-Singapore 2 Industrial Park (VSIP2)

VSIP II Industrial Park ( IP ) was established in 2006, following the success of VSIP I Industrial Park, whose investor is the Vietnam-Singapore Industrial Park Joint Venture Company Limited. After more than 17 years of establishment and development, VSIP II IP has attracted numerous large-scale domestic and foreign businesses. This continuous development has contributed to making Binh Duong one of the four provinces attracting the highest foreign direct investment (FDI) capital in the country.

I. Overview of VSIP II Industrial Park

VSIP II IP was established in 2006 by the Vietnam-Singapore Industrial Park Joint Venture Company Limited. This industrial park project is invested in two phases and currently maintains a 100% occupancy rate. VSIP II has attracted over 128 projects from 22 countries and territories.

Legality of VSIP II Industrial Park

• In accordance with Decision 870/TTg dated November 18, 1996, by the Prime Minister, governing the functions, tasks, powers, and organizational structure of the management board of Vietnam – Singapore industrial parks.
• The investment license was issued on February 13, 1996, by the Ministry of Planning and Investment.
• Application for an investment certificate signed on June 20, 2008.

The scale of the Industrial Park

VSIP II Industrial Park covers a total area of 2,045 hectares, divided into two phases:

• Phase 1 (Investment in 2006): Encompassing 345 hectares, situated in the Northeast of Binh Duong Industrial, Service, and Urban Cluster. It’s 15 km from Binh Duong and 35 km from Ho Chi Minh City.
• Phase 2 (Investment in 2008), also known as VSIP 2A: Covers an area of 1,700 hectares, located in the Northeast of Binh Duong Urban, Industrial, Service, and Urban Complex.

Investor of VSIP II Industrial Park

The investor of VSIP II Industrial Park is Vietnam Singapore Industrial Park Joint Venture Company, a prominent entity in the field of industrial development investment in Vietnam.

Investment Situation of VSIP II Industrial Park

VSIP II Industrial Park has completed its infrastructure construction and maintains a 100% occupancy rate. It has attracted nearly 130 projects from more than 22 countries and territories worldwide. The establishment of this industrial park has also created stable employment for nearly 24,000 workers across the country, with a total investment capital of approximately $1.3 billion USD.

Prominent Investors at VSIP II Binh Duong Include:

• Key Plastics Co., Ltd., Global Vina (Japan)
• Bokuto Co., Ltd., Takasina, Sumiyohshi
• CNC Industry Company Limited
• NTI Vina Company Limited
• Won Taix Company Limited

II. Location of VSIP II Industrial Park in Binh Duong

VSIP II Industrial Park is situated in the following wards:

• Hoa Phu Ward (Thu Dau Mot City)
• Hoa Loi Ward (Ben Cat Town)
• Phu Chanh Ward, Vinh Tan (Tan Uyen Town)
• Tan Binh commune (Bac Tan Uyen District – Binh Duong)

The location of VSIP II Industrial Park is highly esteemed due to its proximity to the Binh Duong Industrial, Service, and Urban Complex. VSIP II is only 15 km north of VSIP I Industrial Park and is located in the planned construction area for Binh Duong’s new city center providing numerous advantages.

Connection Potential of VSIP II Industrial Park

• Thu Dau Mot City – Binh Duong: 11.6 km
• Ho Chi Minh City Center: 40 km
• Bien Hoa City – Dong Nai: 28.8 km
• Tan Son Nhat International Airport: 39.7 km
• Long Thanh – Dong Nai International Airport: 28.8 km
• Cai Lai deep-water Port: 45.6 km
• Tan Cang – Cai Mep Port: 89 km
• Saigon Station: 41.8 km
• Song Than Station: 28 km

Assessing the location, VSIP II Industrial Park benefits from its proximity to major economic centers of the country, including Thu Dau Mot City, Ho Chi Minh City, Bien Hoa – Dong Nai, and the Central Highlands provinces, providing advantages for businesses engaged in trade and transportation of goods.

III. Infrastructure of VSIP II Industrial Park

VSIP II Industrial Park, located in Binh Duong, was built following the model of the highly successful VSIP I Industrial Park, also an investment project by VSIP. Thus, VSIP II features modern infrastructure to offer an attractive business environment and attract investment. The park’s infrastructure strengths and professional customer support services are outlined below:

Social Infrastructure:

• Round-the-clock security service
• Essential utilities within the vicinity, including markets, schools, hospitals, parks, to cater to the needs of residents and workers
• Approximately 5 km from VSIP II are the government headquarters, trade, and service agencies of Binh Duong province in Binh Duong New City.

Technical Infrastructure:

• Well-connected to major roads such as DT724, DT741, My Phuoc – Tan Van Expressway, and a ring road that traverses the Industrial Park.
• A power grid system with a 3 x 61 MVA capacity ensures ample electricity supply for factories and workshops in the Industrial Park.
• Clean water system with a capacity of up to 20,000 m3/day and night for Phase 1 and 50,000 m3/day and night for Phase 2.
• Wastewater treatment system with a capacity of 6,000 m3/day and night, with plans for future expansion to 40,000 m3/day and night in the next phase.
• Communication and telephone system with systematic investment and a capacity of 2,000 residential lines (expected to expand to 10,000 lines during the first phase).

With its modern and diverse infrastructure, VSIP II Industrial Park continues to attract many domestic and foreign investors, providing an ideal environment for developing production and business activities.

IV. Industries Attracting Investment in VSIP II Industrial Park

VSIP II Industrial Park maintains a 100% occupancy rate with a wide variety of businesses and investors focusing on different professions and fields. The priority areas for investment in this Industrial Park encompass:

• Manufacturing and assembling auto parts
• Power Electronics
• Mechanical engineering
• Textile
• Pharmaceuticals and healthcare services
• Food and beverages
• Supporting industries
• Other areas

With its well-invested and modern infrastructure, VSIP II Industrial Park emerges as a promising investment destination, attracting industries with significant development potential. Furthermore, the abundance of local human resources contributes to expanding market opportunities and production activities for businesses.

V. Investment Incentives of VSIP II Industrial Park

Apart from its advanced industrial infrastructure, the investment incentives offered at VSIP II Industrial Park are a driving force behind its 100% occupancy rate. Located in the industrial capital of Binh Duong, VSIP II, similar to VSIP I, enjoys appealing incentives from the Provincial People’s Committee and the Industrial Park management board.

Below are some investment incentives applicable to VSIP II Industrial Park:

Tax-free incentives

• Exemption from land and water surface rent for projects aimed at constructing infrastructure for common use in industrial parks.
• Land rent and water surface rent exemption for three years for projects listed under industries eligible for investment incentives.
• Land and water surface rent exemption for eleven years for investment projects in fields with special investment incentives.
• Preferential tax rate of 10% for a period of 15 years.
• Tax exemption for four years.
• A 50% reduction in tax payable for the subsequent nine years.

Moreover, the Provincial People’s Committee extends maximum support to businesses at VSIP II, especially when participating in promotion programs organized by the province and the country. This creates a favorable environment for investors to choose VSIP II Industrial Park. Binh Duong People’s Committee, in collaboration with the investor, facilitates trade and attracts factories to move to this industrial park.

VI. Investment Costs at VSIP II Industrial Park

Due to its large-scale and well-invested infrastructure system, VSIP II Industrial Park garners significant attention from businesses and investors. Below are the costs associated with investing in VSIP II:

• Land rental price with infrastructure: A minimum area of 1,000 m2, with a rental price of 200 USD/m2. This area features modern infrastructure suitable for investment and business development.
• Water price: 0.5 USD/m3 (subject to regulations by the Binh Duong Provincial People’s Committee).
• Labor salary: Ranges from 250 – 500 USD/person/month (based on reference salaries for labor recruitment in Binh Duong and Ho Chi Minh City in 2019).
• Electricity price: 0.05 USD/KWh (subject to regulations by Binh Duong Electricity).
• Wastewater treatment fee: 0.28 USD/m3 (intended to maintain a green, sustainable environment according to regulations of the Industrial Park Management Board).
• Management fee: 0.4 USD/m2/month.

These are the investment costs in VSIP II Industrial Park that businesses can consider.

VII. Labor Resources and Labor Costs

With nearly 130 investors and businesses operating in VSIP II Industrial Park, the demand for labor resources here is substantial. Workers from not only Binh Duong province but also many provinces and cities across the country seek job opportunities in this region due to relatively competitive labor costs, ranging from 250-500 USD/person/month.

The labor force and skilled workers at VSIP II are continually improving their training to meet the production demands of businesses. With the exceptional advantages that VSIP II Industrial Park offers, it is expected that workers from various provinces and cities will continue to move here and establish themselves.

VIII. Economic Value of VSIP II Industrial Park

After more than 17 years of establishment and development, VSIP II Industrial Park has earned recognition as a leading industrial park in Binh Duong. Its growth has significantly contributed to increasing foreign investment (FDI) and placing Binh Duong among the top four provinces with the highest FDI capital in the country.

Notable indicators of VSIP II’s growth include hosting large-scale investment projects, such as Nitto Denko Co., Ltd. With capital exceeding 186.2 million USD, Nitto Denko Co., Ltd. has been one of the major investors at VSIP II Industrial Park. Additionally, Sharp Manufacturing Co., Ltd. also made significant investments, with capital reaching up to 135 million USD. With systematic investment and a multitude of attractive incentives, VSIP II will undoubtedly continue to play a vital role in contributing to the economic and social development of Binh Duong province.

Conclusion

VSIP II Industrial Park boasts numerous advantages, including its location, infrastructure, and provincial investment incentives. The cost of production activities here is considerably lower than in other industrial parks in the area. Consequently, it’s no surprise that VSIP II is attracting investment capital from various countries and territories.

As one of the key industrial parks in Binh Duong, VSIP II has demonstrated its worth as a leader, setting the standard for other emerging industrial parks to follow. We hope that the information shared by TTTFIC provides a comprehensive overview of this industrial park.