3 Ways to Secure a Factory in Vietnam: Ready-Built Factory Rental vs. Land Lease and Construction vs. BTS — Comparing Timelines, Costs and Permits (2026)

When establishing a manufacturing entity in Vietnam, there are three ways to secure a factory. The first is to sign a lease for a ready-built factory constructed by a developer, the second is to lease only an industrial park site and build according to your own design, and the third is to enter into a build-to-suit (BTS) construction contract with a developer.

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Suppose a Taiwanese electronic components manufacturer has decided to relocate its factory to Binh Duong. It needs a 10,000 m² site and aims to move in six months from now. The investment commitment and entity establishment have been completed, but the factory site has not yet been secured.

Term, cost and process for a ready built factory vietnam lease

A ready-built factory is a standard-design building completed by an industrial park developer or private real estate company and leased on a monthly basis. The average monthly rent in the south announced by CBRE, JLL and Cushman & Wakefield for Q2 2026 is approximately USD 4.9-5.2/m², while the northern rate is approximately USD 5.0-5.3/m². These are all asking rents, and whether management fees and VAT are included varies by contract.

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The occupancy rate for ready-built factories in the south was 92.0% in Q2 2026, indicating limited vacancy (Cushman & Wakefield). To find a unit available for immediate occupancy in a specific industrial park, companies must check available inventory with the developer's sales team.

Building a Vietnam factory after leasing a site: cost, permits and timeline

This approach involves leasing industrial park land and building a factory according to your own design. The land lease term is paid in a lump sum for the entire period (Article 202 of the 2024 Land Law). As of Q1 2026, industrial park land lease rates in the south ranged from USD 185/m² to more than USD 280/m², while research institution averages for Q2 2026 were USD 183-186/m² in the south and USD 137.7-143/m² in the north (CBRE, JLL and Cushman & Wakefield).

Construction Law 135/2025 requires a permit for construction within an industrial park, with no exemption provision. Fire safety design appraisal under Law 55/2024 and Decree 105/2025 requires resubmission if the design drawings fail to meet the standards.

Temporary factory for rent vietnam during factory relocation

When production cannot be halted before the self-built factory is completed, the company can sign a short-term lease for a ready-built factory and operate from it. Conditions for short-term leases may vary by contract.

Advantages and conditions of a build-to-suit (BTS) contract

Under a BTS arrangement, the developer designs and builds the facility according to the occupier's required specifications. The developer retains ownership of the land, while the occupier enters into a long-term lease after completion or exercises a purchase option. Since the developer handles the investment commitment, construction permit and fire safety appraisal, the occupier does not bear the administrative burden of obtaining these approvals.

BTS reduces the initial cash outflow and transfers permitting risk to the developer, but offers less design flexibility and long-term contractual flexibility than self-construction. It is suitable for projects with substantial production equipment investment and a confirmed operating period of more than 10 years.

Comparison of capital, timeline and risk across the three options

A ready-built factory is suitable when immediate operation is required and the objective is to minimise initial capital. Self-construction is suitable for projects with specialised production equipment and a confirmed long-term operating period, while BTS is appropriate when design consultation is required but the occupier wants to avoid the permitting burden.

Risks: occupancy, permitting delays and reinstatement at contract expiry

With the occupancy rate for ready-built factories in the south at 92.0% in Q2 2026, vacancy is limited and it may be difficult to secure the desired location and area immediately. Companies seeking to locate in a specific industrial park must ask the developer about remaining inventory. Self-construction may be delayed during the permitting stage because of requests to supplement the design drawings or failure to meet fire safety standards, creating a risk that the total timeline will exceed expectations. Under BTS, a penalty may apply if the developer's required minimum lease term is not completed, and the building must be returned or purchased at contract expiry.

When a land lease expires, the building must be demolished or transferred to the developer, while internal structural modifications must be reinstated at the end of a ready-built factory lease. The contract should be checked to confirm that it specifies the scope of reinstatement and the party responsible for the costs.

FAQ: Frequently asked questions about establishing a factory in Vietnam

When establishing a factory in Vietnam, must the factory site or ready-built factory be secured first?

The factory site or ready-built factory location must be determined before registering the investment commitment. Because the business address must be stated in the investment commitment document, it is common to first sign a land lease or ready-built factory reservation agreement with the industrial park developer.

When leasing a factory in Vietnam, are separate environmental and fire safety permits unnecessary?

The landlord holds the completion inspection and fire safety certification for the ready-built factory itself, but if the occupier operates a specific production process, such as using chemicals or discharging air or water pollutants, it must separately obtain an environmental impact assessment and discharge permits. Inspection of fire safety equipment and workplace safety reporting are also the occupier's responsibility.

What is the penalty for early termination of a BTS contract?

BTS contracts generally specify a minimum lease term, and early termination usually requires payment of a penalty equal to a certain percentage of the rent for the remaining term, typically 20-50%. The amount varies by contract, so the penalty clause should be checked carefully.

How is an existing factory lease handled when relocating a factory in Vietnam?

If the new factory becomes operational before the expiry date of the existing lease, the existing contract should be terminated. If operations begin after the expiry date, a short-term extension should be requested. Because short-term extension conditions may vary by contract, it is advantageous to adjust the lease expiry date in line with the completion schedule for the new factory.

Before selecting a factory procurement method, the following matters should be confirmed in writing with the sales team. First, whether the industrial park has any remaining ready-built factory inventory; second, the remaining term of the land lease and the rent payment conditions, whether paid in a lump sum or instalments; and third, the minimum lease term and early termination penalty under a BTS contract. The Korea Desk can check the ready-built factory inventory and land lease terms for each industrial park via KakaoTalk or Zalo.