Unit: %

Source: MPI, B&Company synthesis

Infrastructure Developments of Newly-merged Provincial-level Administrative Units

One of the primary goals behind the merging of provincial-level administrative units is to enhance infrastructure planning and connectivity. These new administrative configurations significantly improve access to regional logistics networks, including expressways, ports, and international airports, setting the stage for more integrated and efficient development.

The merging of provincial-level administrative units pave the way for the formation of large-scale industrial hubs in the Southeast and Red River Delta to meet growing demand in manufacturing and processing. Ho Chi Minh City is expected to lead the country with over 54 industrial parks [1], followed by Dong Nai (40) and Tay Ninh (24). Hai Phong, Bac Ninh, and Ninh Binh are major industrial hubs in the Red River Delta, whereas Da Nang quickly emerged as a major center for industrial activities in the central region with 12 industrial parks as of 2023.

By streamlining governance across wider areas, the new structure allows for more efficient management of large industrial zones, offering greater flexibility and options for businesses. This, in turn, boosts regional competitiveness, attracts both domestic and foreign investment, and unlocks new development potential. With increased land availability, companies can more easily secure suitable sites for factories, easing the pressure on industrial land in high-demand areas[2].

Importantly, many of these key industrial provinces either contain or are adjacent to major international airports and seaports, enhancing trade connectivity. In the north, the Hai Phong Special-Class Seaport, along with international airports in Hanoi and Quang Ninh, anchors industrial development in the region. In the south, Ho Chi Minh City’s industrial growth will be reinforced by improved access to the Ba Ria–Vung Tau Special-Class Seaport. The merging process enables more coordinated infrastructure development, ensuring better integration between ports and their hinterlands.

Significantly, landlocked provinces that were previously disadvantaged in terms of logistics now gain improved access to seaports and maritime trade routes. Many Highland provinces like Dak Lak will now have access to the sealine and seaport structure, which can help to boost the regional economy, such as tourism. This enhanced connectivity helps reduce logistics costs, increase economic development potential, and level the playing field for inland businesses.

Major Economic and Industrial Infrastructure of Vietnam

Source: B&Company Vietnam synthesis

Implications for investors

The provincial mergers create larger, more integrated markets and should improve the business environment. With fewer administrative units, decision-making should be quicker, which should ease the time and cost of starting projects. It also means harmonized regulations (land use, taxes, incentives) across the merged area. New provincial capitals (already designated or planned) will coordinate infrastructure spending more efficiently. Provinces that gain coastline or major transport links can now plan ports, tourism, and industry with national support. Lastly, with the intention to “boost economic zones” and attract investment, foreign investors can expect larger, more cohesive markets; aligned development strategies; and potential new incentives for designated mega-regions. With fewer provincial boundaries to cross, companies can negotiate with one authority on land and licenses for large-scale projects.

Conclusion

Vietnam’s provincial-level administrative unit mergers will reshape the economic map, creating mega-provinces with vast markets and unified infrastructure. New provinces offer integrated supply chains, major transport hubs, large labor pools, and cohesive development orientations.  Overall, foreign businesses should focus on the merged regions’ enhanced infrastructure and economies of scale as they plan investments in Vietnam’s evolving landscape.

[1] GSO. Vietnam Statistical Yearbook – 2023 <Source>

[2] VIR. Industrial hubs strengthened following provincial mergers <Source>

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