Thailand vs. Vietnam: Where Should You Move Your Manufacturing?

As more companies look beyond China to diversify their supply chains and take on China + 1 Strategies, Thailand and Vietnam have emerged as two of the top alternatives in Southeast Asia. Both countries offer cost-effective labor, improving infrastructure, and favorable trade agreements, but they’re not interchangeable. Whether you're launching a new product line or relocating an established one, understanding the differences between these two manufacturing hubs is critical to making the right move.

In this blog, we’ll explore Thailand vs. Vietnam in manufacturing, how the two countries compare in terms of ease of doing business, industrial strengths, infrastructure, workforce, culture, and more.

Ease of Doing Business

When evaluating a new country for manufacturing, the overall ease of doing business is a critical starting point. While both Thailand and Vietnam have made significant strides in attracting foreign investment, there are notable differences in how business-friendly their environments are.

Thailand generally ranks higher in global business climate indexes due to the ease of company registration, better regulatory transparency, and investor-friendly policies. The Thailand Board of Investment (BOI) plays a key role in simplifying the setup process for foreign manufacturers. Through BOI promotion, qualified companies may benefit from taxes, exemptions on import duties, and simplified visa and work permit processes for foreign staff. 

Vietnam, on the other hand, has made rapid improvements in recent years but still tends to involve more bureaucratic hurdles and longer timelines for permits and approvals. That said, the government is actively working to improve its investment climate, and many foreign companies have still found success, particularly in export-driven industries.

From a legal standpoint, Thailand allows 100% foreign ownership for BOI-promoted projects in many sectors, while Vietnam often requires joint ventures or limits full ownership in certain industries. Thailand also tends to have more established intellectual property protections, which can be important for brands concerned with product design security.

If speed, predictability, and transparency in setting up operations are high priorities, Thailand typically offers a smoother path. However, if you’re targeting high-growth, labor-intensive production with competitive costs, Vietnam may still be worth the extra effort depending on your goals.

Industrial Strengths and Specializations

Thailand and Vietnam have each carved out distinct roles in global manufacturing based on their strengths, workforce capabilities, and historical development patterns. Understanding what industries each country excels in can help determine which is better aligned with your product and production goals.

In general, Thailand if farther along with more advanced manufacturing. It is especially strong in:

• Automotive and auto parts: Thailand has a well-developed supply chain supporting major global car brands.

• Electronics and industrial machinery: Thailand produces a significant share of the world’s hard drives and electrical components.

• Medical devices: With strong government support and skilled labor, Thailand is emerging as a reliable base for high-quality medical manufacturing.

These sectors benefit from Thailand’s technical workforce, high-precision capabilities, and stable infrastructure. 

Vietnam, by contrast, has become a preferred location for:

• Textiles and footwear: It is one of the world’s leading exporters in this space, thanks to a large labor pool and cost competitiveness.

• Consumer electronics assembly: Major brands like Samsung and Apple rely on Vietnam for assembling phones, accessories, and small components.

• Furniture and wood products: Vietnam is now among the top exporters of wooden furniture to the U.S.

Vietnam’s strengths lie in labor-intensive industries with high output, especially where the focus is on volume over complexity. 

In short, if your product demands tight tolerances, engineering support, and a more mature industrial ecosystem, Thailand may be the better fit. If your focus is high-volume consumer goods where cost and capacity matter most, Vietnam may offer stronger advantages.

Labor Force

The availability, skill level, and cost of labor are among the most important considerations when relocating or expanding manufacturing operations. Both Thailand and Vietnam offer large workforces, but they differ in terms of labor cost, specialization, and workforce dynamics.

Thailand offers a more experienced and technically trained labor pool, especially for industries like automotive, medical devices, and electronics manufacturing. The country benefits from a strong vocational training system and government support for workforce development in high-tech industries. Wages in Thailand are a tad higher than in Vietnam, with average monthly manufacturing wages ranging from $300 to $500 depending on the region and role. However, that additional cost is often offset by higher productivity and lower turnover rates.

According to InCorp Vietnam, Vietnam offers a younger and larger labor force, with over half the population under the age of 35. This demographic advantage has supported rapid growth in labor-intensive industries such as textiles, footwear, and consumer electronics assembly. Average monthly wages are lower, typically ranging from $200 to $350, which makes Vietnam highly competitive for cost-sensitive projects. However, high turnover is more common, particularly in urban manufacturing hubs, which can lead to retraining costs and production inefficiencies.

Workforce availability is generally strong in both countries, but the type of labor differs. Thailand is better suited for complex, precision-focused work that demands a more skilled workforce. Vietnam, meanwhile, shines in large-scale operations where repetitive processes and manual assembly dominate.

If your production requires technical training, quality consistency, and lower attrition, Thailand may offer a more stable environment. For projects that prioritize labor cost and scale over specialization, Vietnam remains a highly attractive option.

Infrastructure and Logistics

A country’s infrastructure directly impacts production timelines, shipping costs, and the overall reliability of your supply chain. Both Thailand and Vietnam have made large-scale investments in ports, roads, and industrial zones, but their current capabilities and efficiencies vary.

Thailand has a more developed and integrated logistics network. The country’s primary deep-sea port, Laem Chabang, is growing in popularity and connects directly to major industrial zones via well-maintained highways and rail links. Thailand also has modern airports like Suvarnabhumi and Don Mueang that support cargo transport efficiently. Industrial zones and export processing zones are well-established, particularly in the Eastern Economic Corridor (EEC), which has been a major focus of government investment.

Thailand also ranks highly in logistics performance and customs efficiency. Electricity, water, and internet infrastructure are generally reliable and consistent across most manufacturing regions, which reduces the risk of operational delays due to outages.

Vietnam has improved significantly in the past decade, with major ports such as Hai Phong (north), Da Nang (central), and Cat Lai in Ho Chi Minh City (south) serving as key logistics hubs. However, port congestion and slower customs clearance can be challenging, particularly during peak shipping seasons. Road and rail infrastructure is still developing and can cause delays, especially in more remote areas. That said, the government has committed to major infrastructure upgrades under its "Master Plan for Transport Development."

Vietnam’s electricity and internet services are generally reliable in industrial zones, but service disruptions still occur more frequently than in Thailand.

If your supply chain demands fast, reliable transport and minimal logistics friction, Thailand currently holds the advantage. For companies willing to accept longer lead times or who are shipping primarily from southern Vietnam ports, Vietnam can still be a viable choice, especially when balanced against lower production costs.

Language and Communication

Language and communication play a crucial role in smooth manufacturing operations, especially when it comes to aligning on technical requirements, quality standards, and production timelines.

Thailand generally has a higher level of English proficiency in the manufacturing sector, particularly in areas with high foreign investment like Bangkok, Chonburi, and Rayong. Many mid-level managers and engineers are comfortable communicating in English, and it’s not uncommon to find bilingual staff who are export-focused. This can make day-to-day coordination and technical discussions more efficient, especially during product development and quality troubleshooting.

Vietnam, while improving, still faces a wider language gap. English proficiency is growing,  particularly among younger workers, but it is less consistent, especially outside of major cities like Hanoi and Ho Chi Minh City. In many factories, front-line staff and even supervisors may not speak English fluently, and communication often relies on a translator or an English-speaking liaison.

These differences can influence your need for on-the-ground oversight. In Thailand, teams often find they can operate with fewer communication bottlenecks. In Vietnam, having bilingual staff or a local project manager becomes more critical to ensuring smooth coordination.

Another factor to consider is the broader communication style. Thai business culture tends to be more indirect and polite, which sometimes makes it harder to surface problems quickly. In Vietnam, communication can be more direct, but misunderstandings can still arise due to language limitations.

Ultimately, if clear and frequent communication is essential, such as during a complex product launch or engineering-heavy project, Thailand may offer a smoother path. For companies with experience managing offshore teams or who already have staff familiar with Vietnam, the communication gap can be bridged, but it does require more planning and support.

Cultural Factors

Cultural differences can have a significant impact on how business is conducted, affecting everything from negotiation styles and decision-making speed to daily operations and employee expectations. Understanding these nuances in Thailand and Vietnam can help avoid miscommunication and build stronger supplier relationships.

Thailand has a business culture rooted in hierarchy, respect, and non-confrontation. Decision-making can take longer, as approvals often need to go through multiple layers of management. Open disagreement is generally avoided, and issues may be communicated in subtle or indirect ways. For foreign partners, this can require reading between the lines and building strong personal relationships to create a foundation of trust. Thai culture places high value on stability and harmony, which can contribute to long-term business partnerships, especially if you invest in relationship-building early.

Vietnam, while also relationship-driven, tends to be more direct and fast-paced in its business dealings. Decisions are often made quickly, and feedback is more likely to be shared openly. There is a strong entrepreneurial spirit, especially among younger workers and business owners. However, authority and hierarchy still play a role, and face-saving remains important in professional settings.

In terms of workplace culture, Thai employees may expect more formal structures and clear leadership, while Vietnamese employees may be more adaptable but also more likely to switch jobs for better opportunities. This difference can affect employee retention and the level of investment you may need to make in training and management oversight.

Both cultures emphasize relationship-building and loyalty, but the approach to communication and pace of decision-making differs. If your team is used to working in a structured, harmonious environment with a slower pace of change, Thailand may feel more aligned. If you're looking for a fast-moving, entrepreneurial environment—and you're prepared to manage more turnover—Vietnam may be a better cultural fit.

Conclusion: Thailand vs. Vietnam in Manufacturing

When evaluating Thailand vs. Vietnam in manufacturing, the right choice depends on your priorities—whether that’s cost, complexity, quality control, or supply chain stability. Both countries have their strengths, but they serve different needs.

At EPower Corp, we evaluated several countries as part of our China +1 strategy, and we chose Thailand. The decision came down to a combination of factors: a technically skilled labor force, reliable infrastructure, strong government incentives, and ease of communication with English-speaking teams. For the types of products we manufacture, where quality, consistency, and engineering alignment are critical, Thailand offered the most balanced and scalable solution.

While Vietnam remains an excellent option for high-volume, labor-intensive production, Thailand provides the predictability and process control our customers expect. It also gives us the ability to handle more complex assemblies and manage production without compromising timelines or quality standards.

If you're evaluating your next manufacturing move, Thailand deserves serious consideration. Whether you're looking to reduce tariff exposure, diversify out of China, or improve quality control, Thailand’s manufacturing ecosystem and our on-the-ground presence can help make your transition successful.

We’d be happy to share more about how we set up our Thailand facility and what to expect if you're thinking of doing the same. Let’s talk.