Cambodia vs Vietnam vs Thailand for manufacturing

Short answer

Cambodia, Vietnam and Thailand are not interchangeable. On the numbers that decide a manufacturing investment, Vietnam has the deepest incentives and the largest market, Thailand has the most predictable tax holiday regime, and Cambodia has the lowest wage floor for the garments sector with the smallest but fastest-growing investor base. The right answer depends on your product, your supply chain and your customers, not on which country is fashionable.

The comparison, row by row as of 2026

Every row below carries its own source and its own date, because these numbers move. Where a rate is temporary, the end date is stated in the same cell.

Decision factor	Cambodia	Vietnam	Thailand
Statutory minimum wage	USD 210 per month for the garment, textile, footwear and travel goods sectors from 1 January 2026 (MLVT Prakas 214/25)	VND 3.7m (Region IV) to VND 5.31m (Region I) per month from 1 January 2026 (Decree 293/2025/ND-CP)	THB 337-400 per day across 17 rate bands, unchanged through 2026 (Wage Committee Announcement No. 14, in force 1 July 2025)
Standard corporate income tax	20% for medium and large taxpayers, with a 1% minimum tax on turnover	20% (Corporate Income Tax Law 2025)	20% (Revenue Code; small-company relief below THB 3m of income)
Best manufacturing incentive	Qualified Investment Project: income tax holiday of three to nine years, or expenditure-based relief, under the 2021 Law on Investment	17% for ten years for qualifying projects, plus turnover bands of 15% and 17% (Corporate Income Tax Law 2025, Article 13)	Board of Investment promotion: 0% corporate income tax for 3, 5, 8 or 10-13 years depending on category and location
Import VAT	10% on the customs value plus freight, insurance, duty and specific tax	8% until 31 December 2026, then 10% (Resolution 204/2025/QH15; metal products, mining and excise goods excluded)	7% until 30 September 2027, then 10% (Royal Decree No. 807, in force 1 October 2026)
MFN average applied tariff	Four ad valorem bands: 0%, 7%, 15% and 35%, plus specific tax on some goods	9.5% simple average applied (2025)	9.6% simple average applied (2025)
Foreign land ownership	Not permitted; land may be held by a Cambodian entity with at least 51% Cambodian voting shares	Not permitted; only land-use rights, leased for up to 50 years (70 in special cases)	Not permitted; leases, plus a Board of Investment permit to own land for promoted projects
Minimum registered capital	No capital-floor rule; a KHR 4,000,000 default applies where the articles are silent (Law on Commercial Enterprises, Article 144)	No general statutory minimum for a foreign-invested company since 1 March 2026	THB 2m paid in for a foreign-majority company, THB 3m where a foreign business licence is required (Foreign Business Act, section 14)
Market size	17.8m population, 5.3% growth in 2025 (World Bank, 8 October 2026)	101.6m population, 8.0% growth in 2025 (World Bank)	71.6m population, 2.4% growth in 2025 (World Bank)
FDI net inflows, 2025	USD 5.1bn (UNCTAD World Investment Report 2026)	USD 20.4bn (UNCTAD)	USD 19.1bn (UNCTAD)
Commercial court	None launched as at March 2026; arbitration and Ministry of Commerce mediation in practice	No dedicated commercial court; specialised intellectual property courts and the Vietnam International Arbitration Centre	A specialised intellectual property and international trade court, and arbitration under the Arbitration Act 2002

Averages are not rates. The MFN row is a trade-weighted summary, not the rate on your product: check your own code in the National Trade Repository and the FTA portal.

How to read the table

Three things in that table are routinely misread.

Headline tax rates are not the same thing as incentives

All three headline corporate income tax rates are 20%. What differs is the regime underneath. Thailand's Board of Investment grants an exemption of 0%, not a lower rate, and it is project-specific. Vietnam's 17% lasts ten years and is conditional on sector and location. Cambodia's Qualified Investment Project holiday is set by the sector in the negative list, and it comes with an external audit and reporting obligation. If a country is chosen on the headline rate alone, the model is wrong.

Two of the import VAT rates expire

Vietnam's 8% and Thailand's 7% are temporary reductions with end dates. A business case built on them needs a downside case at 10%. Cambodia's 10% is the standing rate.

Wages are not the same as labour cost

The garment-sector floor in Cambodia is USD 210, but the package a factory actually pays includes transport or accommodation, attendance and meal allowances and a seniority bonus, which together add roughly USD 17 to USD 28 a month. Vietnamese law does not mandate those allowances, and Thai law requires a meal allowance and transport to the workplace if the site is off-site. Wages alone will mislead you in both directions.

What usually decides it

Across the projects we have worked on, the deciding factor is rarely the wage or the tax rate. It is usually one of four things.

Where your customers are. If you sell into Vietnam or Thailand, a Cambodian plant is a cost centre and a Cambodian subsidiary is a distribution point.
What your inputs are. Preferential tariff access follows the rules of origin, not the location of your customer. A plant in the wrong country can destroy the tariff position you were trying to reach.
How much you need the land and the power. Cambodia is the cheapest of the three on the wage floor and the most constrained on land title and utility reliability.
How you intend to leave. A promoted project with a long exemption period has an end date, and the exit is usually cleaner if you plan for it from the start.

Where the table comes from

Cambodian figures come from the Ministry of Labour, the Ministry of Economy and Finance, the General Department of Taxation, the Council for the Development of Cambodia and the World Bank. Vietnamese figures come from Decree 293/2025/ND-CP, the Corporate Income Tax Law 2025 and Resolution 204/2025/QH15. Thai figures come from the Ministry of Labour, the Board of Investment and the Revenue Department. Inflows are compared on one measure, UNCTAD's net inflows, because approved investment values and actual inflows are different numbers.

Two things we could not verify and therefore did not use: the Thai night-shift premium and senior-worker allowance rates in a consolidated text, and any dated DEPA accession date for either neighbour.

Questions investors ask

Which country has the lowest labour cost for manufacturing?

On the statutory wage floor for the garments sector, Cambodia: USD 210 a month from 1 January 2026, against a Vietnamese regional range of VND 3.7m to VND 5.31m and a Thai range of THB 337 to THB 400 a day. The gap narrows once allowances, social insurance and overtime are added, and it reverses for skilled roles in higher-cost Vietnamese cities.

Is the corporate income tax lower in Vietnam or Thailand?

No: the standard rate is 20% in all three countries. The difference is the incentive underneath. Thailand can grant zero corporate income tax for 3 to 13 years through the Board of Investment, Vietnam can apply 17% for ten years to qualifying projects, and Cambodia can grant a Qualified Investment Project income tax holiday of three to nine years.

Can a foreign company own land in any of the three countries?

No. Vietnam grants land-use rights rather than title, and leases of up to 50 years. Thailand permits leases and, for Board of Investment promoted projects, a permit to own land. In Cambodia land may be held only by a Cambodian entity with at least 51% Cambodian voting shares, so foreign investors use registered leases instead.

Which country has the cheapest import duty?

It depends on the product and the origin, not the country. All three apply the same structure of ad valorem bands plus VAT, and each has preferential rates under its own trade agreements. Check your specific code rather than relying on a headline average.

Can I serve Vietnam from a Cambodian factory?

Yes, and many companies do, but the tariff treatment of the finished product does not follow where it was made. Rules of origin, and in some cases local processing, determine whether the product keeps the preferential rate on export to Vietnam, so model the rules of origin before you choose a production site.

Which is easier to enforce a contract in?

Thailand has a specialised intellectual property and international trade court and an established arbitration system. Vietnam has arbitration through the Vietnam International Arbitration Centre and new specialised courts, but no general commercial court. Cambodia has no commercial court, so enforcement is arbitration or negotiation with Ministry of Commerce mediation, which is why contract drafting matters more there.

Does Cambodia have a bigger market than Vietnam?

No. Cambodia had a population of 17.8 million in 2025 and drew about USD 5.1bn of FDI net inflows, against Vietnam at 101.6 million and USD 20.4bn. Cambodia is a smaller market with faster recent growth in approved investment, which is a different proposition.

What if I only need a sales presence, not a plant?

Then the comparison changes completely, and the choice of country is usually driven by your customers and the tariff position of your product rather than by wages or incentives. A distributor or branch in the target market is usually the cheaper first step.

Official tools to use alongside this guide

Sources

General information only, not legal, tax or investment advice. Laws, rules and figures change. Confirm the current position with licensed Cambodian professionals before acting.

Cambodia vs Vietnam vs Thailand for manufacturing: a sourced comparison