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Establishment of Da Nang Free Trade Zone: Opening Doors for Investment
The free trade zone in Da Nang is a functional zone with a defined geographical boundary. It is established to pilot mechanisms and policies that streamline business operations and promote economic growth by attracting high-quality investment. These policies aim to attract foreign direct investment in high-tech manufacturing and promote the development of international financial services.
Table of contents:
- 1. Da Nang Free Trade Zone – A New Driver of Growth
- 2. Diverse Functional Zones, Efficient Operation
- 3. Transparent and Clear Establishment Process
- 3. Preferential Land Policies, Investor Support
- 4. Attractive Investment Incentives, Promoting Growth
- 5. Customs Priority, Facilitating Trade
- 6. Synchronous Infrastructure Investment, Promoting Development
- 7. Dedicated Management Board, Investor Support
- 8. Close Coordination Between Management Agencies
- 9. Comprehensive State Management
1. Da Nang Free Trade Zone – A New Driver of Growth
Da Nang, with its strategic geographical location and well-developed transport infrastructure, is taking a significant step towards promoting economic growth by establishing a Free Trade Zone (FTZ) linked to Lien Chieu Port. The Da Nang FTZ is poised to become an attractive destination for both domestic and international investors, offering special incentives and policies designed to attract high-quality investment in finance, commerce, tourism, and services.
According to Clause 2, Article 13 of Resolution 136/2024/QH15 on the organization of urban administration and piloting specific mechanisms and policies for Da Nang City's development, the Da Nang FTZ will have designated functional zones as stipulated in the Prime Minister's decree establishing the FTZ. These zones include production areas, logistics centers, commercial and service zones, and other functional areas as prescribed by law. These zones will be separated from the outside area by a secure barrier to ensure customs inspection, supervision, and control by customs authorities, as well as state management in accordance with relevant laws. The buying, selling, and exchange of goods between the FTZ's functional zones and the outside area are considered export and import activities under customs, taxation, and export-import laws.
2. Diverse Functional Zones, Efficient Operation
The Da Nang FTZ will feature a variety of functional zones, including production areas, logistics centers, commercial and service zones, and other types of functional zones as prescribed by law. The clear demarcation of these zones by secure barriers will ensure strict customs inspection and supervision while facilitating state management activities.
3. Transparent and Clear Establishment Process
The Prime Minister has the authority to decide on the establishment, adjustment, and expansion of the Da Nang FTZ's boundaries. This process will comply with legal regulations on the establishment, adjustment, and expansion of boundaries for economic zones, ensuring transparency and clarity.
3. Preferential Land Policies, Investor Support
Land policies for the Da Nang FTZ are designed to create the most favorable conditions for investors. Land acquisition, compensation, support, and resettlement will be carried out in accordance with land law provisions. Selected investors will enjoy preferential policies on land lease and land use, similar to investment projects in industrial parks.
4. Attractive Investment Incentives, Promoting Growth
The Da Nang FTZ offers a range of attractive investment incentives:
| Incentive | Description |
|---|---|
| Flexible operating duration | Investment projects in the FTZ have an operating duration similar to projects in economic zones, facilitating long-term implementation and development. |
| Simple procedures for foreign investors |
Foreign investors can establish economic organizations in the FTZ without a prior investment project, reducing investment barriers and fostering an open business environment. Specifically: - Foreign investors establishing economic organizations in the Da Nang Free Trade Zone are not required to have an investment project and are not required to carry out procedures for granting and adjusting investment registration certificates before establishing economic organizations. - Foreign investors follow the procedures for establishing economic organizations as applied to domestic investors in accordance with the Law on Enterprises and other relevant laws for each type of economic organization. Business registration agencies or other competent agencies in accordance with the law corresponding to each type of economic organization inspect the fulfillment of market access conditions for industries and trades with restricted market access for foreign investors in accordance with the Law on Investment. - After being established, economic organizations implementing investment projects carry out investment procedures in accordance with the Law on Investment. |
| Exemption and reduction of land rent | Investment projects for the construction and business of infrastructure in the FTZ enjoy incentives on exemption and reduction of land rent, reducing costs for investors. |
| Tax incentives | Investment projects in the FTZ enjoy corporate income tax incentives similar to projects in economic zones, creating a significant competitive advantage. |
| Preferential treatment for goods and services | Taxes applied to the purchase, sale, and supply of goods and services in the FTZ are similar to those in non-tariff zones within economic zones, facilitating trade activities. |
5. Customs Priority, Facilitating Trade
Enterprises investing in the Da Nang FTZ will enjoy priority customs regimes for import and export activities in the city, reducing time and costs related to customs procedures.
6. Synchronous Infrastructure Investment, Promoting Development
The City People's Council will decide on investment or support for investment in technical and social infrastructure inside and outside the FTZ, aiming to create a favorable environment for production and business activities.
7. Dedicated Management Board, Investor Support
The Management Board of the Da Nang Hi-Tech Park and Industrial Zones will directly perform the state management function for the FTZ, ensuring the implementation of legal regulations and supporting investors throughout the operation process.
8. Close Coordination Between Management Agencies
The Government, ministries, branches, and the City People's Committee will closely coordinate in the management and development of the FTZ, ensuring publicity, transparency, and effectiveness in operation.
9. Comprehensive State Management
Other state management activities related to the FTZ, including the management of visas, immigration, security, environment, and construction planning, will be carried out in accordance with the provisions of law for industrial parks and economic zones.
In conclusion, the establishment of the Da Nang Free Trade Zone is a significant step forward, opening up new development opportunities for the city and attracting high-quality investment. With attractive incentive policies, simplified procedures, and comprehensive support from authorities, the Da Nang FTZ promises to become a sought-after investment destination, contributing to economic growth and enhancing Da Nang's position in the international arena.
The information contained in this article is general and intended only to provide information on legal regulations. DB Legal will not be responsible for any use or application of this information for any business purpose. For in-depth advice on specific cases in the field of Enterprise, Labor and Employment, please contact us.
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