Deputy Prime Minister Nguyen Hoa Binh over a week ago approved tasks related to the development of Danang. Danang People’s Committee is responsible for completing the proposal and establishment dossier for the Danang free trade zone (FTZ) by December. The dossier will then be submitted to the Ministry of Planning and Investment (MPI) for appraisal and subsequent submission to the prime minister for approval, the decision noted.

Danang People’s Committee will prepare a draft decision to add the management functions of Danang FTZ to the management board of high-tech zones and industrial parks (HTZIPs) in the city. This decision will be submitted to the Ministry of Home Affairs for appraisal, which must be completed by the end of 2024. At present, Danang is in the process of drafting a special mechanism for the FTZ.

“In the initial pilot phase, the preferential policy applied to the Danang FTZ is focused on creating the best conditions for investment and business procedures, focusing on a one-door mechanism for administration procedures,” said Tran Van Ty, deputy head of the HTZIP’s management board, at a forum themed Connecting Business in the city on October 9.

Besides that, the FTZ will implement several trial policies during its first five years of operation. Foreign investors in the zone will benefit from a range of incentives, including exemptions from corporate income tax, land rent, and import duty tariffs, Ty added.

“Furthermore, enterprises can receive many benefits, especially firms in IPs located on national highways and expressways, and especially near Lien Chieu IP, a part which is currently proposed to be a functional area of the FTZ,” said Ty.

The event heard that the Danang FTZ is proposed to be piloted with preferential policies. It will include a commercial production area, a logistics port, and a commercial and service area. The first phase will be completed in an open direction, softening boundaries based on research and application of an integrated business urban model.

In addition, HTZIP’s board will perform state management functions for the FTZ, and has management authority according to the one-stop, on-site mechanism in all fields, facilitating the settlement of investment procedures for businesses.

Minister of Planning and Investment Nguyen Chi Dung emphasised in June that along with preferential policies on tax, land, labour, and resources, there are special two policies for the Danang FTZ.

“The first thing is breakthrough reform about the one-door mechanism. We strongly support piloting this policy and decentralising thoroughly,” he said. “Instead of businesses and investors having to ask for opinions and licences from many levels and ministries, Danang People’s Committee and the HTZIP board should decide. The approval of projects will be faster, and simultaneously it will create a superb environment to attract investment.”

The second aspect is the mechanism to allow large corporations to set up offices in FTZs without attaching a project. “Understandably, big investors do not want to waste time - they look for investment opportunities and will set up projects later if they feel suitable. Thus, if we make things difficult for them from the start, we will lose out on opportunities,” said Minister Dung.

Many NA deputies agreed that Vietnam has better conditions to develop FTZs, particular with its long coastline and plans to boast more than 30 international seaports. This is a favourable point for Danang to pilot such projects, which can then be implemented in localities with similar characteristics such as Haiphong, Ba Ria-Vung Tau, Thanh Hoa, Quang Ngai, Can Tho, Tra Vinh, and many others.

CT Strategies, which specialises in providing technical support and capacity-building services, is currently carrying out work in Haiphong with a private sector company and the People’s Committee on establishing a FTZ.

The company is working on a feasibility study to determine the potential legalities, carry out a market assessment, and establish standard operating procedures and concepts. The company hopes to carry out similar work in provinces like Ba Ria-Vung Tau and Quang Tri, a representative said.