The National Assembly’s passage of Resolution No. 136/2024/QH15 regarding the organization of urban government and the pilot of specific mechanisms and policies for the development of Da Nang has officially laid the foundation for the Free Trade Zone (FTZ) model and the formation of the International Financial Center (IFC). For Foreign Direct Investment (FDI) investors, this is not merely a matter of tax incentives or land; the core lies in the ability to attract and manage global talent through legal privileges unprecedented in Vietnam.
As legal experts at Siglaw, with years of experience consulting for foreign investors—particularly those utilizing a significant expatriate workforce—we provide the following in-depth analysis of the advantages of managing foreign labor within these two specialized zones.
Outstanding Advantages in Foreign Labor Management
Priority Visa and Temporary Residence Card (TRC) Policies
Within the IFC and FTZ, foreign personnel (especially high-level experts, CEOs, and semiconductor design specialists) enjoy a priority visa-processing mechanism.
Expedited Processing: A direct coordination mechanism between the Zone Management Board and the Immigration Department allows for a significant reduction in waiting times.
Flexible Validity: TRCs are granted with maximum terms aligned with the investment project’s lifecycle. This allows personnel to focus on long-term contributions without the constant concern of frequent renewals—directly addressing one of the most significant pain points for both investors and expatriates.
Integrated Living Ecosystem Model
The most distinctive feature of the Da Nang FTZ is the successful implementation of the “City within a City” model. Foreign employees do not just come to work; they immerse themselves in a world-class living ecosystem:
International Social Infrastructure: Complex projects including expert apartments, inter-level international schools, and international hospitals are integrated directly into the FTZ master plan, ensuring a stable and high-quality life for experts’ families.
Simplified Administrative Procedures: Residence registration and reporting are conducted through a centralized management system. This eliminates the bureaucratic hurdles often associated with administrative procedures in Vietnam, providing maximum convenience for expatriates.
Financial Liberalization and Specific Personal Income Tax (PIT) Benefits
Objectively, these incentives are perhaps the most attractive to international investors and experts.
PIT Incentives: Under the pilot mechanism, personnel in key sectors such as semiconductors, AI, and finance within the IFC/FTZ may be considered for a 50% reduction or exemption of PIT. This directly increases the actual take-home pay for experts while reducing the payroll burden for enterprises.
Flexible Foreign Exchange Management: Experts at the IFC are provided with favorable conditions to open foreign currency accounts and repatriate legitimate income, removing common capital control barriers.
Comparison: Da Nang IFC/FTZ vs. Standard Areas
To provide a clearer view of these advantages, Siglaw has developed the following comparison matrix:
| Comparison Criteria | Standard Areas (Outside) | At Da Nang IFC and FTZ |
| Work Permit Authority | Department of Labor, Invalids and Social Affairs (DOLISA) or Department of Employment. | Decentralized authority to the Zone Management Board for on-site processing. |
| Labor Demand Reporting | Standard 15-day process with strict recruitment requirements. | Expedited verification mechanism for experts and global talent. |
| Personal Income Tax (PIT) | Progressive tax rates (5% – 35%). | Pilot preferential rates, 50% reduction for key personnel. |
| Residency Support | Individually managed by enterprises/individuals. | “One-stop” Ecosystem, comprehensive support for experts and families. |
Siglaw’s Recommendations on Regulatory Compliance
While these zones offer numerous incentives, the pilot nature of the IFC and FTZ implies high standards for post-clearance audits. To ensure compliance and operational safety, businesses should note the following:
Expert Competency Documentation: Foreign employees must prepare accurate degrees and experience certifications to qualify for tax incentives. These documents must be consularly legalized for use in Vietnam.
Transfer Pricing Regulations: Investors should establish a strict control process for high-level personnel costs among affiliated companies in the global network. This ensures transparency during audits by regulatory authorities.
Comprehensive Labor Documentation: It is essential to secure all required documents (Visa, Work Permit, TRC, etc.). Furthermore, investors should design financial and salary structures to fully optimize FTZ/IFC incentives, including those related to family members and dependents.
With a wealth of experience accompanying multinational corporations and a profound understanding of Vietnam’s socio-political and legal landscape, Siglaw takes pride in being a strategic anchor, providing comprehensive management solutions for FDI investors at the Da Nang FTZ and IFC. We do not only dismantle complex administrative barriers but also architect superior human resource roadmaps—ranging from residency privileges to the optimization of tax benefits for high-level expert teams. At the Da Nang IFC and FTZ, Siglaw is committed to partnering with investors to transform specific incentives into sustainable competitive advantages, affirming their position as high-quality human resource hubs on the global economic map.
Contact Siglaw Firm today for an initial free consultation with Siglaw’s experienced legal professionals.
Head Office in Hanoi: No. 44/A32 – NV13, Area A Geleximco, Le Trong Tan Street, Tay Mo Ward, Hanoi, Vietnam.
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