The establishment of the Da Nang Free Trade Zone (FTZ) under Resolution No. 136/2024/QH15 is not only a breakthrough for Central Vietnam but also opens a “bay of opportunities” for Foreign Direct Investment (FDI) investors. As senior investment consultants and international trade lawyers at Siglaw, with extensive practical experience in supporting international investors in Vietnam, we assess this as the “golden time” for enterprises to seriously reposition their supply chains within the country.
In this article, Siglaw’s experts provide in-depth analysis, market context insights, and evaluations of the roadmap and competitive advantages for investors interested in the Da Nang FTZ.
Competitive Advantages: Da Nang FTZ vs. Traditional Industrial Parks (IPs)
What are the key differences that drive investors’ locational decisions? In our consultation sessions, this is often the primary concern. Investors frequently ask: “Why should I choose an FTZ over a traditional IP with existing infrastructure?” Below are the compelling reasons regarding the fundamental differences between these two areas.
| Criteria | Traditional Industrial Parks | Da Nang Free Trade Zone (FTZ) |
| Import-Export Duties | Tax exemption only for Export Processing Enterprises (EPEs). Normal enterprises still incur taxes for domestic transactions. | Full tax exemption within the non-tariff zone. Goods circulating between international FTZs and Da Nang are duty-free. |
| Customs Procedures | Standard procedures; specialized inspections are conducted per shipment. | Priority “On-spot One-stop” mechanism; primarily post-clearance inspection, minimizing warehousing time. |
| CIT Incentives | Subject to the general framework for encouraged investment areas. | Specific Incentives: Preferential tax rate of 10% for 15 years; 4-year exemption; 50% reduction for the subsequent 9 years (for qualifying projects). |
| Financial Liberalization | Foreign exchange control subject to general SBV regulations. | Pilot financial liberalization mechanisms for capital transactions, facilitating the repatriation of profits. |
Comparison of Key Criteria: Da Nang FTZ vs. Traditional Industrial Parks (IPs)
Typical Example: A semiconductor component manufacturer located in a traditional IP might spend 3–5 days on import inspection procedures. However, if situated within the production subdivision of the Da Nang FTZ, the enterprise can apply an on-spot temporary admission/re-export mechanism with 24/7 electronic procedures. This helps reduce logistics costs by 20% and shortens the production cycle by 15%.
Siglaw’s Support for Foreign Investors across 7 Strategic Locations of Da Nang FTZ
Da Nang has planned 7 strategic locations for the FTZ (including the Lien Chieu Port area, the Northern area of the new railway station, the High-Tech Park, etc.). To realize a project, in addition to business strategies, investors need a consultant with deep local expertise like Siglaw to manage risks and provide project-specific investment advice from the initial survey stage.
Market Research and Site Selection Support
Siglaw does not merely provide infrastructure data. Based on the investor’s actual operational needs, we provide regional analysis, competitive advantage mapping, and an assessment of eligibility conditions for preferential policies.
Lien Chieu Port Area: Ideal for logistics enterprises and high-quality warehousing.
High-Tech Park Vicinity: Best suited for chip manufacturing, integrated circuits, and AI industries.
Case Study: While advising a Japanese investor, Siglaw compared Location 1 (near the port) and Location 3 (near the airport). The results showed that although the rent near the airport was higher, given the nature of lightweight, high-value goods, the investor saved significantly on air freight operational costs compared to sea transport.
Advisory on Land Use Rights and Legal Requirements for Factories
Land use and factory construction are complex stages involving land planning and construction permits approved by various inter-disciplinary agencies. Levering our experience, Siglaw provides specific support by:
Accessing detailed 1/500 planning information at the 7 strategic locations.
Assisting in land lease procedures directly from the State or subleasing factories from reputable infrastructure developers.
Supporting investors in obtaining the Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC) within the optimal timeframe, ensuring the business lines are optimized for maximum incentives under current Vietnamese policies.
Typical Example: In land procedure support, Siglaw helps enterprises dissect regulations on “land use terms” (typically 50 years) and specific “building density” conditions within the FTZ. This allows investors to optimize factory floor area relative to total leased land, preventing waste in annual rental costs.
Siglaw: Your Strategic Partner in Da Nang, Vietnam
With a team of legal experts and investment consultants possessing profound practical experience, Siglaw is proud to provide End-to-End solutions, helping FDI investors realize projects in the Da Nang FTZ rapidly and safely. Our support process is designed through three pivotal stages:
Pre-investment Stage: Siglaw goes beyond providing basic information by focusing on in-depth feasibility analysis. We conduct quantitative benchmarking reports of Da Nang’s specific tax incentives against successful FTZ models in the region, such as Shenzhen (China) or Singapore. This allows investors to clearly visualize the profit picture and competitive advantages in operational costs before making a final decision.
Setup Stage: Siglaw asserts its position as a solid legal bridge. We act on behalf of investors to complete the entire complex legal documentation system, directly negotiating and working with the Da Nang High-Tech Park and Industrial Zones Authority. Our goal is to optimize licensing time, helping businesses quickly secure land use rights and factory premises in strategic locations.
Operation Stage: Siglaw continues to accompany the enterprise in post-clearance risk management. Our experts provide detailed advice on labor law compliance, optimization of customs processes in the non-tariff zone, and specifically, the control of Transfer Pricing issues. This ensures the business always operates within the legal corridor and maintains long-term tax incentives.
The Da Nang Free Trade Zone is the “high-speed train” leading FDI capital to catch the global supply chain shift. In a high-potential yet challenging environment of administrative barriers and planning complexities, the partnership of a professional legal consultant is the decisive factor. With a solid foundation and a team of seasoned experts, Siglaw is ready to meet the most stringent requirements of investors choosing Vietnam as their investment destination.
Please contact Siglaw Firm for comprehensive consultation.
Head Office in Hanoi: No. 44/A32 – NV13, Area A Geleximco, Le Trong Tan Street, Tay Mo Ward, Hanoi, Vietnam.
Email: vphn@siglaw.com.vn
Southern Branch: No. 103 – 105 Nguyen Dinh Chieu Street, Xuan Hoa Ward, Ho Chi Minh City, Vietnam.
Email: vphcm@siglaw.com.vn
Central Branch: VIFC DN – ICT Building, Software Park No. 2, Nhu Nguyet Street, Hai Chau Ward, Da Nang, Vietnam.
Email: vphcm@siglaw.com.vn
Hotline: 0961 366 238
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