Da Nang is home to Vietnam’s first free trade zone (FTZ). The FTZ is a special economic area created to revitalize international trade and export production.
This zone operates based on a “maritime operational model with onshore coverage.” This signifies that firms can operate as in the event that they were outside Vietnam for customs purposes, while still benefiting from domestic labor and provide chains. This latest model represents a significant step forward as Vietnam tries to affix global production and trade networks.
Why Da Nang was chosen for the FTZ
Experts consider that Da Nang was chosen since it offers rare and powerful advantages. Da Nang is a strategic gateway to the East-West Economic Corridor, which connects several countries in Southeast Asia.
The city already has a robust infrastructure base, including two international airports, three seaports and several other high-tech and industrial zones. Moreover, its location near the deep-water port of Lien Chieu provides a significant advantage for efficient logistics and shipping
Beyond its location, Da Nang offers a top quality of life that helps firms attract and retain top talent. The city has an easy-to-learn rhythm, beautiful coastline and modern services that make international relocation easy for experts and their families
Moreover, Da Nang has a proven track record of successfully implementing latest government initiatives. Thus, it gives investors greater confidence within the local business environment.
Benefits for investors and enterprises
Da Nang FTZ offers a strong package of incentives designed to enhance the economics of every project. One of the largest benefits is the company income tax (CIT) rate.
Eligible latest projects can profit from a low 10% tax rate for as much as 15 years. This package often includes 4 years of total tax relief, followed by an extra nine years with a 50% reduction. Additionally, many projects can obtain full rent exemption for the lease of land and water surfaces for the whole lease period, which might last as long as 70 years.
For trade-focused firms, non-tariff status is a game changer. Goods imported from abroad and used exclusively throughout the zone usually are not subject to import duties.
This enables firms to import raw materials, process or package them, after which export them with much improved money flow and price control. Companies can even settle accounts between themselves in foreign currency echange, reducing currency exchange friction.
Talent center
To make sure the success of FTZ, the federal government has provided advantages for workers and experts. Authorized specialists and scientists working at FTZ can obtain a 50% personal income tax relief for 10 years.
Foreign experts staying for lower than 12 months may not even need a piece permit, making it easier for firms to rent technical teams for short-term setups.
The free trade zone just isn’t only one large area, but is spread over seven different locations. These zones are dedicated to varied activities, comparable to logistics, high-tech manufacturing and the digital economy. This arrangement enables smooth integration of the free trade zone with town’s existing seaports and airports, while creating space for future “green” and “smart” logistics models.
Combining tax advantages, strategic location and lifestyle advantages, Da Nang is positioning itself as a number one economic driver for each Vietnam and the broader region.
