Investment Incentive policies in Da Nang free trade zone of Danang from January 1, 2025

Investment Incentive policies in Da Nang free trade zone of Danang from January 1, 2025 (Image from the Internet)

To establish free trade zone in Danang from January 1, 2025

On June 26, 2024, the National Assembly passed Resolution 136/2024/QH15 regarding the organization of urban government and the pilot mechanism, specific policies for the development of Da Nang city.

From January 1, 2025, Da Nang will establish a free trade zone in connection with Lien Chieu Port.

Specifically, the Da Nang free trade zone will include functional areas defined in the decision to establish the Da Nang free trade zone by the Prime Minister of the Government of Vietnam, encompassing production areas, logistics centers, trade-service areas, and other types of functional areas as stipulated by law.

The functional areas within the Da Nang free trade zone will be separated from external areas by a solid fence, ensuring the inspection, supervision, and control activities of customs authorities and the state management activities according to the corresponding fields of relevant agencies as stipulated by law.

The purchase and exchange of goods between the functional areas of the Da Nang free trade zone and external areas will be regarded as import-export relations in accordance with the laws on customs, taxes, and import-export.

(Clause 1, 2 Article 13 Resolution 136/2024/QH15)

Investment Incentive policies in Da Nang free trade zone of Danang from January 1, 2025

According to Clause 5 Article 13 Resolution 136/2024/QH15, the investment incentive policies in the Da Nang free trade zone are specified as follows:

- The duration of the investment project for constructing and operating infrastructure in the functional areas of the Da Nang free trade zone, and projects of investors leasing land in the Da Nang free trade zone shall be applied as investment projects in economic zones according to the Investment Law;

- Foreign investors establishing an economic organization in the Da Nang free trade zone do not need an investment project and are not required to carry out the procedures for issuing or adjusting the investment registration certificate before establishing the economic organization.

Foreign investors shall follow the procedures for establishing an economic organization as applicable to domestic investors under enterprise law and other corresponding laws for each type of economic organization. The business registration authority or other competent authority, as stipulated by law for each type of economic organization, shall check the compliance with market access conditions for the sectors and trades with restricted market access for foreign investors under the Investment Law.

After establishment, the economic organization executing the investment project shall follow investment procedures in accordance with the Investment Law;

- The level of incentives, exemption, and reduction periods for land rent for investment projects constructing and operating infrastructure in functional areas of the Da Nang free trade zone shall be applied as projects constructing and operating infrastructure in functional areas within economic zones;

- The level and duration of corporate income tax incentives for investment projects in the Da Nang free trade zone shall be applied as incentives for investment projects in economic zones under the Corporate Income Tax Law;

- Tax application for goods and services purchased and supplied within the functional areas of the Da Nang free trade zone; between domestic and foreign areas with the functional areas of the Da Nang free trade zone shall be applied according to the Export Tax Law, Import Tax Law, Value-Added Tax Law, and Special Consumption Tax Law as applied to non-tariff zones in economic zones;

- Besides the investment incentives specified in this clause, investment projects in the functional areas of the Da Nang free trade zone shall also enjoy incentives as investment projects in economic zones under tax laws, land laws, credit laws, accounting laws, and other related legal provisions;

- For investment projects qualifying for different levels of investment incentives during the same period, investors may choose the highest incentive level.

More details can be found in Resolution 136/2024/QH15, which comes into force in Vietnam from January 1, 2025.

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