Danang free trade zone earmarked as integrated business urban area

Danang city in central Vietnam has proposed the establishment of a free trade zone (FTZ) as an integrated business urban area to fully capitalize on the city's development advantages.

Such an area would support businesses as well as the needs of the larger community, including efficient transportation, diverse housing, green spaces, and easy access to essential services.

The Danang FTZ will feature multiple functional areas designed to capitalize fully on the city's development advantages, Tran Chi Cuong, Vice Chairman of the municipal People's Committee, said on Thursday.

“This special policy also aligns with the future expansion of key infrastructure works such as Lien Chieu seaport and the Danang International Airport,” he said at a forum titled "Danang Free Trade Zone – A new catalyst for the city's logistics industry.”

It would position Danang as a regional and international cargo trans-shipment hub, helping attract significant domestic and foreign direct investment (FDI) into the city and the central region, he said.

"The local government is working to finalize the proposal to submit it to the Prime Minister by the end of 2024, hoping to officially launch the zone and maximize benefits of the policy soon," he said.

Recognizing logistics as critical for Danang’s socio-economic development, the city has prioritized major infrastructure projects, including Lien Chieu seaport, the logistics center at the Danang International Airport, other logistics centers and inland ports, he added.

"It is also streamlining administrative procedures to foster growth in the logistics sector, ensuring smoother operations for businesses," he added.

Deputy Minister of Planning and Investment Truong Thanh Hoai said Vietnam is closely studying global models of free trade zones, and Danang is emerging as a key player in this area.

With its dynamic and modern business environment, the city is attracting both domestic and international businesses, he noted.

He said the Vietnamese legislature’s passage of Resolution No. 136 in June on organizing urban administration and piloting some distinct mechanisms and policies for Danang’s development includes the establishment of an FTZ.

This has opened the way for the city to test innovative policies that could serve as the foundation for future regulations on free trade zones, he added.

"The establishment of free trade zones in Danang and beyond will provide a significant boost to Vietnam’s logistics sector, enabling it to integrate more deeply into the global supply chain,” Hoai said.

Several experts said at the form that the FTZ would attract foreign investment, boost exports, create jobs, and contribute significantly to sustainable economic growth. It would also promote green development initiatives, from utilizing renewable energy to optimizing supply chains to minimize environmental impact, they added.

Tran Thi Hong Minh, director of the Central Institute for Economic Management, said that to realize the vision of turning the Danang FTZ into a sustainable and effective growth driver, it is important to invest in modern logistics infrastructure.

This includes upgrading seaports and airports, improving transportation connectivity, and developing advanced warehousing and distribution centers.

“A fully integrated and modern infrastructure system will help reduce warehousing costs, shorten transportation times, and enhance the competitiveness of the FTZ,” she said. She specifically mentioned the need to upgrade Tien Sa and Lien Chieu ports and expand their cargo handling capacity.

Developing domestic logistics hubs will help connect the FTZ to surrounding areas and expand its reach to international markets, she added.

Minh also recommended that the city establish a flexible legal framework and issue favorable policies to attract investment to the zone. Tax incentives and streamlined customs procedures will help businesses reduce administrative burdens and further facilitate international trade

She further highlighted the importance of embedding sustainability into the Danang FTZ by adopting high environmental standards and promoting digital transformation.

"The zone will be a powerful engine for Vietnam’s logistics sector. This is not only a significant step forward for Danang but also a contributor to the broader national economy, elevating Vietnam’s position on the global trade and logistics map," she said.