Southern Vietnam's economic hub plans four free trade zones

Ho Chi Minh City is mapping out four free trade zones (FTZs) linked to seaports, railways, and international border gates, according to the municipal Department of Industry and Trade.

In its report on the proposed FTZs, the department said the zones will capitalize on the strategic advantages of seaport infrastructure to drive growth in the maritime economy, logistics and urban development.

The city aims to develop a smart port and logistics cluster linking Cai Mep, Thi Vai and Can Gio, and form a mega port powered by big data to optimize supply chains, cut emissions, and position itself as one of Southeast Asia’s leading international trade gateways.

One of the FTZs is slated to rise near the Can Gio international transshipment port project and the Ganh Rai Bay area, covering an estimated 1,000 to 2,000 hectares. The site is designed to position Can Gio as an international trade gateway with direct access to major shipping lanes.

Another, the Cai Mep Ha FTZ, sits near the Cai Mep-Thi Vai international port in the former Ba Ria-Vung Tau province. Covering roughly 3,700 hectares, it is planned with three functional zones - a transport hub, a logistics and industrial area, and a high-tech industrial zone integrated with urban and service facilities - and eight subzones.

The Bau Bang FTZ in the former Binh Duong province is positioned along the corridor linking the Cai Mep-Thi Vai port and the Moc Bai international border gate in neighboring Tay Ninh.

Located near the Bau Bang international railway station on the HCMC-Loc Ninh line, the roughly 100-hectare site is planned as a transshipment hub for goods from Vietnam’s Central Highlands and Cambodia to seaports.

The An Binh FTZ, also in the former Binh Duong province, is located near the Song Than inland container depot with convenient links to the Cai Mep-Thi Vai port and the Moc Bai border gate. Covering 100 hectares, it will handle both road and international rail transport.

The study on the FTZs has attracted interest and backing from both domestic and foreign investors, including the UAE-headquartered DP World - a global leader in logistics, and Vietnam’s conglomerates Vingroup and Geleximco, the department said.

However, there remain hurdles such as incomplete legal frameworks for FTZs and the absence of dedicated policies. Efforts to craft special mechanisms have also been hampered by inconsistencies with current regulations, including those on tax exemptions and investment incentives.

The department has proposed adding special mechanisms for FTZ s to the list of policies not yet covered in Resolution 98, with incentives designed to be open, flexible and diverse to attract investors and facilitate business activities in the zones.

Resolution 98 on granting HCMC a number of special mechanisms was adopted in 2023 by the National Assembly - Vietnam’s legislature.

An FTZ is a special economic area within a country’s territory that operates under preferential customs, tax and administrative regimes to promote trade, manufacturing, and logistics.

On June 12, the National Assembly passed a resolution that reduces the country's number of provinces and cities from 63 to 34. Accordingly, HCMC was merged with industrial centers Binh Duong and Ba Ria-Vung Tau to form the new HCMC.

After the merger, the new HCMC now spans more than 6,722 square kilometers and has a population of over 14 million. It comprises 168 commune-level administrative units, including 113 wards, 54 communes, and one special zone - Con Dao.

Experts said the merger paves the way for a closed-loop ecosystem of commerce, logistics, and manufacturing, capable of responding flexibly to both domestic demand and export markets.