The National Assembly agreed to allow Da Nang to establish a free trade zone.

On the morning of June 26, with 452/459 delegates in favor, the National Assembly passed a resolution on organizing urban government and piloting a number of specific mechanisms and policies for the development of Da Nang City.

Scene of the morning session on June 26 - Photo: National Assembly Media

The Resolution takes effect from January 1, 2025. The pilot implementation period of specific mechanisms and policies for the development of Da Nang City is 5 years.

Agree to establish Da Nang Free Trade Zone

Accordingly, the National Assembly agreed to allow Da Nang to pilot a number of specific mechanisms and policies on financial management, state budget; investment management; planning management, urban, natural resources, environment; priority industries and occupations to attract strategic investors to the city. Da Nang is also allowed to pilot a number of specific mechanisms and policies on investment in developing semiconductor chips, artificial intelligence, information and communication, science and technology management, and innovation. Notably, the National Assembly agreed to establish the Da Nang Free Trade Zone associated with Lien Chieu seaport, with the goal of attracting investment, finance, trade, tourism and high-quality services. The Da Nang Free Trade Zone has functional areas specified in the Prime Minister's establishment decision, including production areas, logistics centers, trade - service areas and other types of functional areas according to the law. The relationship of buying and selling goods between the functional areas of the Da Nang Free Trade Zone and the outside areas is an export-import relationship according to the provisions of Vietnamese law on customs, taxes and export-import. Many preferential investment policies in the Da Nang Free Trade Zone will be implemented, according to the resolution passed by the National Assembly. In particular, the project of the investor subleasing land in the Da Nang Free Trade Zone is applied as an investment project in the economic zone according to the provisions of the law on investment.

Foreign investors establishing economic organizations in Da Nang Free Trade Zone do not have to have an investment project and do not have to carry out procedures for granting or adjusting investment registration certificates before establishing economic organizations.

In addition, investment projects in the Da Nang Free Trade Zone are given tax incentives, land rent reductions, etc. Enterprises with investment projects in functional areas of the Da Nang Free Trade Zone are entitled to customs priority for export and import activities in the city when meeting the conditions prescribed by the laws on customs, taxes, finance and related laws, except for the conditions on export and import turnover.

Do not allow abuse or exploitation of policies.

Before the National Assembly voted, there were opinions disagreeing with the regulation: "Foreign investors establishing economic organizations in the Da Nang Free Trade Zone do not have to have an investment project and do not have to carry out procedures for granting or adjusting investment registration certificates before establishing an economic organization". Explaining, the National Assembly Standing Committee said that the above regulation aims to create favorable conditions to attract multinational corporations and large enterprises to establish headquarters or representative offices and regional offices in the Da Nang Free Trade Zone. It is applied in the early stages when they want to research the market, consider adjusting the supply chain network, quickly shift capital flows and participate in direct investment when meeting the conditions. However, to ensure strictness, the resolution stipulates that foreign investors must still carry out the procedures for establishing economic organizations applicable to domestic investors according to the provisions of the law on enterprises and other laws corresponding to each type of economic organization. Regarding tax incentives, according to the National Assembly Standing Committee, free trade zones around the world apply many forms of investment incentives, including tax exemptions. Corporate income tax in free trade zones is lower than the regulations applied nationwide. Vietnam has gradually approached this new model and has tax incentives in export processing zones, duty-free zones, bonded warehouses, duty-free shops, etc. In addition, to strengthen management and strict control by state management agencies in applying specific policies, giving priority to export and import turnover, the National Assembly Standing Committee proposed that during the implementation process, the Government direct Da Nang and relevant agencies to strengthen inspections and checks to prevent abuse and exploitation of policies. Source: https://tuoitre.vn/quoc-hoi-dong-y-cho-da-nang-lap-khu-thuong-mai-tu-do-20240626084155795.htm