Da Nang City has introduced a draft package of incentives designed to attract investment, particularly foreign direct investment (FDI), into its Free Trade Zone (FTZ). Key measures include:
(1) Streamlined establishment procedures: Foreign enterprises operating in the FTZ are exempt from investment licensing and project submissions for business registration. They may also access preferential customs procedures under current regulations, except for conditions linked to export turnover.
(2) Major tax incentives: Priority sectors[1] are eligible for a preferential corporate income tax (CIT) rate of 10% for 30 years, while other sectors may apply a preferential 10% rate for 15 years[2], in which, enterprises are exempt from CIT for the first four years and receive a 50% reduction in payable tax for the subsequent nine years. Specialists in Artificial Intelligence (AI) and semiconductors enjoy 5 years of personal income tax exemption. VAT and special consumption tax exemptions also apply in most cases.
(3) Long-term land incentives and support policies: Infrastructure developers may lease land for up to 70 years, and receive full land-rent exemptions for 3 years during construction and 11 years after project commencement. Additional benefits include infrastructure support inside and outside the FTZ, funding for innovation and startup projects, and the ability for infrastructure investors to deduct R&D expenses when calculating CIT.
According to the Da Nang Department of Industry and Trade, the city submitted detailed proposals on these incentives to the Government in October2025, and they are currently under review by the Standing Committee of the National Assembly of Vietnam, with consideration scheduled to be presented to the National Assembly at its December 2025 session.
To boost international competitiveness and position the FTZ as a new destination for global investment flows, Da Nang City has also proposed special mechanisms, including:
(1) Flexible land allocation: Allowing land allocation and leasing without auctions for priority sectors, and permitting the designation of investors to develop technical infrastructure connecting functional areas or connecting the FTZ to ports and border gates through public-private partnerships (PPP).
(2) Expanded rent exemptions: Granting full land and water-surface rent exemption for the entire lease term, except for residential and commercial-service projects.
(3) Greater foreign participation in aviation-related logistics: Allowing foreign investors to hold up to 49% equity in airport operations, cargo terminal services, ground-handling, airside services, and in-flight catering; up to 51% in international transshipment logistics centers at airports; and permitting their participation in transshipment, temporary import for re-export, and cargo transit activities.
Vietnam currently plans to establish FTZs in Da Nang City, Hai Phong City, and Ho Chi Minh City by 2026, expand to 6-8 FTZs by 2030 and 8-10 FTZs by 2045, contributing an estimated 15-20% of national GDP. Currently, there are more than 7,000 special economic and FTZs operating worldwide, while Vietnam still lacks a unified legal framework for such zones. This underscores the need to clarify FTZ definitions, develop competitive and feasible incentive packages, and ensure regionally balanced site selection supported by planning, infrastructure, technology, and workforce development.
Da Nang City’s FTZ, approved in June 2025, is the first official designated FTZ in Vietnam. Covering 1,881 hectares across Hai Van Ward, Ba Na Commune, and Hoa Vang Commune, it consists of 7 functional areas focusing on manufacturing, logistics, trade and services, digital technology, ICT, and innovation.
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References: 1. The Investor Vafie Magazine, 9 December 2025
2. Tuoi Tre, 6 December 2025
3. Vietnamnet.vn, 28 November 2025
4. Thu vien Phap luat, 14 June 2025
5. The Saigon Times, 5 December 2025
[1] Projects in high-tech zones, economic zones or special sectors namely renewable energy, software production, etc.
[2] In the Ho Chi Minh City FTZ, enterprises will be entitled to a preferential CIT rate of 10% for 20 years, in which they are exempt from CIT for the first four years and receive a 50% reduction for the subsequent nine years.
