The National Assembly on May 31 discussed a draft resolution on amending and supplementing Resolution No119/220 on piloting the urban government model and specific policies for Da Nang development.

One of the most noteworthy policies proposed by the government is setting up an FTZ in Da Nang. The FTZ will apply policies to attract more investments, especially in the fields of high technology, finance, trade, tourism and high-quality services.

National Assembly Deputy Hoang Van Cuong, vice rector of the Hanoi Economics University, said Da Nang has great advantages of its own, such as international port, international airport, and an international tourism center, so it can be both the place for goods exchange but also for international travel exchange.

“I believe that Da Nang has all conditions and potential to form an FTZ,” Cuong said, adding that the policy needs to be more ‘open’ to turn Da Nang into an open trade zone that can attract foreign resources.

If the FTZ model succeeds in Da Nang, this will help create a new model in Vietnam in attracting resources. If Da Nang has an attractive policy, environment and space, its FTZ would become a place to attract high-spending travelers.

Da Nang’s Vice Mayor Tran Chi Cuong said that forming an FTZ in Da Nang is the institutionalization of the Politburo’s Conclusion 79 on Resolution 43 and the PM’s Planning 1287 on developing Da Nang in the 2030-2045 period.

After considering the FTZ model in 150 countries, Da Nang believes that it has every condition to run an FTZ, which will not only boost development, but become the driving economic zone for the central region and Central Highlands.

The FTZ in Da Nang is expected to have different functional areas for production, sea and logistics services, and trade and services. 

Under the draft resolution, foreign investors that set up business institutions in the FTZ can enjoy investment incentives. They do not have to have investment projects and do not have to follow investment registration procedures before setting up their business institutions.

Foreign investors follow procedures to set up business institutions applied to domestic investors. The investment incentives, including land rent remission and corporate income tax, will be the same as for investment projects in economic zones.

Goods and services traded and supplied in Da Nang FTZ, between domestic and foreign sources and FTZs will be subject to laws on import/export tariffs, VAT, and luxury tax, as in non-tariff zone in economic zones.

The businesses which have investment projects in the functional areas of the FTZ will enjoy the priority mechanism in accordance with the laws on customs, except the conditions on import/export turnover.

Semiconductor hub

Experts said in order to turn Da Nang into a semiconductor center, the government needs to offer support by applying preferential schemes in income and accommodation costs for experts and scientists working in the semiconductor and AI industries in the city.

According to Minister of Investment and Planning Nguyen Chi Dung, of the 21 specific policies Da Nang authorities have proposed, the policies on microchip, semiconductor, AI, ICT, science and technology management and innovations have attracted the most attention. 

Dung believes that to develop the semiconductor industry, a high-quality workforce will play a decisive role. Da Nang needs to attract leading experts in Vietnam and the world to conduct research, lecture and start businesses.

Also, it needs to offer incentives to lure semiconductor firms, and create preferential policies for startups in semiconductors. The preferences could be free software, land/office rent reduction and preferential corporate income tax.

Some preferential policies have been drafted.

Da Nang can give support from the city’s budget, provided that the support is not more than 5 percent of total enterprises’ expenditures on machinery and equipment, on assets, production lines, equipment technology, and on new investment projects by strategic investors and partners in the semiconductor industry.

It also can give partial support to hire high-quality officers working at enterprises which are strategic partners in AI and semiconductor.

Da Nang could also approve projects that receive support from the city’s budget in training cost and refresher courses in AI and semiconductors. 

Thu Hang