NORTHERN LOCALITIES IN NEW BID TO UTILISE EZS

New economic zones in Vietnam are expected to help encourage more investment from overseas for several localities in the northern region.

Vietnam already boasts over 40 economic zones, with nearly half of them located on the coastline

The government has made several decisions relating to the development of economic zones (EZs). In mid-January, Deputy Prime Minister Tran Hong Ha signed off on the Ninh Co EZ in the northern province of Nam Dinh. The complex, covering 14,000 hectares and situated across Nghia Hung and Hai Hau districts, aims to become a comprehensive and multi-functional coastal complex.

It also aspires to be a marine economic centre with complementary and reciprocal functions with other zones, creating momentum for the Red River Delta region and the Gulf of Tonkin economic belt.

Also in January, the port city of Haiphong announced the establishment of Southern Haiphong Coastal EZ. Covering 20,000ha, it is designed as a multi-sector zone focusing on high-tech industry, modern logistics services, smart urban areas, ecotourism, and pilot-free trade.

“The city is expected to receive continued support from the government, particularly in creating tailored mechanisms, policies, and incentives to draw in investment,” said Haiphong People’s Committee Chairman Nguyen Van Tung. “We ask investors and businesses to work with the city to develop this EZ.”

Meanwhile, the province of Hai Duong is also waiting for the Ministry of Planning and Investment’s appraisal on a new EZ. According to the draft, it is located in the west of the province, south of the Hanoi-Haiphong highway, and crossing the two districts of Binh Giang and Thanh Mien.

“The EZ will combine modern and synchronous technical and social infrastructure associated with environmental protection and ensuring national defence and security. It is expected to create new growth for investment attraction activity, especially at localities that do not often top foreign investment attraction lists,” said Le Ngoc Chau, Chairman of Hai Duong People’s Committee.

Elsewhere, the Thai Binh EZ has seen significant gains in attracting foreign direct investment (FDI) over the past four years, with Thai Binh province experiencing a surge in projects, particularly in the industrial sector.

The province attracted many big projects such as VSIP Thai Binh worth $212 million; the Pegavision Vietnam factory for manufacturing contact lenses with funding of $200 million; and a soju venture worth $100 million.

Besides this, a consortium of Tokyo Gas Company, North Kyuden Power Company, and Truong Thanh Vietnam Group is in the process of completing procedures for developing the Thai Binh LNG thermal power plant, which would have capacity of 1,500MW and cost nearly $2 billion.

In the 2021-2023 period, registered FDI attraction in the Thai Binh EZ and its industrial areas reached $3.74 billion, 4.4 times higher than the total FDI of the whole province since 2020. In 2023, the areas wooed over $3 billion, contributing to its ranking fifth in the country in pulling in FDI. Across 2024, it attracted over $1 billion in foreign-invested capital, according to Thai Binh’s Department of Planning and Investment.

An EZ in Vietnam is characterised by a favourable investment scheme of a local or regional government within a specified geographical area. These zones may be organised into functional areas including non-tariff zones and areas for industrial, entertainment, tourism, residential, administration, and export processing.

According to the Ministry of Planning and Investment, Vietnam currently has 44 EZs, comprising 18 coastal ones and 26 border gate units. To create new advantages to develop such zones smoothly and pull in funding, localities are seeking several incentive policies for the EZs.

For example, Hai Duong is expected to be authorised to have a partial adjustment in terms of planning in the EZ. The province is expected to be free from period-based investment allocations for the conversion of agricultural land using purpose for the area of over 200ha, said Chau of Hai Duong People’s Committee.

“Furthermore, we are seeking the government’s approval on tax incentives. In addition, the income suffering the personal income tax of individuals who work in research and development is expected to increase by 150 per cent compared to the current level. Normally, individuals earning business income from $4,000 per calendar year suffer personal income tax,” Chau added.

Source: VIR