The law-making National Assembly (NA) on Wednesday gave its nod to Da Nang City in central Vietnam to establish a free trade zone (FTZ), the first of its kind in the Southeast Asian country.

The NA passed a resolution on the organization of urban administrations and the trial of some special policies and mechanisms for the city’s development.

The resolution will come into effect on January 1, 2025 and special policies and mechanisms will be piloted for five years.

The FTZ, which will encompass Lien Chieu Sea Port, is aimed at attracting investment in finance, trade, tourism, and high-quality services.

The zone will feature functional areas, including manufacturing, logistics, and trade-service areas, among others.

The FTZ will function as a hub for import-export processing in line with Vietnamese law on customs, taxes, and trade.

It will offer preferential policies to attract investments in accordance with the approved resolution.

Projects of investors that lease land in the zone will enjoy policies like those in economic zones.

Foreign investors will not be required to launch projects or complete procedures to apply for or adjust investment certificates before setting up economic establishments in the FTZ.

The policy aims to lure multinational and large groups to establish representative offices in the zone. It will be applied in the initial period when enterprises study the local market before adjusting their supply chains and making investments, according to the NA’s Standing Committee.

Developers of projects in the zone will be offered tax and customs incentives and land rental reductions.

According to the resolution, the NA also granted Da Nang the approval to pilot special policies in finance, the state budget, investment, planning, urban, and natural resource and environment management, as well as in priority sectors to attract strategic investors.

The coastal city was permitted to pilot special policies in the investment and development of semiconductor chips, AI, information and communications, and the management of science, technology, and innovation.

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