Da Nang is home to Viet Nam's first Free Trade Zone (FTZ). FTZ is a special economic area built to boost international trade and export manufacturing.
This zone operates on an "offshore operating model with an onshore footprint." It means, businesses can operate as if they are outside of Viet Nam for customs purposes, while still using the country's workforce and supply chains. This new model is a major step forward as Viet Nam tries to join global production and trade networks.
Why Da Nang Was Chosen for the FTZ
Experts believe Da Nang was selected because it offers rare and powerful advantages. Da Nang serves as a strategic gateway for the East-West Economic Corridor, which connects several countries across Southeast Asia.
The city already features a strong infrastructure base, including two international airports, three seaports, and several high-tech and industrial zones. Moreover, its location near the Lien Chieu deep-water port provides a major advantage for smooth logistics and shipping
Beyond its location, Da Nang offers a high quality of life that helps companies attract and keep top talent. The city has a manageable rhythm, a beautiful coastline, and modern services that make it easier for international experts and their families to relocate
Furthermore, Da Nang has a proven track record of implementing new government initiatives effectively. Thus, it gives investors more confidence in the local business environment.
Benefits for Investors and Businesses
The Da Nang FTZ offers a powerful package of incentives to improve the economics of any project. One of the biggest advantages is the corporate income tax (CIT) rate.
Eligible new projects can enjoy a low 10% tax rate for up to 15 years. This package often includes four years of total tax exemption, followed by another nine years at a 50% reduction. Additionally, many projects can receive full exemptions for land and water surface rent for their entire lease term, which can last up to 70 years.
For companies focused on trade, the "non-tariff" status is a game-changer. Goods imported from abroad and used only within the zone are not subject to import duties.
This allows businesses to import raw materials, process or pack them, and then export them with much better cash flow and cost control. Businesses can also settle payments with each other in foreign currency, reducing the friction of currency exchange.
A Hub for Talent
To ensure the FTZ succeeds, the government has included benefits for workers and experts. Eligible specialists and scientists working in the FTZ can receive a 50% reduction in their personal income tax for 10 years.
Foreign experts who stay for less than 12 months may not even need a work permit, making it easier for companies to bring in technical teams for short-term setups.
The FTZ is not just one large area but is spread across seven different locations. These zones are dedicated to different activities, such as logistics, high-tech production, and the digital economy. This layout allows the FTZ to integrate smoothly with the city's existing seaports and airports while creating space for future "green" and "smart" logistics models.
By combining tax breaks, a strategic location, and lifestyle advantages, Da Nang is positioning itself as a leading economic engine for both Viet Nam and the wider region.
