Positive signals from Vietnam’s first free trade zone in Danang

Positive signals from Vietnam’s first free trade zone in Danang

A decision by the government to launch the first free trade zone (FTZ) in Danang signals a strategic push towards deeper regional connectivity and global trade integration.

This strategic move positions Danang as a pioneer in implementing a model aimed at creating a dynamic growth engine for both the central region and the country at large.

On June 22, Danang authorities announced the prime minister’s decision to establish the first FTZ in Vietnam.

The zone, in Han River city, has immediately garnered interest from major investors, with several prominent domestic and international groups committing to early-phase investments.

The ceremony announcing the establishment of the first FTZ in Danang

Le Trung Chinh, Xhairman of Danang People’s Committee, emphasised the potential scale of the zone’s contribution. Once operational, the FTZ is projected to account for between 12 per cent to 26 per cent of the city’s gross regional domestic product (GRDP).

“This marks not only Danang’s position as a central economic hub for the central and Central Highlands regions but also affirms its role as a regional connector and gateway to the world economy,” he said.

A notable highlight of the launch ceremony was the announcement that Sun Group, one of Vietnam’s leading private conglomerates, will invest in three of the seven designated areas within the FTZ.

Dang Minh Truong, chairman of the board at Sun Group, stated that the group, which began its journey in Danang, considers this a pivotal milestone.

Sun Group’s developments will span approximately 645 hectares and include a variety of high-value projects: commercial-service complexes, luxury resorts, duty-free retail outlets, digital economic zones, and centres for IT and innovation.

“Danang being selected as the first location to host a free trade zone signals the city’s rising strategic importance and Vietnam’s commitment to reaching international standards in development,” said Truong.

He also expressed confidence that the combination of the FTZ and the upcoming International Financial Centre will create momentum for a breakthrough in the city’s economy, helping ensure sustained double-digit growth.

In addition to Sun Group, seven other major investors have committed to projects within the FTZ. These include Terne Holdings Group and The One Destination, BRG Group, Thanh Binh Phu My JSC, Lien Thai Binh Duong Import-Export Co., Ltd., Phuong Trang Investment JSC, Newtechco Group JSC, a consortium formed by Newtechco Group JSC and Phytopharco Vietnam Co., Ltd., and Saigon-Danang Investment JSC. This wave of early commitments reflects the high level of investor confidence in the new model.

Speaking at the event, Deputy Prime Minister Nguyen Hoa Binh underscored the broader significance of the FTZ, stating that Danang must seize this opportunity to become an integral part of the global economy.

“Special mechanisms will enable Danang’s economy to grow larger in scale, expand spatially, and deepen its connections with global economic centres,” he noted.

The deputy prime minister also referred to the potential future merger of Danang with neighbouring Quang Nam province, suggesting that the newly expanded Danang would have far greater development capacity.

Areas such as Chu Lai, Tam Ky, and the western districts would become new growth poles, provided infrastructure is improved and integration strategies are effectively executed.

“While focusing on the FTZ and the coastal economy, we must not forget the west of Danang, where development gaps remain. Infrastructure upgrades and improved living conditions in the mountainous areas must be part of the broader growth plan,” he added.

The FTZ initiative is supported by Resolution No. 136/2024/NQ-QH15, issued by the National Assembly, which authorises Danang to implement a pilot model of urban government along with a series of special mechanisms.

According to Chairman Le Trung Chinh, this resolution has strategic significance, setting the orientation for Danang to evolve into one of Vietnam’s major socioeconomic development centres, as well as a regional hub for innovation, finance, logistics, and international trade.

“The FTZ represents a breakthrough in institutional reform and offers a globally competitive development framework that can attract strategic investors, support green growth, and foster innovation,” Chinh stated.

The Danang FTZ will be structured into functional zones, including production and logistics centres, commercial and service areas, digital technology and innovation districts, and other specialised clusters in accordance with Vietnamese law.

The Danang FTZ proposed space

It will be closely linked with the planned International Financial Centre, creating a high-quality service ecosystem capable of driving growth not only in Danang but throughout the central and Central Highlands regions.

Danang authorities have already begun preparing implementation plans, identifying specific tasks and timelines to operationalise the FTZ.

At the same time, the city is working on proposals to request additional preferential policies from the National Assembly, government, and prime minister to ensure the FTZ remains competitive and adaptive to global standards.

Furthermore, with the prospect of merging with Quang Nam, the city is exploring new potential locations for future FTZ expansion to fully leverage the region’s geographic and economic advantages.

Chairman Chinh expressed confidence that the Danang FTZ would become an attractive destination for both domestic and international investors.

“We envision the FTZ as a vital link in global supply chains and a centre of production, services, and innovation. It will serve as a strategic growth pole for the central region and contribute meaningfully to the national economy,” he concluded.

VIR