1. What is an industrial park? What is investing in an industrial park?

According to Clause 16, Article 3 of the Investment Law 2020, an industrial park is an area with defined geographical boundaries, specializing in the production of industrial goods and providing services for industrial production. Industrial parks often play an important role in the economic development of a region or country, providing jobs, income and promoting industrial development.

Investors decide to invest in Industrial Parks by allocating capital to operate a project within a specific Industrial Park, depending on the business purpose, suitable to the conditions and capacity of the investors.

Some industries require operating in Industrial Parks, often due to regional and provincial planning. In the high-tech sector, investing in Industrial Parks becomes necessary to capitalize on infrastructure benefits and business community support. Particularly in manufacturing industries, locating operations in Industrial Parks ensures synchronization and convenience. Furthermore, it facilitates effectiveenvironmental problems, such as wastewater treatment, minizing impact on surrounding community.

2. List of some Industrial parks in Da Nang

• Danang Industrial Park.

Address: An Hai Bac ward, Son Tra district, Da Nang city

• Danang Seafood Service Industrial Park.

Address: Tho Quang ward, Son Tra district, Da Nang city​

• Hoa Cam Industrial Park.

Address: Hoa Tho Tay ward, Cam Le district, Da Nang city

• ​Hoa Khanh Industrial Park expansion.

Address: Hoa Khanh Bac ward and Hoa Hiep Nam ward, Lien Chieu district, Da Nang city

• Lien Chieu Industrial Park.

Address: Hoa Hiep Bac ward, Lien Chieu district, Da Nang city

• Hoa Khanh Industrial Park.

Address: Hoa Khanh ward, Lien Chieu district, Da Nang city

• Thanh Vinh Industrial Cluster

Address: Hoa Lien commune, Hoa Son, Hoa Vang district, Da Nang city

• Phuoc Ly Industrial Cluster

Address: Hoa Minh ward, Hoa Khanh Nam, Lien Chieu district, Da Nang city

3. How many forms of investment are there in Industrial Parks in Da Nang?

Article 21 of the Investment Law 2020 stipulates the following forms of investment:

• Investing establishing economic organizations;
• Investing capital contribution, buying shares, buying capital contributions;
• Implementing investment projects;
• Investing in the form of BCC contract;
• Investment forms and new types of economic organizations according to Government regulations.

4. What industries/projects must invest in Industrial Parks in Da Nang?

An industrial park is an area where industrial manufacturing enterprises are concentrated, with a defined geographical boundary and the absence of residential populations, aimed at optimizing infrastructure and mitigating environmental pollution; established by decision of the Government or the Prime Minister. There may be export processing enterprises in the industrial park. These are enterprises specializing in the production of export goods, providing services specialized in the production of export goods and export activities.

Industrial facilities in cities and residential areas that are not capable of handling environmental pollution will be relocated to industrial parks, in order to reduce the direct exposure of urban areas to the adverse impacts of industrial production (such as noise, dust, radiation, etc.). Specifically, enterprises with high environmental pollution potential, are often situated within industrial parks, such as chemical factories, seafood processing factories, dyeing factories, and steel factories. These enterprises often have to comply with strict regulations on environmental protection and labor safety, and being placed in industrial parks helps to strengthen control and monitoring capabilities.

The allocation of enterprises in industrial parks according to the orientation and encouragement of the Government, and of the province and locality in planning industrial parks mainly focuses on effective management and minimizing environment and community impact. Industrial parks are used with drastic measures in environmental treatment right from the planning stage. Within these parks, enterprises are required to have on-site waste treatment system that meets standards before discharging into the general system. Each industrial park must have a centralized wastewater treatment plant and be invested in and built in parallel with the investment in building industrial park infrastructure. Thus, environmental protection in industrial parks is better implemented than industrial facilities scattered in many different areas.

5. How many years is the investment project duration in the Industrial Park in Da Nang?

The operational duration of an investment project is the period of time during which the investment project is permitted to be implemented. This duration is considered, approved and adjusted by the competent authority approving the investment policy, and by the investment registration authority based on the objectives, scale, location and operational requirements of the investment project.

According to Article 44 of the Investment Law 2020, the duration of investment projects outside economic parks shall not exceed 50 years. However, investment projects implemented in areas with difficult socio-economic conditions, areas with particularly difficult socio-economic conditions, or investment projects with large investment capital but slow capital recovery, the duration of the investment project may be longer but not more than 70 years.

In addition, according to the guidance in Article 27 of Decree 31/2021/ND-CP, the operating period of the above investment project is calculated from the date the investor is granted the Decision on investor approval, the Decision on investment policy approval concurrently with investor approval or the first Investment Registration Certificate. During the implementation of an investment project, the investor is allowed to increase or decrease the duration of the investment project and provided it remains within the aforementioned limits.

6. What are the advantages of investing in Industrial Parks in Da Nang?

• Firstly, Da Nang is located in the center of Vietnam, with important transportation routes such as seaports, airports, and extensive road systems. This helps reduce transportation time and costs, optimizing the logistics process for businesses.
• Second, Da Nang boasts a diverse population and highly skilled workforce, which can make finding and retaining talented personnel easier for businesses.
• Third, Da Nang is generally known for its stable and positive investment environment, with local authorities actively supporting new projects and businesses.
• Fourth, industrial parks in Da Nang have many preferential policies for businesses investing in the Industrial Park.

For example, according to the provisions of Clause 1, Article 22 of Decree 35/2022/ND-CP, Clause 4, Article 19 of Circular 78/2014/TT-BTC as supplemented by Clause 5, Article 11 of Circular 96/2015/TT-BTC, and according to Clause 3, Article 20 of Circular 78/2014/TT-BTC as amended by Article 6 of Circular 151/2014/TT-BTC, when investing in Da Nang High-Tech Park, enterprises will be eligible for the following corporate income tax incentives as follows:

Preferential tax rate of 20% corporate income tax is applied to: Enterprise income from investment projects in industrial parks which are preferential investment areas is subject to investment incentives applicable to areas with difficult socio-economic conditions according to the provisions of law on investment.

*Areas with difficult socio-economic conditions are defined in the Appendix issued with Decree 31/2021/ND-CP.

The preferential tax rate of 16% corporate income tax is applied to the income of enterprises from investment projects in industrial parks, which is income from implementing new investment projects in the following fields:

• High-quality steel Production .
• Energy-saving products Production.
• Machinery manufacture and equipment for agricultural, forestry, fishery, and salt production.
• Irrigation equipment manufacture.
• Production and refining of animal feed, poultry and aquatic products; development of traditional industries.

Tax exemption for 2 years and 50% reduction of tax payable for the next 4 years for income from implementing new investment projects in industrial parks.

*Not applicable to Industrial Parks located in areas with favorable socio-economic conditions. Industrial Parks located in areas with favorable socio-economic conditions are specified in Clause 3, Article 20 of Circular 78/2014/TT-BTC.

7. What are the disadvantages of investing in Industrial Parks in Da Nang?

• First, although there may be preferential policies, the initial investment costs for constructing and developing factories, workshops, and other infrastructure can still be significant. The favorable location of Da Nang can create high competition among businesses in the same area, especially if the area develops strongly, after businesses have invested and infrastructure is improved. This could lead to an increase in land prices, raising fixed costs for businesses.
• Second, Da Nang is affected by weather factors and natural disasters, such as storms and floods, which can create risks for production and logistics activities. Enterprises need to strictly comply with regulations on environmental protection and waste management to ensure that their production activities do not affect the surrounding environment.
• Third, investing in Industrial Parks in Da Nang leads to legal risks such as lack of understanding of the law, which can lead to businesses violating legal regulations, especially those specifically applicable to Industrial Parks. Businesses may miss out on opportunities for tax incentives and other form of support.
• Fourth, lack of knowledge of legal procedures can lead to unclear contract terms and agreements, increasing the risk of future disputes, raising time and costs.

8. What does the investment profile in the Industrial Park in Da Nang include?

• Document requesting to implement investment project;
• Copy of ID card, Citizen ID card or passport for individual investors; copy of Certificate of establishment or other equivalent document confirming legal status for institutional investors;
• The investment project proposal includes the following contents: project investor, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, investment progress, labor demand, proposal for investment incentives, assessment of the project's socio-economic impact and efficiency;

• A copy of one of the following documents: financial statements of the last 2 years of the investor; financial support commitment of the parent company; financial support commitment of a financial institution; guarantee of the investor's financial capacity; documents explaining the investor's financial capacity;

• Proposing land use requirements; in case the project does not request the State to allocate land, lease land, or allow change of land use purpose, submit a copy of the site lease agreement or other documents confirming that the investor has the right to use the site to implement the investment project;
• Explanation of technology use for projects specified in Point b, Clause 1, Article 32 of the Investment Law, including the following contents: technology name, technology origin, technology process diagram; main technical parameters, usage status of machinery, equipment and main technology lines;
• BCC contract for investment projects in the form of BCC contract.

9. Lawyers guide the investment process in Industrial Parks in Da Nang

Step 1: Checking the legality of the Project proposal (legal regulations, necessary documents, and procedures to be followed)

Step 2: Carrying out procedures to apply for land lease in the Industrial Park with the Industrial Park infrastructure company

Step 3: Carrying out procedures for investment policy approval, investment registration, business registration

Step 4: Carrying out procedures on environment, fire prevention and fighting, construction, and business conditions.

10. Why should you hire a Lawyer when investing in Industrial Parks in Da Nang?

There are many important reasons for hiring a lawyer when investing in an Industrial Park in Da Nang, or any other investment project:

• Lawyers have in-depth knowledge of legal regulations related to investment, business, and real estate. This helps ensure that businesses will fully comply with the rules and regulations during the investment process.
• Lawyers can assist in navigating and completing necessary legal procedures, from business registration, licensing, to land and construction related procedures.
• In case of legal disputes, lawyers can represent and support businesses in resolving issues effectively, protecting the rights and interests of the business.
• Lawyers can provide advice on tax and financial issues, helping you optimize costs and comply with current tax regulations.
• Lawyers can participate in the negotiation process with the parties involved and assist in drafting, reviewing, and negotiating contracts, ensuring that the terms are reasonable and protect your interests.
• Investing in an industrial park often involves navigating stringent environmental regulations. A lawyer can ensure business’s compliance with these regulations and standards.
• Lawyers can help businesses identify and manage legal risks in advance, thereby minimizing the likelihood of significant legal problems arising in the future.

11. What do investment consulting lawyers in Industrial Parks in Da Nang do?

Consulting on investment in Industrial Parks

• Consulting on suitable business lines and Industrial Parks in Da Nang.

• Consulting on investment forms, conditions and procedures for investment in Industrial Parks; 
• Consulting on issues related to support policies and tax incentives for businesses to ensure benefits when investing in Industrial Parks;
• Consulting on issues related to potential risks and legal issues related to investment;
• Consulting on legal regulations related to investment and business activities in Industrial Parks.
• Consulting on other issues related to investment in Industrial Parks.

Drafting and implementing investment procedures in Industrial Parks

• Drafting business registration application, company charter...
• Contacting competent agencies and organizations to carry out procedures to apply for an Investment Registration Certificate according to the provisions of the Investment Law.
• Drafting and revising land lease contracts, factory lease contracts, etc.
• Guiding  on notarization, certification or investors appointment instructions.

Dispute settlement negotiation representative

• Representing and/or participating with investors in mediation and negotiation with local management agencies regarding tax and fee levels issues.
• Representing investors in dealings with competent state agencies, relevant agencies, organizations and individuals to request coordination in resolving disputes related to urban planning and land use policies.
• Representing investors in filing complaints, recommendations, and lawsuits to ensure investors' rights in investing in Industrial Parks.
• Representing the investor during the enforcement process to request the enforcement agency executes legally effective judgments.

12. Where to find a lawyer to advise on investment in Industrial Parks in Da Nang?

With the motto "Respect for justice - Respect for goodwill", Phong & Partners Law Firm provides all legal services with the highest quality - the result of dedication and cohesion, effective support of the entire system for our clients’s best interest.

Investing in industrial parks requires significant financial and operational commitments. To ensure that this process takes place smoothly and legally, having a team of professional and skilled lawyers to accompany will help investors to be more assured in this process with complex legal issues such as land, construction, fire prevention, investment, business, etc.

13. Some contents related to Investment Consulting Lawyers in Industrial Parks in Da Nang that investors are often interested in

(1) Latest investment industry trends in Da Nang

Sectors, fields, and priorities for investment attraction in the period 2021 - 2025, with a vision to 2030 in Da Nang according to Decision No. 3395/QD-UBND of the People's Committee of Da Nang City are as follows:

• Focusing on attracting investment and selecting relocating projects in high-tech, advanced industries and fields, environmentally friendly technology, clean energy, and renewable energy;
• Manufacturing of medical equipment, health care services, education and training, high-quality tourism, financial services, logistics and other modern services;
• High-tech agricultural production, smart agriculture, organic and ecological agriculture;
• Developing modern technical infrastructure, especially new industries on the basis of industry 4.0.
• Focusing on attracting investment in large projects producing export goods to participate in the global value chain.
• Disapproval and rejection of projects using backward technology, that consume excessive energy, that waste resources, that are not environmental friendly, that require are labor-intensive, especially those that have any affect on the countries defense or security

(2) Incentive policies when investing in Industrial Parks in Da Nang

Domestic and foreign investors investing in Da Nang City Industrial Parks enjoy investment incentives according to Government regulations on corporate income tax, import-export tax and land rent and other incentives depending on the type of enterprise registered for investment, investment capital scale, product export ratio, and investment location.

Corporate income tax incentives:

• Preferential tax rate of 20% of corporate income tax is applied to the income of enterprises from investment projects in industrial parks which are preferential investment areas and are entitled to investment incentives applicable to areas with difficult socio-economic conditions according to the provisions of the law on investment.
• Preferential tax rate of 16% corporate income tax is applied to enterprise income from investment projects in industrial parks, which is income from implementing new investment projects in the following fields:
  • Production of high-grade steel.
  • Production of energy-saving products.
  • Manufacturing of machinery and equipment for agricultural, forestry, fishery and salt production.
  • Manufacturing of irrigation equipment.
  • Production and refining of animal feed, poultry and aquatic products; development of traditional industries.
• Tax exemption for 2 years and 50% reduction of tax payable for the next 4 years for income from implementing new investment projects in industrial parks

*Not applicable to Industrial Parks located in areas with favorable socio-economic conditions.

Import tax incentives:

Investors are exempted from import tax on equipment, materials, means of transport and other goods to implement investment projects in Vietnam according to the provisions of the Law on Export Tax and Import Tax.

Carry forward business losses:

Investors who have made tax settlements with the tax authorities and incur losses may carry forward the losses to the following year; this loss shall be deducted from taxable income in accordance with the provisions of the Law on Corporate Income Tax. The period for carrying forward losses shall not exceed 05 years.

Depreciation of fixed assets:

Investment projects in investment incentive sectors and areas, and effective business projects are entitled to apply accelerated depreciation for fixed assets; the maximum depreciation rate is twice the depreciation rate according to the fixed asset depreciation regime.

(3) How is investing in an Industrial Park different from investing outside?

• First, regarding tax regulations and incentives: Industrial Parks are often regulated by local or national government tax and incentive policies. These incentives may include tax reductions, tax exemptions, and other support policies. Enterprises investing outside will have to comply with the overall tax and legal regulations of the country or territory in which they are operating.
• Second, regarding business registration procedures: Business registration in industrial parks is often simplified due to the support of management agencies and common registration procedures.
• Third, regarding land management and land use: Land management in industrial parks is often organized in a systematic manner, making it easy for businesses to lease land and use it for business development. In an outside investment environment, land management can be more complicated and requires compliance with local and national regulations.

(4) What to note when investing in Industrial Parks in Da Nang?

• When investing in Industrial Parks in Da Nang, investors need to consider and choose an industrial park suitable for their business lines.
• When leasing industrial land, investors need to consider the land use term and the land rental payment schedule. This will ensure the rights to use and exploit industrial land in accordance with the proposed business goals and plans.
• The scale of industrial park land can affect many factors such as infrastructure, service facilities, social facilities and business community in the area, the ability to attract labor resources...

Investors should consider renting industrial park land in a location that suits their production, business needs and product consumption market.