New forms of Industrial and Economic Zones

On 28 May 2022, the Government issued Decree 35/2022/ND-CP regulating the management of Industrial Zones and Economic Zones, which took effect and replaced Decree 82/2018/ND-CP as of 15 July 2022 (“Decree 35”). Below are some notable changes regarding the management of Industrial Zones and Economic Zones:

New form of Industrial Zone and Economic Zone

Apart from (i) Export Processing Zone, (ii) Auxiliary Industrial Zone, and (iii) Eco-Industrial Zone, Decree 35 supplements two new forms of Industrial Zones, namely (iv) Specialized Industrial Zone and (v) High-Tech Industrial Zone. While a “Specialized Industrial Zone” is required to have at least 60 percent of its industrial land for lease or sub-lease allocated to projects in specific industries, a “High-Tech Industrial Zone” is an Industrial Zone with at least 30 percent of its land for lease or sub-lease allocated to projects in sectors of high-technology, IT, innovative renovation, R&D, education and training. Furthermore, the projects with advanced/new/clean technologies meeting the socio-economic conditions of Vietnam, together with technology incubators, are also subject to this kind of industrial zone.
In addition to the current Economic Zones (i.e., Coastal and Border-Gate Zones), Decree 35 regulates a new kind of Economic Zone as a “Particular Economic Zone”. This Economic Zone is established in key economic regions, development corridors or areas with dynamic roles as determined in regional plannings.

Additional conditions for projects of infrastructure development in Industrial Zones

Under Decree 35, there are some additional conditions applying to projects of infrastructure development in Industrial Zones (e.g., phasing of investment with respect to projects with land area of more than 500 hectares (or 1,000 hectares for sectoral clusters and complex projects ), reserving at least 5 hectares or 3 percent of the industrial land of the project for small-medium enterprises, supporting industrial enterprises and other enterprises eligible for business site support in accordance with laws on lease or sub-lease, etc.

Also, Decree 35 imposes certain conditions on developers of Industrial Zone projects. They accordingly are required to satisfy the statutory conditions on (i) real estate business and (ii) land lease, land allocation or conversion of the land use purpose for implementing these projects.

Conclusion

The extension of the forms and the addition of specific regulations on the management of Industrial and Economic Zones in this Decree would create a sufficient legal frame to attract foreign and domestic investments. Also, that brings more choice and potential opportunities for foreign investment projects, not only in infrastructure development but also in other business (e.g., electronics and components manufacturing, supporting industries in such industries, high technology) in these Industrial and Economic Zones.

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