Da Nang Hi-tech Park and Industrial Zones Authority Motivating Socio-economic Growth

Investment attraction into Da Nang Hi-Tech Park and industrial parks has produced very impressive outcomes in the past time, as the Da Nang Hi-Tech Park and Industrial Zones Authority is devoted to support investors and incentive policies are very appealing.

Strong appeal from industrial parks

Da Nang City currently has six centralized industrial parks (Hoa Khanh, Da Nang, Lien Chieu, expanded Hoa Khanh, Hoa Cam and Da Nang Seafood Service Industrial Park) with a total area of 1,066.52 ha, including 807.15 ha of rentable industrial area, of which 697.75 ha has been leased to investors (accounting for 86.45% of rentable area) and the remaining land area of 109.40 ha is in three industrial parks of Hoa Cam (13.43 ha), expanded Hoa Khanh (10.17 ha) and Lien Chieu (85.80 ha).

To date, Da Nang City-based industrial parks have attracted 462 investment projects, including 342 domestic projects with VND19,134.1 billion of registered investment capital and 120 FDI projects with US$1,161.1 million. Effective operations of tenants in industrial parks have helped promote local industrial development. Their industrial production value reached VND40,441.583 billion, accounting for 65.6% of the city’s total industrial value and their export earnings amounted to US$862.781 million, accounting for 52.2% of the city's exports. They have also significantly contributed to boosting local economic growth, forming industrial centers, accelerating local economic restructuring towards industrialization and modernization. Besides, industrial parks have helped increase budget revenue (accounting for 20% of the city's budget revenue annually) and create jobs for 76,520 workers. They have helped gradually raise management levels, skills, foreign language ability for employees, and social security.

Mr. Pham Truong Son, Deputy Director of Da Nang Hi-Tech Park and Industrial Zones Authority, said, to improve the outcome of investment attraction into industrial parks, the government of Da Nang City and the industrial parks authority have focused on bettering the investment environment and reforming public administrative procedures to increase publicity, transparency, clarity and convenience under the one-place single-window mechanism to provide the best support for investors. In particular, the authority trains its employees that “investors and businesses are the matter of service”; thus, it understands and supports investors before, during and after they get licenses and helps them carry out projects conveniently and quickly.

Ideal destination

Like six centralized industrial parks, the 1,128.40-ha Da Nang Hi-Tech Park is also a place of interest for investors. In early 2019, Da Nang City granted an investment license to Sunshine Aerospace Components Factory (US$170 million) invested by UAC Group in the Da Nang Hi-Tech Park. Licensed at the Spring Investors Talks 2019, the project helped boost the image of Da Nang Hi-Tech Park on mass media.

Until now, 17 projects have been licensed into Da Nang Hi-Tech Park and they hired 99 ha of land, including eight FDI projects with US$258 million of investment capital and nine domestic projects with VND5,272 billion. At present, three factories of Tokyo Keiki Precision Technology Company, NIWA Foundry Co. Ltd. and East Sea Technology Engineering Electrical Automation Co., Ltd. (ESTEC) have been completed and put into operation. Other projects are under construction.

To draw more investors into Da Nang Hi-Tech Park, the Da Nang Hi-tech Park and Industrial Zones Authority advised the Prime Minister to issue Decree 04/2018/ND-CP dated January 4, 2018 on mechanical preferential policies for Da Nang Hi-Tech Park. Accordingly, tenants in the park enjoy the highest investment incentives for hi-tech parks in the country. Specifically, an investment project of VND3,000 billion  (US$129 million) or more is entitled to a preferential tax rate of 10% for a period of 30 years. In addition, tenants are also entitled to other attractive incentives in Da Nang Hi-Tech Park: Corporate income tax (preferential income tax of 10% in 15 years; tax exemption in four years and 50% reduction in the next nine years); import and export tariff; land rent (land rental is free during the time of infrastructure construction, high-tech product manufacturing projects are free from land rent), infrastructure fee (25.9 US cents per square meter a year), land compensation expense (US$1.3 per square meter, free for projects of VND3,000 billion or more). “Once projects meet criteria of the Da Nang Hi-Tech Park, applied incentives are almost “giveaways” in a very long time, even almost throughout the project lifetime,” Deputy Director Pham Truong Son stressed.

He added that, with its geostrategic position (lying near to six industrial parks in Da Nang and the Central Economic Zone and lying on the gateway to the East-West Economic Corridor), Da Nang Hi-Tech Park aims to become a driving force for scientific, technological, economic and social development of the Central and Highlands regions in particular and the whole country in general. To ensure investment efficiency for the hi-tech park, Da Nang City will consider selecting and filtering projects and investors to ensure expected standards and capacity in the coming time to best capture local potential and comparative advantages.