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The Ministry of Planning and Investment (MPI) has recently unveiled a proposal for a new law focused on industrial parks, aiming to foster the development of large ecological industrial parks (EIPs) and attract high-quality investments.
This initiative is part of Vietnam’s broader goals of industrialization, modernization, green infrastructure, digitization, and embracing a circular economy.
Key Incentives and Policies
The proposal includes several incentive policies designed to support industrial park projects that align with Vietnam’s development goals. These incentives aim to promote the creation of highly specialized and smart industrial parks, encouraging investment in critical sectors such as:
- Digital economy
- Green economy
- Chips and semiconductors
- Innovative materials industries
The proposed law suggests offering preferential policies related to taxes, fees, and capital investment in these zones. Additionally, it aims to streamline administrative procedures, making it easier for businesses to invest and operate within these parks.
Businesses in Vietnam are actively advocating for a comprehensive regulatory framework for EIPs to incentivize sustainable investment. The current landscape is marked by complex and overlapping legal regulations and procedures, making it challenging to invest in Vietnam’s industrial parks and hindering sustainable development prospects. Specifically, the management of industrial parks is complicated by overlapping regulations and policies related to land, construction, and the environment.
The MPI expects the proposed law to serve as experimental measures to effectively address these challenges and promote the development of EIPs.
Overview of Vietnam’s Industrial Parks
In an article published on July 8, 2024, Nguyen Chi Dung, the Minister of Planning and Investment, reported that Vietnam has 425 industrial parks and manufacturing areas (MAs), occupying about 89,200 hectares of the country’s industrial land fund. Of these, 299 industrial parks and manufacturing areas are operational, attracting substantial investments and playing an important role in national and local economies.
An MPI report indicates that 416 industrial parks and over 1,000 industrial clusters currently contribute around 50 percent of Vietnam’s export turnover. Foreign direct investment (FDI) has significantly fueled the growth of industrial parks and economic zones in recent years, accounting for 35 to 40 percent of the nationally registered FDI. In the processing and manufacturing sectors, industrial parks have attracted 70 to 80 percent of the total registered FDI projects.
Challenges and Future Directions
Despite their economic benefits, the expansion of industrial parks and increasing industrialized manufacturing in Vietnam pose significant ecological risks and social challenges. Inadequacies persist in these parks’ services, social security, and industrial symbiosis between enterprises within an industrial park or between different parks.
Recognizing these challenges, Vietnam is committed to transforming traditional industrial parks into green and eco-friendly zones that adhere to global sustainable development standards. With assistance from international experts and organizations, the Vietnamese government has successfully piloted several EIPs.
As Vietnam transitions towards greener eco-industrial park models, businesses are encouraged to explore relevant opportunities in these zones, particularly if they are engaged in high-tech sectors like information technology, biotechnology, new materials technology, and automation technology.
The MPI’s proposal for a new law on industrial parks marks a significant step towards sustainable development in Vietnam. By fostering the development of ecological industrial parks and offering various incentives, Vietnam aims to attract high-quality investments and promote sectors crucial for its future growth. As further regulations are developed to facilitate EIP setups, businesses have a unique opportunity to contribute to and benefit from Vietnam’s commitment to sustainable industrialization and modernization.
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