Vietnam's Da Nang is set to establish a free trade zone (FTZ) aimed at attracting increased foreign investment to the coastal city. This FTZ will serve as a hub for export processing, logistics, commercial activities, and production zones. Notably, it is expected to integrate with the Lien Chieu Port, which is currently under construction and scheduled for completion in November 2025.
To stimulate investment, the Da Nang FTZ will introduce several trial policies and mechanisms during its initial five years of operation. Foreign investors within the zone will enjoy various incentives, including exemptions from corporate income tax, land rental fees, and import duty tariffs.
While the specific location and size of the FTZ are still under consideration, the Da Nang City People’s Committee aims to finalize its proposal and submit it to the central government by early 2025.
Connection to Lien Chieu Port
A pivotal aspect of the Da Nang FTZ is its link to the Lien Chieu Port, envisioned as a major maritime gateway for Vietnam. This deep-water port is designed to accommodate 40-50 million tons of cargo by 2050 and alleviate congestion at the overloaded Tien Sa port. Once operational, Lien Chieu Port will be capable of accommodating cargo ships with a deadweight tonnage (DWT) of up to 200,000, as well as container vessels with capacities ranging from 8,000 to 18,000 twenty-foot equivalent units (TEUs), and 30,000 DWT liquid cargo ships by that same year.
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Vietnam’s Da Nang to Develop Free Trade Zone (FTZ) to connect with Strategic Lien Chieu Port
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The development of the port will occur in two phases. The first phase, estimated to cost $140 million and funded by the local government, will involve constructing access roads, breakwaters, and shipping channels. The second phase, which requires approximately $2 billion in foreign investment, will focus on developing the wharf area, including eight container berths, six cargo berths, and associated facilities. The Adani Group has expressed interest in participating in this phase.
The FTZ will be located near the Da Nang International Airport and next to the Lien Chieu Port, which is currently under construction. The zone will be developed in several phases, with the goal of contributing 1–2% to the city's gross regional product (GRDP) by 2030.
The FTZ will offer a range of incentives to foreign investors, including:
Tax exemptions, including corporate income tax, land rent, and import duty tariffs
Streamlined investment procedures
Customs priority for export and import activities
The Lien Chieu Port is set to become a crucial logistics center for Vietnam’s north-south railway and the proposed Second East-West Economic Corridor.
The East-West Economic Corridor (EWEC) is a vital initiative aimed at enhancing economic growth and integration in Southeast Asia. Spanning approximately 1,700 kilometers, this corridor connects the Andaman Sea in Myanmar to the South China Sea in Vietnam, traversing Thailand and Laos.
The Da Nang City People’s Committee has proposed a Second East-West Economic Corridor that would offer a more direct route between Da Nang and Bangkok than the existing EWEC. The details of this project and its timeline are still under development.
Vietnam’s Broader Port Infrastructure Goals
Vietnam’s Da Nang to Develop Free Trade Zone (FTZ) to connect with Strategic Lien Chieu Port
Vietnam requires approximately $13.3 billion to develop its seaport system by 2030. The country’s cargo output is projected to reach between 1.2 and 1.4 billion tons by that year, with container cargo expected to range from 46.3 to 54.34 million TEUs.
The development of Da Nang’s Free Trade Zone and the Lien Chieu Port represents a significant advancement in Vietnam’s ambition to solidify its role as a key player in regional trade. By attracting foreign investment through strategic incentives and enhancing infrastructure to accommodate larger cargo capacities, Da Nang is well-positioned to become a vital hub in Southeast Asia’s economic landscape.
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A Gulfstream G200 Business Jet flies over Da Nang International Airport - Vietnam Air Charter Company
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