Proposal for Piloting the Establishment of a Next-Generation Free Trade Zone in Hai Phong.

Continuing the 44th session, on April 17, the Standing Committee of the National Assembly discussed the draft Resolution to replace Resolution No. 35/2021/QH15 dated November 13, 2021, on piloting several specific mechanisms and policies for the development of Hai Phong City.#Vietnam Freight forwarder#freight forwarding#cargo courier service#international shipping companies#shipping service company

This new Resolution outlines the pilot implementation of specific mechanisms and policies related to investment management; financial and state budget management; planning, urban development, resource and environmental management; science and technology management, innovation; and the establishment and operation of a next-generation Free Trade Zone (FTZ) in Hai Phong City.#Vietnam Freight forwarder#freight forwarding#cargo courier service#international shipping companies#shipping service company

Presenting the proposal, Minister of Finance Nguyen Van Thang emphasized that issuing a new Resolution to replace Resolution No. 35/2021/QH15 is necessary and aligned with the objectives set forth by the Politburo in Resolution No. 45-NQ/TW and Conclusion No. 96-KL/TW. This aims to remove bottlenecks, create breakthroughs, and generate widespread impact across the Red River Delta, contributing significantly to national economic growth. The draft Resolution sets out six major policy groups encompassing 41 specific policies. Among them, 17 policies concern the establishment and operational mechanisms of the next-generation FTZ in Hai Phong.

The pilot FTZ in Hai Phong will be a geographically defined area where exceptional, breakthrough mechanisms and policies are implemented to attract investment, finance, trade, and services; promote exports, industry, research and development (R&D); and attract high-quality human resources. The FTZ will consist of functional subzones: production zones, port and port logistics zones, commercial-service zones, and other functional types as stipulated by law.

These zones, meeting the criteria of non-tariff areas, will be subject to customs supervision and inspection, along with oversight by relevant state agencies as required by law.

The draft proposes to decentralize authority to Hai Phong People’s Council to decide on the establishment, expansion, and boundary adjustment of the FTZ, in connection with the Dinh Vu-Cat Hai Economic Zone and the southern coastal economic zone of Hai Phong, similar to how industrial zones are managed.

Hai Phong has sufficient conditions to establish a next-generation FTZ, aiming to become a key economic driver nationally and a leading city in the region and Asia.

The Hai Phong People’s Committee will exercise state management powers over the FTZ, similar to those for industrial and economic zones. The Hai Phong Economic Zone Authority, under the City People’s Committee, will directly manage the FTZ and provide public administrative services and business support for investors and enterprises.

To boost investment and business activity within the FTZ, the draft Resolution includes several special incentive policies: simplifying administrative procedures for investment, business, import-export, immigration, temporary residence, labor permits, land, and construction; optimizing investment incentives such as land and water surface lease fees, and taxes.

Except for projects under Article 30 of the 2020 Investment Law, investors in the FTZ may follow special investment procedures for sectors such as innovation centers, R&D centers, semiconductor integrated circuit industries, component and chip design and manufacturing, flexible electronics, semiconductors, information technology, etc.

Goods certified to meet national or international standards, or recognized under international treaties to which Vietnam is a member, will be exempted from specialized inspection.

To implement the “one-stop, on-site” mechanism, the draft Resolution authorizes the Hai Phong Economic Zone Authority to perform state management functions for the FTZ’s functional zones, including issuing certificates of origin; issuing, adjusting, revoking business licenses and retail establishment licenses; issuing, renewing, or revoking work permits and certifications for foreign workers exempt from permits.#Vietnam Freight forwarder#freight forwarding#cargo courier service#international shipping companies#shipping service company

Regarding tax incentives, the Standing Committee agreed to apply corporate income tax incentives similar to those in economic zones but for a longer period. However, they advised reconsidering the incentive duration. Enterprises subject to the global minimum tax will follow corresponding tax obligations. For personal income tax incentives, the draft lacks a clear application period, which should be specified.Committee members largely agreed with the six major policy groups and 41 specific policies in the draft.

At the session, National Assembly Chairman Tran Thanh Man emphasized the Politburo and General Secretary To Lam’s guiding principle: “Localities decide, localities act, localities take responsibility,” while the central government, National Assembly, and Government play roles of facilitation and supervision. In that spirit, the Chairman called for stronger and clearer decentralization and delegation policies in the draft.

Regarding the proposal to allow Hai Phong to convert over 500 hectares of rice land, the Chairman suggested expanding this scope, especially after a potential merger with Hai Duong province. He also emphasized the need for preferential fiscal mechanisms and allowing the issuance of special bonds such as green bonds or infrastructure bonds with preferential interest rates.

The Chairman also highlighted that science and technology policies must meet requirements for digital transformation, AI application, administrative reform, streamlined bureaucracy, environmental protection, sustainable development, and piloting green economic and renewable energy projects in industrial zones.

Agreeing with the unique, regionally unmatched policies for the FTZ, Vice Chairman of the National Assembly Nguyen Khac Dinh proposed omitting the term “next-generation” as the novelty lies in the policy content, not the terminology. Political and legal documents typically use the term “Free Trade Zone.”

He also emphasized the need for clear timeframes for all pilot policies and proposed that incentive policies define minimum and maximum thresholds or be capped based on competent authority’s planning and allocations.#Vietnam Freight forwarder#freight forwarding#cargo courier service#international shipping companies#shipping service company

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