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The development of industrial parks in Vietnam up to now

In the early years of reconstruction, the concept of export processing parks (“EPs”) and industrial parks (“IPs”), which is generally unpopular, faced many difficulties as a result of a centralized economy and an overburdened bureaucracy. The system of IPs in Vietnam has, nevertheless, progressively grown over the past 30 years, delivering great economic efficiency to many regions as well as aiding in the advancement of the country's economy and society. Certain outstanding information about the development of IPs in Vietnam will be summarized in this article by ATIM LAW FIRM.

The model of EPs and IPs was formed and developed on the basis of the "Renovation" policy set out at the Sixth Congress of the Vietnamese Communist Party in 1986, in order to implement the policy of developing a multi-sector, attract resources from all economic sectors to develop the country. Accordingly, the legal framework for IPs has also been continuously improved and closely linked with the context and requirement in the periods of implementing the 10-year socio-economic development strategy and the 5-year socio-economic development plan of the country from 1991 to present.

The period of 1991 – 2000

Before the “Renovation" policy of the Vietnamese Communist Party set out in 1986, foreign investment activities in Vietnam were still limited. Then, on the basis of the Vietnamese Communist Party's guidelines and policies and important legal documents, a legal corridor for the establishment and operation of EPs and IPs were promulgated, such as the Law on Foreign Investment 1987; Law on Domestic Investment Promotion 1994; Decree No. 322/HDBT dated October 18, 1991 on Regulations of EPs; Decree No. 192/CP dated December 28, 1994 on the Regulation of IPs.

In particular, the Law on Foreign Investment 1987 was a major turning point in economic thought in the modern history of Vietnam, creating a legal foundation for cooperation with foreign countries. Bien Hoa Industrial Park 1 is considered the first industrial park in Vietnam, established in 1963 by the Saigon government. Tan Thuan Export Processing Zone (Ho Chi Minh City) is considered to be the first export processing zone of Vietnam, established under Decision No. 394/CT dated November 25, 1991 of the Chairman of the Council of Ministers (currently known as the Prime Minister).

The development direction of IPs and economic zones (“EP s”) was also piloted at this time and subsequently reproduced. Accordingly, the Government issued Decree No. 36/CP dated Aril 4, 1997 on Regulations of IPs, EPs and high-tech zones. The Decree has supplemented regulations on building a master plan for IP development in the whole country approved by the Government, which is a basis for considering the development of IPs in other areas than the pilot area.

During the first 5 years of development (1992-1997), the country had about 40 IPs. After Decree 36/CP was issued, there was a "movement" to establish IPs in provinces and cities. By the end of 1997, the whole country had nearly 100 IPs established.

In 1998, the Government conducted a pilot project on a larger scale with the approval of preferential policies for Moc Bai border gate economic zone in Tay Ninh province and Lao Bao commercial zone in Quang Tri province.

The period of 2001 – 2010

Implementing the policy of strongly developing IPs, establishing a number of border-gate EP s and implementing a new model which is coastal economic zones, the legal basis for the establishment and operation of IPs, border-gate economic zones, and coastal economic zones continues to be completed. In 2001, the Prime Minister issued Decision No. 53/2001/QD-TTg dated April 19, 2001 on policies for border gate economic zones. The development planning of Vietnam's border gate economic zones up to 2020 was approved by the Prime Minister in Decision No. 52/2008/QD-TTg dated April 25, 2008.

Regarding the coastal economic zone, implementing the policy of the Politburo, in 2003, Chu Lai Open Economic Zone in Quang Nam province was the first coastal economic zone established. Then, in the period from 2004 to 2008, the Prime Minister allowed the establishment of 12 more coastal economic zones.

On March 14, 2008, the Government issued Decree No. 29/2008/ND-CP regulating IPs, EPs and economic zones, replacing Decree No. 36/CP dated April 24, 1997.

On September 23, 2008, the Prime Minister issued Decision No. 1353/QD-TTg approving the project "Planning for development of coastal economic zones of Vietnam up to 2020", which identifies shaping a system of 15 coastal economic zones by 2020.

The period from 2011 – now

IPs and economic zones in this period are oriented to continue developing and perfecting in depth, attracting quality and key investment. Implementing the above policy, the Prime Minister issued Directive No. 07/CT-TTg dated March 2, 2012 on rectifying the management and improving the operational efficiency of economic zones and IPs. , industrial clusters.

The Government has issued Decrees No. 164/2013/ND-CP dated November 12, 2013 and No. 114/2015/ND-CP dated November 9, 2015 amending and supplementing Decree No. 29/2008/ND -CP dated 14/3/2008 regulates IPs, EPs and economic zones. On May 22, 2018, the Government issued Decree No. 82/2018/ND-CP to replace the above Decrees.

The Prime Minister approves the project to review and adjust the planning on development of coastal economic zones and border gate economic zones of Vietnam up to 2020; a scheme to review and develop criteria for selecting a number of coastal economic zones for investment in the 2013-2015 period; select a number of coastal economic zones to focus on development investment from the state budget in the 2016-2020 period; select border-gate economic zones to focus on investment in the period 2013 - 2015 and period 2016 - 2020.

As of June 2022, the whole country has 563 IPs in the development planning of IPs in Vietnam (including IPs in coastal economic zones and border gate economic zones) with a total natural land area of ​​about 210.9 thousand hectares. Of the 563 planned IPs, 406 IPs have been established, including 361 IPs located outside the economic zones; 37 IPs are located in coastal economic zones, 08 IPs are located in border gate economic zones, including 04 EPs), with a total natural land area of ​​about 125.3 thousand ha, of which industrial land area is about approx. 82.6 thousand hectares. 26 border-gate economic zones were established in 21 provinces and centrally run cities with land borders, with a total area of ​​about 766 thousand hectares and 18 coastal economic zones were established in 17 provinces and cities. directly under the Central Government in the coastal area, with a total land and water surface area of ​​about 871.5 thousand hectares.

The occupancy rate of established IPs across the country is about 52.5%. If only IPs have been put into operation, the occupancy rate is about 70.9%. IPs and economic zones have attracted 10,148 domestic projects and 10,921 valid foreign-invested projects, with a total registered investment capital of about VND 2.52 million and 230 respectively 2 billion USD.

The development of IP infrastructure, the development of functional zones in the EP  of investors has a spillover effect, attracting other investors to invest in connection infrastructure and utility services serving the IPs, economic zones, and at the same time create state budget revenue to reinvest in technical infrastructure of localities. Thereby, step by step promote the urbanization process in the direction of transforming backward agricultural areas into developed urban-industrial areas. At the same time, IPs and economic zones are industrial production models that create favorable conditions for environmental protection and green growth and sustainable development.

Source:

Summary report proposing Decree to replace Decree No. 82/2018/ND-CP