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What is Industrial Park?

For each country, industrial park is one of the important highlights among the contribution to the development of the domestic economy due to the convergence of foreign investment capital to do business in the field of industry and production. With aim to providing general knowledge to Investors about kinds of industrial park in Vietnam, ATIM LAW FIRM introduces a series of article on the topic “Learning about industrial parks in Vietnam”, in which step by step introduces and analyzing some basic issues related to the industrial parks under applicable laws of Vietnam.

As mentioned in the previous article, from 15 July 2022, Decree No.35/2020/ND-CP (hereinafter referred to as “Decree 35”) issued by the Government on the management of industrial parks and economic zones entered into force and substituted for the Government’s Decree No. 82/2018/ND-CP dated May 22nd, 2018, prescribing the management of industrial parks and economic zones.

Article 2.1 Decree 35 stipulates that “Industrial park means an area that is enclosed by definite boundaries, specializes in production of industrial goods and provision of services satisfying the industrial production needs”.

Usually, an industrial park has the following basic characteristics:

• Located in an area that is enclosed by definite boundaries and low population density.
• Under the management of the Management Board of Industrial Parks of the province, city where the industrial parks are located. The Management Board of Industrial Parks is established by the Prime Minister, having legal status, having its account and seal, and shall be operated by using funds from annual State administrative management.
• The key activities of the industrial park are to specialize in the production and processing of industrial products and provide services for industrial production.
• Companies investing in and operating in industrial parks are usually given incentive policies, typically: corporate income tax, export tax, and import tax; land use tax exemption and reduction, and others provided by the laws.

In Vietnam, industrial parks are on a very strong development momentum. Specifically, according to the Report on establishment and development of industrial parks and economic zones in the first nine months of 2021, there were 41 investment projects to newly built/expanded/adjusted has been approved by the Prime Minister with a total area of ​​about 7,670 ha.

With the above growth rate, in the coming time, Vietnam needs to focus on promoting administrative reform in order to provide convenient administrative services for investors; further improve the quality of planning, synchronously build industrial park infrastructure; strictly control environmental issues; take care of the material life of workers and especially perfect the mechanisms and policies for the development of industrial parks.

Nguyen Pham Quynh Trang (Paralegal)