The development of a law on IPs and EZs became pressing to improve the legal framework and ensure consistency in policies to create a favourable investment climate and promote production and business.
The Ministry of Planning and Investment is seeking public comments for a draft law on industrial parks (IPs) and economic zones (EZs) to create breakthroughs for the development of IPs and EZs in the context that Vietnam aims to increase high-quality investment.
The ministry said after 30 years of development, IPs and EZs have contributed significantly to the socio-economic development of Việt Nam and the country’s industrialisation and modernisation as well as creating jobs, improving human resource quality and increasing productivity.
However, there have been a number of problems arising during the development of IPs and EZs, the ministry said.
The ministry pointed out that limitations in planning and capital attraction, coupled with slow renovation of IP and EZ models, failed to meet requirements.
Linkages between IPs and EZs and with outside areas remains limited while the development of IPs and EZs has lacked sustainability and balance in economic, environmental, and social development. In addition, land use efficiency has remained low, the ministry said.
The limitations were caused by a number of reasons, one of which was an incomplete institution and legal framework related to IPs and EZs. The IPs and EZs need breakthrough developments to set a new development direction, the ministry said.
According to the ministry, the legal framework regulating the operation of IPs and EZs has not seen fundamental changes. Vietnam only has a decree on managing IPs and EZs while the operation of IPs and EZs relates to many other sectors, including planning, investment, enterprise, land, construction, environment, housing, and labour.
This is causing a lot of difficulty in the development of IPs and EZs towards new models, the ministry said.
The investment incentives and support policies of Việt Nam in general and of IPs and EZs in particular are not effective enough to direct investment flow, the ministry said.
The existing investment incentives for IPs and EZs have not taken into account the specific development conditions of each zone and there is no distinction between manufacturing and service sectors.
There is also a lack of policies to promote linkages of projects in IPs and EZs, which made it difficult to attract investment in IPs and EZs in localities with difficult socio-economic conditions, encourage the foundation of specialised zones or linkages among projects to establish value chains.
The inconsistencies in IPs and EZs policies also cause investors to hesitate to increase their investments.
The development of a law on IPs and EZs becomes pressing to improve the legal framework and ensure consistency in policies to create a favourable investment climate and promote production and business.
Under the draft, the ministry proposed six group of policies, including development orientations of IPs and EZs in line with regional and provincial planning, infrastructure, incentives for IPs and EZs in localities with difficult socio-economic conditions and incentives for projects which contributed to promotinge industry linkages, the promotion of new IP and EZ models, and incentives to enterprises and State management.
The draft law is expected to be submitted to the 15th National Assembly for consideration at the sixth meeting in October 2023 and passed at the seventh meeting in May 2024.