Vietnam Encourages Further Singaporean Investments in Da Nang
Vietnam is eager to encourage more Singapore investments into Da Nang, as its Vice-Chairman highlighted the city’s growth plans at an online seminar organized by the Singapore Business Federation (SBF) and the Asia Competitiveness Institute (ACI)-Lee Kuan Yew School of Public Policy on May 12, 2021.
Known as a provincial backwater for decades, Da Nang is now emerging into an economic powerhouse.
Da Nang recently amended its 2030 master plan, with a vision to 2045, which will see the city aim to be a socio-economic center for entrepreneurship, innovation, commerce, and finance in Southeast Asia.
Singaporean companies have invested in some 28 projects in Da Nang, totaling US$838 million. It makes Singapore the second-largest source of foreign investment in the city, accounting for 22 percent of registered capital in Da Nang. Moreover, among the 112 or so countries that invested in Vietnam in 2020, Singapore led with investments worth US$9 billion, or 31.5 percent of total investments.
Da Nang is actively seeking more Singaporean investments in areas such as tourism, seaports and airports construction, marine industries, high-tech manufacturing, automation, digital economy, education, and healthcare, among others.
Da Nang has a diverse set of industries, but the main sectors include tourism, high-tech manufacturing, information technology (IT), education, shipbuilding, and textiles. The local government wants services to make up 55 percent of Da Nang’s economy, industry to make up 42 percent, and agriculture to make up 1 percent.
Singapore is renowned for its world-class manufacturing system and skilled and adaptable workforce — the country was ranked third on the 2020 Global Talent Competitiveness Index.
What incentives are available for Singaporean investors in Da Nang?
Singaporean investors are eligible for a number of investment incentives, although this does depend on the given industry and the value of the investment.
Da Nang’s industrial parks (IPs) offer some of the more favorable conditions for foreign investors; the city has six IPs and one high-tech park — with the latter designated for companies that produce state-of-the-art products, such as computer chips and medical components.
The Da Nang High Tech Park provides corporate income tax exemption for the first four years, and five percent of the next nine years, followed by 10 percent for the ensuing two years. Investments valued at more than US$130 million will be subject to a 10 percent corporate income tax rate for 30 years.
The government wants to provide favorable conditions to investors who invest in specific geographical areas, such as the Da Nang High-tech Park, or encouraged industries, such as software.
The incentive schemes for the Da Nang High Tech Park, the software export sector, and the general supporting industry are highlighted in the following tables.
Infrastructure and regional connectivity
Da Nang serves as a gateway to Vietnam’s Central Region and is located on the eastern end of the East-West Economic Corridor (EWEC) — a key development program to promote the integration of Myanmar, Thailand, Laos, Cambodia, and Vietnam.
The city is also known for its synchronized transport network. The city’s railway station is the largest in the Central Region and the new Nang – Quang Ngai Highway connects Da Nang to the Chu Lai and Dung Quang Economic Zones.