Repainting the business environment of Vietnamese Industrial zones and economics

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Midway through this July, Decree No. 35/2022/ND-CP prescribing management of industrial parks and economic zones (“Decree 35”) was adopted in place of Decree No.82/2018/ND-CP (“Decree 82”) in order to enhance the improve the investment and business environment and provide more benefits for the enterprises to “fixed residence” in the industrial park. With groundbreaking amendments, Decree 35 expects to put a fresh face to the enterprises operating the industrial parks (IP), and economic zones (EZ).

Industrial parks construction planning

The regulation on establishment, amendment and approval the IP, EZ development plans are abolished in Decree 35 and replaced with the regulation on construction and more in-depth development plans. Moreover, the locality is also given additional control over the IP management process. In particular, the provincial People’s Committee may consider proposing the grant of investment policy for the IP project to competent authorities in accordance with the locality’s development direction rather than the Government as before.

Decree 35 also adds situations in which planning is not required to shorten the project’s implementation duration such as:

  1. Forming the IZ subzone construction master plan in the area that already had a general master plan or the approved EZ general master plan; and

  2. Forming the IZ detailed construction master plan in an area that already had the approved subzone master plan;

Regarding the relocation of the IP planning area, the following steps are taken:

  1. If it is neither greater than 2% nor greater than 6 hectares of the IP scale, the People’s Committee will determine;

  2. If it is neither greater than 10% nor greater than 30 hectares of the IP scale, the People’s Committee will determine after asking for the opinion of the relevant Ministry.

In order to impulse the development of IP and EZ, Decree 35 introduces two new models, including: the specialized IZ, high-tech IZ, the non-tariff zones in the EZ. This is viewed as a solution to the infrastructure overload caused by fast development.

Requirements to converse the IP to urban – service development

The model of industrial – urban – service zones development, which is a progressive model applied in several countries, has been “kindled” since Decree 82. However, it was not until Decree 35 that the legal corridor for the conversion from original IP to urban – services development is foolproof. Specifically, in order to carry out this conversion, the IP must meet the following conditions:

  1. In accordance with the urban planning of the provinces, municipality.
  2. IZ is located in the inner city of special-class and class-1 urban directly under the province and the Central;
  3. The operating period of the IP up to the time of consideration is greater than 15 years or through half of the operation term;
  4. Having the consent of the investor implementing investment projects and 2/3 of the enterprises in the IP. Unless the project has expired or cannot be extended anymore; and
  5. Being environmentally, socially and economically efficient.

Allowing employers to stay in the IZ

After the pandemic, social security concerns and workers assistance are also an issue. With the aim of “having a steady life and job” for the employers, Decree 35 makes provision for the employers’ temporary residence and lodging in the IP.

Additionally, the lodging facility must be developed on the serviced property, while maintaining order and security, and not interfering with the enterprises’ business and production operation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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