Vietnam Free Trade Zones (FTZs): Opportunities for Foreign Businesses

Overview of Vietnam Free Trade Zones Initiative

Vietnam has begun establishing Free Trade Zones (FTZs) as part of a broader strategy to enhance trade competitiveness, attract FDI, and strengthen its role in global supply chains. FTZs allow companies to store, process, assemble, manufacture, or package goods without incurring import or export duties until products enter the domestic market. Goods within an FTZ are treated as being outside the national customs territory, reducing costs, minimizing delays, and streamlining customs procedures.

FTZs vs. Bonded Warehouses

Unlike bonded warehouses, where goods are stored temporarily and daily storage fees apply, FTZs offer significantly greater flexibility. Companies may retain goods for extended periods without time limits or additional storage fees. FTZs also operate on a much larger scale and serve multifunctional purposes, hosting factories, logistics hubs, financial services, consulting firms, retail operations, and exhibition centers, thereby forming integrated commercial ecosystems that support end-to-end industrial operations.

Global Precedents before Vietnam

Vietnam is by no means the first country to implement Free Trade Zones (FTZs). The modern era of free-trade or duty-free zones traces back to European trading enclaves in Asia, such as Macau, leased to Portugal in 1557, which operated as a key "entrepôt" with special trading privileges under Chinese sovereignty. Another prominent example is Hong Kong, ceded to Britain in 1842 and transformed into a major free‐port trading hub. During the 19th century, China itself established more than 80 “treaty ports” under extraterritorial arrangements, further demonstrating how special trade zones have a long historical pedigree. Later, the United States institutionalized its own system of Foreign-Trade Zones (FTZs) under the Foreign-Trade Zones Act of 1934. These zones, typically situated at or near U.S. ports of entry, treat goods as though they are outside U.S. customs territory until formally entered, allowing storage, processing, or manufacturing duty-free until importation into U.S. commerce. As of 2025, the U.S. maintains over 260 approved FTZ projects with approximately nearly 400 sub-zones or satellite sites, underscoring the deep integration of the FTZ concept in the U.S. trade infrastructure.

Opportunities for Foreign Companies – Where to Focus

In June 2025, Vietnam recorded a major milestone with the establishment of its first FTZ in Da Nang, which has already attracted interest from major investors. Beyond Da Nang in the central region, Vietnam is expected to continue implementing FTZs in both the northern and southern regions, most likely in Hai Phong and around Ho Chi Minh City’s port system, potentially transforming the country into a logistics hub for regional and global businesses.

For foreign investors, Vietnam’s FTZs are emerging hotspots where incentives and infrastructure will be concentrated. To maximize benefits, companies should consider placing manufacturing facilities, regional distribution centers, or service hubs inside or near these zones. In the North, Hai Phong is well suited for industrial manufacturing, assembly, and export–import logistics thanks to direct access to the Lach Huyen and Nam Do Son deep-sea ports, a strong industrial labor base, and excellent connectivity to Hanoi and the wider northern region. In the Central region, Da Nang is ideal for electronics, high-tech manufacturing, aerospace, fast-moving supply chains, IT, and innovation, supported by the planned Lien Chieu deep-sea port, an international airport, its strategic location on the East–West Economic Corridor, and a city brand that emphasizes technology and high quality of life, key factors for attracting foreign experts. In the South, the HCMC–Dong Nai–Ba Ria–Vung Tau cluster is best positioned for large-scale manufacturing, advanced logistics, e-commerce fulfilment, finance, and fintech, leveraging the Cai Mep–Thi Vai port complex, Long Thanh International Airport, dense industrial zones, and Ho Chi Minh City’s role as Vietnam’s primary financial and commercial hub. Logistics and warehousing companies may focus on the Cai Mep Ha FTZ, large manufacturers may consider the proposed Dong Nai FTZ near Long Thanh Airport, and regional distribution and trade service providers may target the future Can Gio FTZ and other HCMC-linked zones.

Regional FTZs in Vietnam

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Across all these FTZs, foreign companies with a go-to-market strategy can expect preferential corporate income tax policies (such as long-term reduced rates and initial tax), exemptions from import and export duties on goods traded within the FTZ, and streamlined “single-window” customs procedures. Ultimately, choosing the right FTZ depends on each company’s industry focus and logistics requirements:

• Da Nang FTZ (Central Region): suitable for manufacturing (electronics, semiconductors), logistics, and service industries such as MICE tourism.

• Joton FTZ, Hai Phong (Northern Region): ideal for pharmaceuticals, electronics, and agricultural processing for export.

• Cai Mep Ha FTZ, Ba Ria–Vung Tau / Ho Chi Minh Region (Southern Region): optimal for logistics and heavy industries such as shipbuilding and petrochemicals.

• Long Thanh FTZ, Dong Nai (Southern Region): well-positioned for production, logistics, financial services, and digital technology.

References

Thanh Pham (June 26, 2025), Positive signals from Vietnam’s first free trade zone in Danang, Vietnam Investment Review. https://vir.com.vn/positive-signals-from-vietnams-first-free-trade-zone-in-danang-131273.html

Tom W. Bell (April 11, 2017), How Special Economic Zones are Quietly Advancing Freedom, Learn Liberty. https://www.learnliberty.org/blog/quietly-creating-freedom-private-communities-and-special-economic-zones/

John C. Ramig (June 3, 2025), U.S. Foreign Trade Zones: A Tariff Mitigation Strategy That’s Right For Your Business?, https://chiefexecutive.net/u-s-foreign-trade-zones-a-tariff-mitigation-strategy-thats-right-for-your-business/

LegalClarity Team (Aug 19, 2025), How Many Free Trade Zones Are in the United States?, LegalClarity. https://legalclarity.org/how-many-free-trade-zones-are-in-the-united-states/?utm_source=chatgpt.com