Free trade zones will be a new driving force for Ho Chi Minh City.

A free trade zone connected to the International Financial Center will create new impetus for the development of Ho Chi Minh City in the new era.

Báo Thanh niên•18/08/2025

Creating a boost for diversified development.

According to the research project on Free Trade Zones (FTZs) by the Ho Chi Minh City Department of Industry and Trade, the city plans to establish four FTZs linked to seaports, railways, and border gates, including Can Gio, the area near Cai Mep Ha seaport, An Binh ward, and Bau Bang commune (formerly part of Binh Duong province).

Ho Chi Minh City needs a free trade zone to create a boost for diversified development.

PHOTO: NGOC DUONG

Dr. Huynh Thanh Dien (Nguyen Tat Thanh University) analyzed: After the merger, Ho Chi Minh City has the leading transportation, industrial, and logistics infrastructure in the country. This is both an advantage and a pressure that requires the city to play a leading role in the region, worthy of the "super city" status entrusted to it by the central government. To achieve this, the city needs to redefine its role as the leading center of the regional industrial production value chain, from design and production to export. From there, the city will create a ripple effect of development to localities in the region such as the Southeast and the Mekong Delta... This must be a consistent direction in the city's development strategy, with the ultimate goal of forming a strong regional industrial value chain.

"The establishment of a Free Trade Zone (FTZ) is considered a crucial part of the new industrial strategy and needs to be implemented quickly to connect with the International Finance Corporation (IFC). This has actually been a long-standing goal of the city, but it hasn't been achieved yet. The current context has changed; we are not prioritizing tax incentives because Vietnam has already signed most economic agreements, aiming for zero tax rates by 2030. However, this zone will prioritize infrastructure and fee incentives to facilitate business and goods transit for foreign companies, making it as easy as in their own countries. We have an advantage, and if we don't act, they will move to Singapore. Singapore is currently saturated; if we don't seize this opportunity quickly to 'win customers,' we will miss out again," Dr. Huynh Thanh Dien observed.

Associate Professor Tran Hoang Ngan (National Assembly representative) calculated: To achieve double-digit growth in the coming period (starting at 10%), Ho Chi Minh City needs 8% based on mobilizing private and foreign investment; the remaining 2% lies in operating and exploiting the International Financial Center, Free Trade Zone (FTZ), and the Can Gio International Transshipment Port associated with the reclaimed land urban area. Simultaneously, it needs to leverage new growth drivers in the fields of science and technology, innovation, and the cultural industry. Looking at this structure, the FTZ directly contributes to the 2% growth group but also plays a crucial role in helping Ho Chi Minh City achieve the 8% capital mobilization target.

Mr. Ngan explained: In 2017, 2018, and 2019, Ho Chi Minh City easily achieved 8% growth based on traditional drivers, with total social investment accounting for 33%. However, since the Covid-19 pandemic, the city's total social investment has plummeted. Currently, to reach the 33% level of total social investment as in 2019, the city needs to mobilize approximately 660,000 billion VND for 2025. Therefore, Ho Chi Minh City needs a boost to attract social investment, as a basis for securing 8% growth, and Free Trade Zones (FTZs) will be the most effective tool. The new generation FTZ will create a boost for the diversified development of key economic sectors. The goal is to strongly attract domestic and foreign investment, promote international integration in advanced manufacturing technologies, high-quality commercial services, breakthrough innovation, attractive tourism, promising real estate, and modern healthcare. In the context of increasingly fierce competition among megacities, coupled with unpredictable economic and political developments worldwide that strongly impact export businesses and FDI, only a Free Trade Zone (FTZ) can help Ho Chi Minh City directly participate in the global distribution value chain and attract significant investment.

According to experts, free trade zones will boost Ho Chi Minh City's development, but they need to be properly planned to avoid a scattered approach. (PHOTO: INDEPENDENT)

"The success of the first pilot Free Trade Zone (FTZ) in Shanghai (SHFTZ, China), established in September 2013, is clearly evident. After more than 10 years, the SHFT has become a typical model of innovative economic development, contributing to the expansion of Shanghai's economy and attracting significant foreign investment. By the end of 2022, a total of 84,000 new enterprises had been established in the SHFT. The Pudong New Area alone attracted 18,691 new foreign investment projects, with cumulative registered capital reaching US$217.2 billion. The volume of goods trade increased from US$207.6 billion in 2013 to US$340.5 billion in 2022. China currently has 22 similar zones. Ho Chi Minh City currently possesses all the advantages and needs to quickly establish a new generation FTZ to create economic momentum in the new growth phase," Associate Professor Dr. Tran Hoang Ngan emphasized.

The FTZ should not be combined with the new Ho Chi Minh City FTZ.

While affirming the importance and urgency of Free Trade Zones (FTZs), Associate Professor Tran Hoang Ngan suggested that, given the current economic scale, area, and advantages, Ho Chi Minh City should only establish about two FTZs in the 2026-2030 period. Of these, the area near Cai Mep Ha seaport should be given top priority because the Cai Mep Ha Free Trade Zone has the Cai Mep - Thi Vai deep-water port connecting to Long Thanh International Airport (Dong Nai). If implemented synchronously, this will create a competitive advantage and generate new momentum in attracting new-generation investments along the East-West economic corridor from Moc Bai to Cai Mep - Thi Vai. Furthermore, Can Gio and Cai Mep - Thi Vai have also been planned to become a cluster of deep-water ports of regional and international significance. Therefore, the planning of the two FTZs in Can Gio and Cai Mep Ha could be combined into one, forming a strategic FTZ to complete the logistics infrastructure of the entire Southeast region. Regarding the Binh Duong area, if necessary, it should only be merged into one FTZ associated with industrial zones. "The most important thing is to build an institutional framework for the megacity of Ho Chi Minh City. In the short term, the Government needs to upgrade and further refine the specific mechanisms for Resolution 98, including special mechanisms for new-generation free trade zones. The mechanisms already approved for Da Nang and Hai Phong need to be studied for early application to Ho Chi Minh City," Associate Professor Tran Hoang Ngan proposed.

Dr. Huynh Thanh Dien also shared the view that the planning of the Free Trade Zones (FTZs) should be merged into one zone for the new Ho Chi Minh City, and that it is not possible to mechanically combine the planning of each old province and city into four FTZs for the new city. He analyzed: Previously, because each province and city developed independently, the principle was to have comprehensive planning from production input to distribution and output; it had to include all fields of commerce, services, logistics, industry… so every locality wanted to have an FTZ to attract investment. However, the core principle of the policy of merging provinces and cities is to replan the space in a way that assigns specific roles and links closely to leverage the advantages of each region. For example, with Ho Chi Minh City, the current reality is that industrial production is still overlapping, lacking synchronization, and without integrated planning. Therefore, the city should move all large-scale industrial production to the old Binh Duong area; research, development, and design should be done by the (old) Ho Chi Minh City; Exports and logistics services will be assigned to the former Ba Ria-Vung Tau province. This industrial core will create a ripple effect in the region. With such a clear division of roles, Ho Chi Minh City only needs one Free Trade Zone (FTZ) located in an area with a convenient deep-water port like Cai Mep Ha. The transshipment role of Can Gio port will be integrated into this, forming a strong international port cluster. Simultaneously, infrastructure will be re-planned according to this chain linkage, allowing goods from Binh Duong to be transported to the FTZ and connecting the core of Ho Chi Minh City with Ba Ria-Vung Tau in the most convenient way. Maintaining the current plan of building several FTZs in one city would be very wasteful.

Following behind in the "big game," Vietnam needs to experiment with mechanisms that are unprecedented in the world.

According to a report from the Ho Chi Minh City Department of Industry and Trade, the implementation of research on Free Trade Zone (FTZ) projects has received attention and support from domestic and foreign investors such as DP World, Vingroup, and the Geleximco Joint Venture. However, the project is facing some difficulties, such as incomplete legal regulations and a lack of specific policies. Furthermore, the development of specific policies is challenging due to inconsistencies with current regulations, such as tax exemptions and reductions, investment incentives, and land use. Therefore, the Department proposes supplementing specific mechanisms and policies applicable to FTZs into the existing specific mechanisms and policies not included in Resolution 98. The proposed incentive policies should be open, flexible, and diverse, creating incentives to attract investors and facilitating production and business activities within FTZs.

Financial and economic expert, Dr. Nguyen Tri Hieu, believes that Vietnam does not yet have a Free Trade Zone (FTZ), so the first thing to do is to build a legal framework. It is necessary to clearly define what an FTZ is? What types of goods can be traded within the zone and what tax exemptions and reductions apply? Goods that may be tax-exempt within the zone will be subject to different tax rates when traded with the outside world. Another issue often of concern to investors is foreign exchange policy; what currencies can be traded within the FTZ?… Once a common legal framework is in place, localities can use it to assess their suitability and advantages for establishing an FTZ that would attract investors…

"Free Zones (FTZs) are a completely new issue in Vietnam, so a specific and clear legal framework is needed. It's unacceptable for each locality to propose its own separate mechanism, creating policy inconsistencies within Vietnam. The legal framework should boldly include pilot mechanisms (sandboxes) on finance, personnel, management, etc., for 1-2 years. Afterward, the experience should be summarized and adjusted to suit Vietnam's reality before being officially implemented. Because even though many countries have FTZs, we cannot simply copy and apply those mechanisms because Vietnam has its own unique conditions," shared Dr. Nguyen Tri Hieu.

Dr. Do Thien Anh Tuan, from the Fulbright School of Public Policy and Management, also believes that the FTZ model can become an effective "institutional laboratory," allowing for the testing of new policies within a controlled scope before expanding to the national level. Vietnam needs to dare to think big and experiment with mechanisms unprecedented in the world, from policies to attract international talent and financial incentives to the application of digital technology in management. He proposed that the government needs to build a comprehensive, groundbreaking policy system that is appropriate to the context of international integration. First, it should apply strategic financial incentives and support mechanisms. Vietnam needs to shift from "tax incentives" to "direct financial support." Strategic investment support funds (SIPFs) could be established to provide direct financial subsidies to multinational corporations affected by global minimum tax mechanisms.

Furthermore, Vietnam can maintain some indirect incentives such as exemption from import taxes on raw materials, components, and machinery for export production; implement flexible tax policies for e-commerce and cross-border logistics; allow testing of new financial models such as private equity funds, fintech sandboxes, and digital currencies; or provide long-term land and infrastructure lease fee exemptions and reductions, combined with clear commitments to policy stability and investment protection. This should be accompanied by a flexible legal environment and advanced institutions. It is necessary to boldly reduce administrative procedures to the maximum extent, applying a one-stop shop model to handle all investment, land, and import/export procedures. In particular, an "institutional sandbox" mechanism should be applied, allowing for the testing of unprecedented policies in areas such as digital finance, digital banking; high technology, artificial intelligence, big data; smart logistics and cross-border services; and sharing economy models and digital platforms. Next, we need to develop internationally competitive talent attraction policies, such as implementing special visa and long-term residency policies for investors, experts, engineers, and highly skilled workers; and implementing a market-based salary system, not bound by the state's administrative salary framework.

We don't need many free trade zones.

Free trade zones (FTZs) are an excellent economic model, but the tendency towards a scattered approach should be avoided. The fact that every province and city proposes establishing an FTZ could lead to the dispersion of resources, overlapping functions, unhealthy competition, and reduced investment efficiency. Even Ho Chi Minh City, which is in the process of becoming a megacity after the merger, only needs to focus on building one effectively operating FTZ to create new impetus for the city's future development.

Dr. Nguyen Tri Hieu

Proposal to plan four free trade zones in Ho Chi Minh City.

1. The Can Gio Free Trade Zone in Binh Khanh commune has been planned according to a decision of the Prime Minister. The project has a scale of approximately 1,000 - 2,000 hectares, connected to the Can Gio international transshipment port and Ganh Rai Bay.

2. The Cai Mep Ha Free Trade Zone has also been approved, covering an area of over 3,700 hectares and divided into 3 functional zones with 8 sub-zones.

3. The Bau Bang Free Trade Zone (formerly Bau Bang District, Binh Duong Province) has been planned and is located along the axis connecting Cai Mep - Thi Vai Port and Moc Bai border gate, Tay Ninh.

4. The An Binh Free Trade Zone is located in the former Binh Duong province. It is near the Song Than inland port and has convenient connections to the Cai Mep - Thi Vai port and the Moc Bai border gate. Spanning 100 hectares, it serves both international road and rail transport.

Source: https://thanhnien.vn/khu-thuong-mai-tu-do-se-la-dong-luc-moi-cho-tphcm-185250817214811538.htm