Many Export Processing Zones and Industrial Parks will be converted
Being a leading locality in the development of export processing parks and industrial zones (EXP-IZs), Ho Chi Minh City is making efforts to have specific investment attraction strategies and a new way to promote the attractiveness of the investment climate.
In 1991, Tan Thuan EPZ - the first EPZ in Ho Chi Minh City and the first in the country - created a strong impression, gradually turning 300ha of land along the Saigon River into a concentrated production area for domestic and foreign enterprises with annual export sales of over US$2 billion creating jobs for more than 60,000 workers.
However, the land lease of Tan Thuan EPZ will expire in 2041. From now until then, if there is no clear and specific next plan, it will be very difficult to attract new investment, or difficult to expect existing businesses to increase their investment.
In April 2022, after many years of preparation, Ho Chi Minh City issued a Project on orientation for the development of export processing zones and industrial parks in the period 2023-2030 with a vision to 2045. According to the pilot scheme, five export processing zones and industrial parks such as Cat Lai Industrial Park, Tan Binh, Hiep Phuoc, Binh Chieu and Tan Thuan Export Processing Park will be converted.
In particular, from now until the end of the land lease term in 2041, Tan Thuan Export Processing Park will be for projects in the high-tech field. After 2041, Ho Chi Minh City will keep this EPZ land fund for industrial development with the criteria of attracting investment according to the city's orientation.
However, up to now the pilot conversion of these five export processing and industrial parks is only at the scientific project carried out by the Ho Chi Minh City Development Research Institute. Meanwhile, investors in export processing parks and industrial zones with short land lease terms are concerned about making new investments or expanding investment scale.
Currently, Ho Chi Minh City has 17 industrial parks and two export processing zones on a total area of more than 5,000 hectares. To date, there are nearly 1,700 valid projects, with a total registered investment capital of US$12.41 billion, of which 55 percent is foreign investment. In 2023, the total foreign investment capital attracted to export processing zones and industrial parks reached $221.11 million, an increase of 12.47 percent over the same period in 2022.
Regarding domestic investment, the southern metropolis has attracted more than VND18,500 billion (equivalent to $788.5 million), an increase of 123.7 percent over the same period in 2022. With many advantages in location, high-quality human resources, and a large market, Ho Chi Minh City still has great potential for investment attraction into these special parks and zones.
In recent programs to appeal to foreign investment, Ho Chi Minh City has proposed a number of investment areas comprising Hiep Phuoc Industrial Park Phase 2 on the area of 597ha and Phase 3 of 500ha, Pham Van Hai I Industrial Park on 379ha and Pham Van Hai II on 289ha. Among them, Pham Van Hai Industrial Park I and II were added to the planning of industrial parks in Vietnam in May 2023 approved by the Prime Minister.
Currently, Ho Chi Minh City is planning to deploy these two industrial parks. In the immediate future, many interested investors including large domestic and foreign corporations have shown their interest in the two parks. Large domestic and foreign corporations paying attention to the two parks have proposed to find out investment information. With existing industrial parks, in addition to issuance of plans and conversion road-maps, the city authorities should remove bottlenecks that businesses complained about especially the issuance of land use rights certificates and construction permits.
Chairman of the Ho Chi Minh City Business Association Nguyen Ngoc Hoa pointed out that a business in Hiep Phuoc Industrial Park has paid land rent for 50 years, but up to now, it has not been granted a land use right certificate, so it cannot mortgage the bank. Additionally, it cannot apply for construction permits to expand production, because the land price has not been determined.
According to Head of the Management Board of Export Processing and Industrial Parks in Ho Chi Minh City Hua Quoc Hung, in the coming time, to attract investment capital, the board will increase contact to support and advise investors to seek opportunities to expand the project.
Ho Chi Minh City will also promote the ‘one-stop’ mechanism and the Management Board of Ho Chi Minh City Export Processing and Industrial Parks will be given authority to quickly resolve procedures for investors in many fields. In implementing the Resolution 98/2023/QH15, the Management Board of Ho Chi Minh City Export Processing Zones and Industrial Parks can resolve some procedures under the authority of the Ho Chi Minh City People's Committee such as appraisal and approval of appraisal results of impact assessment reports of environmental impact and issuance, revocation and adjustment of environmental permits. This contributes to simplifying procedures and increasing the attractiveness of investing in these special zones and parks.
Chairman of the municipal People's Committee Phan Van Mai said that Ho Chi Minh City is having a project to convert the functions of Export Processing Zones and Industrial Parks. He added that specific information will be provided to investors later. He also requested the Management Board of Ho Chi Minh City Export Processing Zones and Industrial Parks to determine the task of attracting investment and registering specific targets with the People's Committee in 2024.
According to the project on orientation for the development of export processing zones - industrial zones in Ho Chi Minh City from 2023 to 2030 and vision to 2045, Ho Chi Minh City has proposed a roadmap. As per its roadmap, the 2023-2024 period will be for developing policies and projects while from 2024 to 2030 will be for the implementation of the transformation of Export Processing Zones and Industrial Parks. In the period 2031-2045, the transformation of export processing zones and industrial zones will be carried out. In the period 2024-230, Ho Chi Minh City will carry out Pham Van Hai Industrial Park I and II as well as remove obstacles and deploy industrial parks including Le Minh Xuan 2, Le Minh Xuan expansion, Phong Phu, Vinh Loc expansion, Northwest Cu Chi expansion that the authorities issued establishment decision but they have not been implemented.
Last but not least, the city will continue implementing existing industrial parks such as Hiep Phuoc 3, Vinh Loc 3 in city industrial park development planning but not yet established.
