Green industrial complexes at top of foreign-led wishlist

Tran Thi Thanh Hao - Head of Legal BW Industrial Development JSC

The promulgation of Decree 35 would help reduce administrative procedures for businesses significantly. However, there are certain concerns for BW when it comes to investing in ready-built properties and other financiers having their business operations in IZs.

Article 13 provides a mechanism for converting IZs to developing urban-service parks. To effectuate such conversion, among other conditions, the decree mentions there must be a consensus among IZ developers and more than two-thirds of tenants who sub-lease land in the area that is planned to be converted. This provision may raise a concern for tenants who vote against the conversion as they would usually be ones who may have not been prepared to move their business facilities to another place or may not be financially ready to lease new premises.

Thus, there ought to be clear guidance following the issuance of the decree, to protect those who are affected by the conversion. Developers and relevant authorities must prepare a new place for tenants who are affected by the conversion to move their business facilities to and compensate such tenants for costs incurred in relation to the movement and their business disruption.

Other issues relate to Article 9.4 and Article 27.2, which provide requirements for land bank and incentives for small- and medium-sized enterprises and other groups entitled to incentives under the Law on Investment; and Article 27.5 which expressly recognises developing and leasing ready-built facilities as an accepted industry in IZs.

Trang Bui - General manager Cushman & Wakefield Vietnam

Decree 35 is considered a policy breakthrough, which promptly removes bottlenecks and overlaps in-laws, administrative procedures, and the management of IZs and economic zones. It specifies types of master plans of IZs, and also allows cases in which planning tasks are not required, which will save on implementation time.

A special feature of the decree is that the provincial authority has been assigned the right to adjust the location and planning area for construction of IZs for specific cases, after obtaining written opinions from the Ministry of Construction, the Ministry of Natural Resources and Environment, and the Ministry of Planning and Investment.

One important point is that the new decree clearly classifies types of parks into supporting, specialised, high-tech, urban-service, and eco-IP. Therefore, the new decree has met the expectations of investors and helped to attract more funding into industrial real estate.

Chong Chee Keong - Industrial general manager Frasers Property Vietnam

In recent years, industrial cluster development has become the main trend. However, many problems in the development of the industrial chain have been exposed in recent years. As a response, professional IPs and clusters that cover the upstream and downstream of the entire industrial chain as much as possible have become a better choice.

The controllability and safety of the entire industry chain, as well as the centralised response to emergencies, all provide new evidence for accelerating industrial agglomeration.

With the continuous improvement of communication technology and intelligent manufacturing, in recent years, intelligent manufacturing has received varying degrees of attention and advancement in various regions. During the pandemic, the traditional manufacturing model has withstood a great test, and it has also found great help for the advancement of intelligent manufacturing.

In the past, the construction of IZs, including water, electricity, and roads became one of the basic conditions. In the long run, smart manufacturing will become a new infrastructure.

IZs are the mainstay, providing a more information-based, technological, and intelligent basic environment for manufacturing companies, which will become the key to the differentiated development of IZs in the next step.

Dr. Nguyen Cao Lanh - Dean of Architecture and Planning, Hanoi University of Civil Engineering

Compared with Decree 82, Decree 35 has far more realistic regulations, reducing some of the administrative procedures for businesses.

However, there are still no mandatory requirements for the construction of houses or public works and services for employees for the new construction of various IZs.

The land fund for construction of housing for workers has not yet been put into the new IZ models in line with trends found around the globe.

Moreover, regulations on eco-IPs have not kept pace with development, while regulations on urban-service areas have not been made clearer or more specifically than Decree 82.

Apart from that, many concepts have been repeated both in Decree 35 and 82 with no extra revisions.

Regulations on high-tech parks have at least 30 per cent of the land area used to attract high-tech and IT projects on the list of industries and trades with special incentives.

Tran Huynh - COO, KCN Vietnam

Decree 35 now stipulates the investment phase of IZs and simplifies regulations on conditions for infrastructure.

Accordingly, simplifying legal procedures and decentralising more powers to localities can help reduce licensing procedures in such IZs.

In addition, Decree 35 has added several regulations in order to promote the development of various types of IZs. These are additions that directly benefit investors. These types aim at green and environmentally-friendly operating models, improving the working conditions of employees, enhancing cohesion and boosting community benefits as well as social responsibility.

This also contributes to solving a problem that has emerged in recent years – rapid development leading to overload on social infrastructure, affecting the living environment.