Chu Lai Open Economic Zone Actively Capturing New Opportunities

10:52:14 AM | 24/7/2019

After over 15 years of development, from a wild barren land, Chu Lai Open Economic Zone has spectacularly transformed into a dynamic industrial hub which houses many leading successful industrial facilities in Vietnam and plays a role helping to turn Quang Nam from one of the poorest provinces in Vietnam at the time of split (1997) to the current well-developed locality which is expected to continue growth in the near future.

Chu Lai Open Economic Zone is a coastal economic zone established under the Prime Minister’s Decision 108/2003/QD-TTg dated June 5, 2003, and its Master Construction Plan was approved in the province’s Decision 43/2004/QD-TTg dated March 23, 2004. Located in the Central Key Economic Zone, Chu Lai Open Economic Zone has a favorable location, convenient traffic connectivity to Da Nang City, Dien Nam - Dien Ngoc Urban Area and Dung Quat Petrochemical Industrial Park in Quang Ngai province, to form an economic development chain. Chu Lai Open Economic Zone is the gateway for the Central Highlands, Southern Laos, Northeast Thailand and the broader Mekong Subregion to reach the sea and global markets.

Currently, Chu Lai Open Economic Zone is attracting investment in six key project groups according to its master plan under Conclusion 25/KL-TU dated April 27, 2016 of the Provincial Party Committee of Quang Nam province on building the southeast region into a driving force of the province’s development which consists of South Hoi An urban and service project group; automotive and supporting project group; textile and garment project group in association with the urban development of Tam Ky City; industrial and service development project group associated with Chu Lai Airport; gas energy and post-gas industrial project group; and fishing port system and storm shelter project group. In addition, according to Notice 296-TB/TU dated 9 April 2018 on conclusions of the Standing Board of the Provincial Party Committee at the working meeting with Chu Lai Open Economic Zone Authority on March 14, 2018, hi-tech agriculture was added to the master plan.

Chu Lai is Vietnam's first coastal economic zone, permitted by the Government for application of open mechanisms and policies to create an open and fair investment and business environment for domestic and foreign investors. This favorable condition, along with advantages of infrastructure, transportation, human resources and attractive investment incentive policies, have made Chu Lai Open Economic Zone a destination for many large-scale investment projects. To date, it is home to 156 investment projects with total registered capital of more than VND76.8 trillion (more than US$3.6 billion), including 43 FDI projects with over US$666 million. 149 projects already came into operation, including 33 FDI projects, with total registered capital of more than VND42.5 trillion. Since 2015, Chu Lai Open Economic Zone has contributed about 65% of the province’s total budget revenue. It has created jobs for more than 25,000 employees, of which 90% are local laborers.

Investment projects in Chu Lai Open Economic Zone are entitled to the highest incentives in the regulatory framework. Specifically, investors will enjoy a 10% corporate income tax in 15 years from the year the project generates revenue; a corporate income tax exemption in four years from the year of taxable income and a 50% corporate income tax reduction in the next nine years. In addition, investors are exempted from import duties for items that create fixed assets, entitled 5-year import tax exemption for raw materials, supplies and components which cannot be domestically produced; entitled to free land rent in the course of project construction or reduced or exempted land rents in a given period, depending on the project size and nature.

In addition to general provisions, large-scale projects and important projects to local industrial development or to Chu Lai Open Economic Zone, Quang Nam province and the Chu Lai Open Economic Zone Authority will work with investors to ask the Government of Vietnam for the application of specific policies to ensure investment attraction and effective project implementation.

Playing a major role in the success of Chu Lai Open Economic Zone, Chu Lai Truong Hai Automobile Joint Stock Company (Thaco) was the first private enterprise to invest here and a pioneer in implementing the government-backed Vietnam automotive industry development strategy to 2010 and further to 2020. To date, the Chu Lai Truong Hai Automotive Complex has become a driving force for the development of Vietnam's automobile industry. Some of its product lines have joined global value chains. The complex employs about 9,000 workers and has paid more than VND70,000 billion to local budget. Since 2015, Thaco has contributed over 50% of the province's total budget revenue. In addition to Thaco, Chu Lai Open Economic Zone is also home to many large-scale projects such as Nam Hoi An Resort, Vinpearl Nam Hoi An Resort and Tourism Complex, Chu Lai Golden Sand, Panko Tam Thang Garment Factory and CCI Electronic Components Factory.

Mr. Huynh Khanh Toan, Director of Chu Lai Open Economic Zone Authority, said, on December 13, 2018, the Prime Minister issued Decision 1737/QD-TTg approving the adjusted master plan of Chu Lai Open Economic Zone to 2035, with a vision to 2050. The adjusted construction planning has changed the nature of the economic zone under the Prime Minister’s Decision 43/2004/QD-TTg dated March 23, 2004. Accordingly, Chu Lai Open Economic Zone will be a multi-industry economic zone, one of major development centers of the central key economic region; an urban development area, an automotive and aviation parts industry hub; a mechanics - electricity, petrochemical, and high-tech agriculture center and a tourist service center linked to Chu Lai Airport and Chu Lai - Ky Ha port system. Besides, this is one of transport, trading and international exchange hubs of Central Coast and the Central Highlands and a gateway to the East Sea for the Central Highlands, Southern Laos, Northeast Cambodia and Thailand. It also plays an important role in national security and defense.

The revised general construction planning of Chu Lai Open Economic Zone is expected to create a breakthrough for the development of Chu Lai Open Economic Zone in particular, and Quang Nam province and the whole country in general. “Grasping this opportunity, the Chu Lai Open Economic Zone Authority is currently planning functional zones to facilitate investment promotion and carry out subsequent processes on land, investment and construction to provide spaces for tenants. At the same time, it will boost investment promotion activities to invite domestic and foreign investors, create a driving force of accelerating local socioeconomic growth, and make Quang Nam a relatively developed province in the country,” Mr. Toan emphasized.

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