Improving Mechanisms and Policies for Development of IPs and EZs

As industrial parks (IPs) and economic zones (EZs) continue to drive investment and growth in Vietnam, the need to improve policies and mechanisms governing their development has become more urgent. Continued review and adjustment toward greater consistency, transparency, and alignment with international practices will help improve operational efficiency, strengthen competitiveness, and support more sustainable development in the next phase.

Manufacturing activities in an industrial park

Many bottlenecks remain

According to statistics from the Ministry of Finance, by 2025 Vietnam had established 478 industrial parks with a total planned land area of 146,000 ha, including 101,600 ha for industrial use, with an occupancy rate of about 53.2% and remaining industrial land of 47,500 ha.

The formation and development of IPs and EZs have supported economic restructuring and accelerated the country’s industrialization and modernization, helping Vietnam gradually join global production value chains. In particular, IPs and EZs have increasingly become central hubs for attracting FDI. Each year, FDI in IPs and EZs accounts for about 40% of total additional registered FDI and has shown a rising trend in recent years.

However, despite positive results, the development of IPs and EZs continues to face several barriers. Some legal provisions remain overlapping and inconsistent across different levels and sectors, extending the time needed to process investment procedures. In addition, although the legal framework has been gradually expanded, infrastructure investors still face difficulties accessing land, completing procedures for investment policy approval, carrying out site clearance, and implementing projects. The issue of worker housing and inconsistent incentive mechanisms also remains a major constraint.

Procedures for granting investment registration certificates still contain several shortcomings. For many foreign investment projects, even after receiving investment policy approval from the National Assembly, the Prime Minister, or provincial people’s committees, investors must still complete the process of obtaining an investment registration certificate. This requirement prolongs administrative processing and creates challenges for investors.

Certain shortcomings have also appeared in tax incentive policies. A lack of consistency between regulations on investment incentives and guidance from the tax sector has created difficulties for businesses and local tax authorities during implementation.

Speaking at the forum “Improving Policies to Attract the Next Generation of FDI into Industrial Parks,” organized by the Vietnam Chamber of Commerce and Industry (VCCI) in November 2025, Nguyen Duc Hien, Vice Chairman of the Central Policy and Strategy Commission, said the current institutional framework, policy mechanisms, and business environment still carry considerable risks. Administrative procedures remain complex and time-consuming, particularly for post-investment licensing related to land, construction, environmental issues, and fire prevention and control. Institutional capacity in some localities has yet to meet requirements, especially in analyzing and appraising high-tech projects. Incentive mechanisms to strengthen linkages between FDI enterprises and domestic businesses have also remained insufficient.

For IPs and EZs, in addition to general incentives, current incentives for investment in industrial parks have mainly focused on tax benefits and infrastructure incentives such as land leasing. Infrastructure and human resources continue to be bottlenecks.

Truong Khac Nguyen Minh, Deputy General Director of Prodezi Long An Corporation, the developer of Prodezi Industrial Park, also said one of the fundamental challenges is the lack of consistency in policy frameworks and understanding among management levels. In addition, legal regulations governing the exchange of by-products and the trade of recyclable waste still contain gaps and cumbersome procedures.

These limitations not only increase costs and risks for businesses but also directly affect the attractiveness of the investment environment, requiring timely and effective review and solutions.

Removing policy bottlenecks and expanding growth potential

By 2030, Vietnam aims to increase the total number of industrial parks to 600, with an additional 35,000 ha of planned land, bringing the total to 181,000 ha. Within the broader restructuring of development space, IPs and EZs still have significant potential for growth, forming new dynamic regions that create a stronger pull for investment flows. However, to achieve this target, experts say institutional bottlenecks must be addressed and policy mechanisms improved to attract and effectively use the next generation of FDI, turning industrial parks into advanced and sustainable production centers.

Resolution 50-NQ/TW issued by the Politburo in 2019 called for continued research and improvements to institutional frameworks and policies for EZs, IPs, high-tech zones, and similar models, with clearer identification of development priorities and policy mechanisms suited to the characteristics of each model. In 2022, the Government issued Decree 35/2022/ND-CP on the management of IPs and EZs to address bottlenecks in Decree 82/2018, respond to new requirements, introduce several new industrial park models, and align regulations with recently adopted laws on investment, enterprises, planning, construction, and environmental protection.

More recently, Resolution 57-NQ/TW set out the task of developing “digital technology industrial parks,” one of the requirements for implementing the country’s science and technology development goals.

In particular, Resolution 224/2025/QH15 issued on June 27, 2025 called for continued research, amendment, and improvement of regulations along with incentive policies to attract investment and develop new types of IPs and EZs. These include eco-industrial parks, specialized industrial parks, supporting industrial parks, high-tech industrial parks, specialized economic zones, free trade zones, and similar models. The Ministry of Finance has also drafted a decree detailing the implementation of the 2025 Investment Law. The draft proposes amendments to regulations on sectors eligible for investment incentives, locations eligible for investment incentives, and special investment incentives and support.

This will create favorable conditions for attracting FDI into industrial parks.

Alongside policy improvements, experts also believe that a transparent and effective investment screening mechanism is needed, supported by clear procedures and regulations. An important guiding element is the establishment of clear provisions on costs related to greenhouse gas emission reduction activities and the development of industrial symbiosis models. Such mechanisms can create strong financial incentives that encourage enterprises to adopt clean technologies, improve energy efficiency, and implement environmentally friendly solutions.

Vietnam is entering a major opportunity to transform into a regional production center linked with innovation and sustainable development. Improving policies to attract the next wave of FDI into industrial parks will play an important role in achieving this goal. A consistent and transparent legal framework aligned with international practices will be the key to opening new development space for IPs and EZs, which serve as the “locomotives” of Vietnam’s industrialization, modernization, and global economic integration.

By Quynh Anh, Vietnam Business Forum