Vietnam’s Da Nang to Develop Free Trade Zone, Connect with Strategic Lien Chieu Port

Vietnam’s Da Nang will develop a free trade zone (FTZ) to attract more foreign investment into the coastal city. The FTA will function as a hub for export processing, logistics, commercial centers, and production zones. Further, the FTZ is expected to encompass the Lien Chieu Port, currently under construction and scheduled for completion in November 2025.

To encourage investment, the Da Nang FTZ will implement several trial policies and mechanisms during its first five years of operation. Foreign investors in the zone will benefit from a range of incentives, including exemptions from corporate income tax, land rent, and import duty tariffs.

While the exact location and size of the FTZ are still under consideration, the Da Nang City People’s Committee plans to finalize its proposal and submit it to the central government by early 2025.

Connection to the Lien Chieu Port

A key feature of the Da Nang FTZ is its connection to the Lien Chieu Port, a deep-water port that Vietnam envisions as a major maritime gateway. The port is designed to handle 40-50 million tons of cargo by 2050 and help alleviate congestion at the overloaded Tien Sa port. Once operational, the port will accommodate 200,000 deadweight tonnage (DWT) cargo ships and container vessels with capacities ranging from 8,000 to 18,000 twenty-foot equivalent units (TEUs), as well as 30,000 DWT liquid cargo ships by the same year.

The development of the port will proceed in two phases. The first phase, funded by the local government at an estimated cost of $140 million, involves constructing access roads, breakwaters, and shipping channels. The second phase, requiring around $2 billion in foreign investment, focuses on developing the wharf area, including eight container berths, six cargo berths, and supporting facilities. The Adani Group has expressed interest in investing in this phase.

As such, the Lien Chieu Port will be a key logistics center for Vietnam’s north-south railway as well as for the proposed Second East-West Economic Corridor.

The East-West Economic Corridor (EWEC) is a key initiative to boost economic growth and integration in Southeast Asia. Stretching around 1,700 kilometers, this corridor connects the Andaman Sea in Myanmar to the South China Sea in Vietnam, passing through Thailand and Laos.

Da Nang City People’s Committee has proposed a Second East-West Economic Corridor, which would provide a more direct route between Da Nang and Bangkok compared to the existing EWEC. Details about the project and its timeline are still under development.

Vietnam’s broader port infrastructure goals

Vietnam needs approximately US$13.3 billion to develop its seaport system by 2030. The country’s cargo output is expected to reach 1.2-1.4 billion tons by the same year with container cargo set to reach from 46.3 to 54.34 million TEUs.

The development of Da Nang’s Free Trade Zone and the Lien Chieu Port marks a significant step in Vietnam’s ambition to strengthen its position as a key player in regional trade. By attracting foreign investment through strategic incentives and enhancing infrastructure to support larger cargo capacities, Da Nang is poised to become a vital hub in Southeast Asia’s economic landscape.

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