Danang, Vietnam’s third-largest city, is emerging as a prime investment destination, known for its strategic coastal location, business-friendly environment, and thriving business sector. Its growing middle class and vibrant startup culture, with 70% of the population under 30, further enhance its appeal for businesses and investors alike.
Vietnam has rapidly transformed from one of the world’s poorest countries to a fast-growing economy with a rising middle-income population. Major economic hubs like Ho Chi Minh City, Hanoi, and Danang have been central to this transformation. Business in Danang, supported by the government’s policies and regulatory relaxations, continues to attract foreign direct investment, particularly in industrial parks that offer numerous incentives.
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Recent Economic Developments and Prospects of Danang
In 2024, Danang continues to solidify its position as one of Vietnam’s most dynamic cities, driven by strong economic growth, strategic development, and a thriving business environment. Business in Danang has benefited from the city’s strategic location and diversified economy, with gross domestic product (GDP) growing by an estimated 8.1% in the first half of the year. Key sectors such as tourism, manufacturing, and information technology have contributed significantly to this growth, with tourism alone seeing a 20% increase in international arrivals compared to 2023.
Manufacturing has also flourished, thanks to substantial foreign direct investment from Japan and South Korea, leading to the establishment of new facilities in electronics, textiles, and automobile. These developments have not only expanded production capacity but have also created employment opportunities, further strengthening business in Danang. Meanwhile, infrastructure projects, including the expansion of Danang International Airport and enhancements to the transportation network, have boosted the city’s connectivity and appeal as a key economic hub.
Looking ahead, Danang’s focus on innovation and digital infrastructure, particularly its efforts to become a “smart city,” positions it well for sustained growth. Investments in 5G networks and smart technology integration are expected to attract high-tech industries, while government policies supporting start-ups and SMEs will foster innovation and job creation. These strategic initiatives ensure that business in Danang remains on a promising path to continue contributing significantly to the national and regional economy.
Read Related: Setting Up a Manufacturing Company in Vietnam: Benefits, Industries, Procedure
Doing Business in Vietnam: Why Choose Danang’s Industrial Parks?
Danang is emerging as a prime investment destination in Vietnam, offering numerous advantages to foreign investors, particularly in its industrial parks. Here are the key reasons why Danang stands out:
Read More: Vietnam’s Industrial Zones: A Key Player in Global Manufacturing
Investment-Friendly Environment
Investment-Friendly Policies
Vietnam has implemented investment-friendly policies to encourage foreign investments, making it easier to start a business. The government has actively lowered barriers, resulting in a surge of foreign direct investment (FDI) into the country. These policies are particularly favorable in Danang’s industrial parks, where investors benefit from various incentives.
Young Population
Vietnam’s entrepreneurial and startup scene is thriving, largely due to its youthful population—70% of whom are under 30. This young, ambitious, and skilled demographic is a driving force behind the country’s rapid economic growth, making Danang an attractive location for businesses seeking dynamic human resources.
Growing Middle Class
Over the last three decades, Vietnam has transformed from one of the world’s poorest countries into a rapidly growing economy. This transformation has been fueled by a burgeoning middle class, which continues to expand, further enhancing the market’s attractiveness.
Read More: Vietnam’s Workforce: High Demand Skills and Advice for Business in 2024
Danang’s Strategic Advantages
East-West Economic Corridor (EWEC)
Danang serves as the eastern gateway to the East-West Economic Corridor (EWEC), a major initiative in the Greater Mekong Subregion developed by the Asia Development Bank. The completion of road systems connecting Danang to Laos, Thailand, and other Mekong countries has solidified its role as a critical hub, promoting regional cooperation and attracting investment.
New Strategic Economic Hub
Designated as one of five strategic economic hubs in central Vietnam, Danang, along with Quang Nam, Binh Dinh, Quang Ngai, and Thua Thien-Hue, is set to leverage its geographical advantages and enhance economic development in the highlands and central regions. This designation further strengthens Danang’s position as a key location for investment.
Read Related: Setting up a Manufacturing & Trading Business in Vietnam’s Free Zones: A Brief Guide for Foreigners
Improved Infrastructure
Danang is a major transportation hub equipped with international airports, commercial ports, railways, and roads. Its infrastructure is continuously improving, with direct international shipping routes to key global markets such as Singapore, Hong Kong, Japan, South Korea, Europe, US, and Taiwan. Danang International Airport, one of Vietnam’s largest, can accommodate 12 million visitors annually, reflecting its growing importance as a logistical center.
Abundant Trained Workforce
Danang boasts a well-educated and dynamic workforce, with nearly half a million potential workers. The city is home to over 24 colleges and universities, and more than 50 vocational training schools, enrolling over 140,000 students. Danang consistently ranks high in educational development indexes, ensuring a steady supply of skilled graduates to meet the needs of investors.
Technology and Telecommunication Center
Danang is recognized as one of Vietnam’s leading technology and telecommunication hubs, especially in software and the internet. The city’s technology firms have partnered with top companies from Japan and India to train local engineers, technicians, and programmers. This collaboration ensures that Danang’s workforce remains competitive on a global scale and meets the demands of the international market.
Read More: The Developing IT Industry in Vietnam: Update 2024
Why Invest in Danang’s Industrial Parks?
Danang’s industrial parks offer key advantages for foreign investors, including reduced transportation costs and improved logistics, due to the city’s strategic central location and strong connectivity across Vietnam. In 2019, the industrial sector saw significant growth, with output reaching VND 17.9 trillion (US$78 million), driven by industries like electricity production, manufacturing, and waste treatment. Retail sales also surged, increasing by 13.6% to nearly VND 100 trillion. The local government, in partnership with the private sector, plans to expand these industrial zones, investing over US$652 million in new parks while positioning Danang as a leader in digital transformation by 2030.
Overview of Industrial Zones (IZs) and Industrial Parks (IPs)
Vietnam’s industrial zones (IZs) and industrial parks (IPs) continue to play a crucial role in the country’s economic development, serving as key hubs for manufacturing and export-oriented industries. These zones offer various financial incentives and infrastructure benefits, making them attractive locations for both domestic and foreign investors.
As of August 2024, Vietnam hosts 421 industrial parks, covering a total area of approximately 130,000 hectares of natural land. This represents significant growth since 2021, reflecting the country’s ongoing industrial expansion and its commitment to developing infrastructure that supports industrial activities.
Out of the 421 industrial parks, 305 are operational, with an average occupancy rate of 74.2%. These parks have generated employment for over 4.1 million workers, highlighting their importance in job creation and economic growth. The increase in occupancy and employment underscores the continued demand for industrial space in Vietnam, driven by strong investment inflows, particularly in the manufacturing and electronics sectors.
In Danang, the city continues to expand its industrial infrastructure to support economic growth and attract new investments. The Danang People’s Committee has recently secured approval for the construction of three new industrial parks, which are expected to further enhance the city’s industrial capacity and competitiveness.
- Hoa Ninh Industrial Park: This park covers an area of more than 400 hectares and involves an estimated investment of nearly US$300 million. It is designed to accommodate a variety of industries, including electronics, textiles, and automotive manufacturing. The development of this park is expected to significantly boost the local economy by attracting high-value investments.
- Hoa Nhon Industrial Park: Located in the Hoa Vang district, the Hoa Nhon Industrial Park spans over 360 hectares. The project has secured an investment of approximately US$300 million. Once completed, this park is expected to host a range of manufacturing and processing industries, further diversifying the industrial base of Danang.
- Hoa Cam Industrial Zone – Phase 2: The second phase of the Hoa Cam Industrial Zone covers 120 hectares and involves a total investment of over US$100 million. This expansion will provide additional capacity for existing and new industries, ensuring that Danang remains a competitive destination for industrial activities in central Vietnam.
These developments are part of Danang’s broader strategy to enhance its industrial infrastructure and support sustainable economic growth. By expanding its industrial parks, the city aims to attract more foreign direct investment, create jobs, and boost its overall economic output.
Moving Toward Ecological Development in Danang
The Hoa Khanh Industrial Park in Danang’s Lien Chieu District is one of the three pioneering industrial parks participating in Vietnam’s ‘Eco-Industrial Park Initiative for Sustainable Industrial Zones.’
For the period 2021–2030, the municipal government launched the ‘Building Danang into an Environmentally-Friendly City’ project on April 2, 2021. This project aims to establish at least one eco-industrial park in Danang by 2025, and three by 2030.
To achieve these goals, the following initiatives will be undertaken:
- Compiling a list of full-time and part-time environmental protection officers;
- Organizing training courses on waste and energy audits, and updating industrial park regulations on environmental protection;
- Identifying symbiotic models for managing enterprises’ waste;
- Addressing challenges and obstacles to implementing at least one symbiosis model in the Hoa Khanh Industrial Park by 2023;
- Developing a handbook for green financial management;
- Hosting seminars to introduce preferential capital sources to enterprises and assist them in improving their production lines.
Commitments by Authorities to Industrial Growth
At the Danang 2022 Investment Forum, Danang City’s provincial secretary, Nguyen Van Quang, outlined several commitments to enhance the investment appeal of the city’s high-tech and industrial parks.
The city has plans to further develop its infrastructure, including the expansion of freight facilities and the construction of additional ports. Additionally, efforts are underway to create a more accommodating business environment by streamlining administrative procedures and offering customs incentives. A key focus will also be on building a highly skilled workforce.
As the center of Vietnam’s Central Key Economic Zone (CKEZ), Danang is determined to maintain its pivotal role in the national economy as a hub for investment and innovation.
How to Set Up a Company in Danang?
Foreign investors looking to start a business in Danang must first establish a company within the country. The most common form of incorporation is a foreign-owned company, which allows for 100% foreign ownership.
To successfully establish a company in Vietnam, you need to obtain two key certificates: the Enterprise Registration Certificate (ERC) and the Investment Registration Certificate (IRC).
Enterprise Registration Certificate (ERC)
The ERC is a document that provides essential information about the registered enterprise. It is available in both hard and soft copy formats.
Read More: Required Business Registration Certificates (ERC) in Vietnam for Company Formation
Investment Registration Certificate (IRC)
The IRC is a soft copy document that contains detailed information about the registered investment project. This certificate is mandatory for foreign investors who own 51% or more of the investment project’s charter capital.
Read More: Your Easy Guide to Obtaining an Investment Registration Certificate (IRC) in Vietnam
Process of Company Registration in Vietnam
- Document Submission: The business owner must submit a complete and valid set of company registration documents to InCorp Vietnam.
- Document Review: InCorp Vietnam will review and confirm the accuracy and completeness of the documents within 3 business days. Once verified, the documents will be submitted to the relevant authorities on the owner’s behalf.
- Notification: The founder will receive a written notification regarding the application status. If the application is denied, the reasons for refusal will be clearly stated.
- Additional Requirements: Depending on the business category, owners may need to fulfill other requirements as per Vietnam’s Enterprise Law and Investment Law.
How InCorp Vietnam Can Help with Your Business in Danang?
InCorp Vietnam offers comprehensive support for foreigners looking to establish and maintain businesses in Danang, Vietnam. With our ground assistance and streamlined solutions, we guide you through the entire process, from choosing the right legal entity to ensuring ongoing compliance with local regulations. Our services include company registration, business licensing, visa applications, intellectual property rights protection, recruitment solutions, and more.
Vietnam, particularly Danang, has created a favorable investment climate where multinational companies can thrive. As your one-stop business setup consultant, InCorp Vietnam simplifies every step, helping both domestic and foreign investors navigate the complexities of starting and operating a business in Danang. Let us assist you from inception to full operation—speak with one of our international business consultants today to get started.
We made the most detailed step-by-step guide for Company Incorporation in Vietnam for investors, now available as an interactive checklist:
About Us
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