Da Nang is the only Vietnamese city hosting both a free trade zone and a location of the International Financial Centre at once. The two regimes are often confused as interchangeable “special zones”, but they serve two entirely different flows: the FTZ serves the flow of goods, the IFC serves the flow of capital. Choosing the wrong location means registering the wrong regime for the right activity.
Governing Instruments
The foundational difference: a non-tariff zone and a financial centre are two different regime types
The Da Nang Free Trade Zone (Decision 1142/QD-TTg, about 1,881 hectares) is a defined geographic area operating as a non-tariff zone: goods entering from abroad have duties suspended, goods exchange between the zone and the domestic market is managed as exports and imports, and the zone value lies in logistics — warehousing, ports, land, manufacturing and goods trade. Zone members are investors with physical projects inside: factories, logistics warehouses, distribution centres, trading points — every incentive attaches to goods activities and a physical presence in Da Nang.
The International Financial Centre in Da Nang, by contrast, is not a non-tariff zone and does not process goods flows: under Resolution 222/2025/QH15, it is where financial institutions, investment funds and financial service enterprises concentrate, operating under unified Operating Regulations at the two locations of Ho Chi Minh City and Da Nang, with special mechanisms on foreign exchange, tax and dispute resolution. Goods do not pass through the IFC; capital, financial products and financial services are the “goods” of this centre. One city hosting both regimes is deliberate design: Da Nang is positioned simultaneously as the central-region logistics gateway and a financial pole.
System comparison: membership, incentives and governing bodies
On membership: the FTZ accepts any investor with a project fitting the sub-zone planning (manufacturing, logistics, trade and services zones) and sets no global financial threshold; the IFC limits membership to the global-scale financial institutions, funds and enterprises of Article 8 of Resolution 222/2025, with strategic investors as a separate tier. On incentives: the FTZ grants goods-and-investment incentives — duty suspension at zone entry, corporate income tax incentives by investment area and sector, in-zone land leasing; the IFC grants finance-activity incentives — a special FX regime for in-centre transactions, tax incentives for financial activities and personal income tax exemption for high-level personnel through the end of 2030.
On governance: the FTZ is run by the zone Management Board under the traditional investment one-stop model, attached to the Da Nang city government; the IFC is operated by the centre own three bodies — the Executive Body, the Supervisory Body and the Dispute Resolution Body — which belong to the centre and are independent of the local government where the centre sits, under Article 9 of Resolution 222/2025. This governance difference decides both the procedural experience and the dispute channel: FTZ disputes go through the ordinary court and arbitration systems; disputes arising from IFC member activities have the centre dispute resolution body and international arbitration centre channel.
Application Analysis
Location criteria must therefore start from the nature of the activity, not the incentive level: trade and logistics enterprises — import distribution, warehousing, cross-border e-commerce, manufacturing — belong to the FTZ because they need land, warehouses, ports and the goods duty-suspension regime; financial enterprises — banks, funds, insurance, fintech, regional treasury, asset management — belong to the IFC because they need the special FX regime, financial personnel and the financial services ecosystem. Comparing “which place has higher tax incentives” is the wrong question, because the two incentive systems apply to two different income types and cannot substitute for each other.
The notable case is the hybrid enterprise: a group with both a goods-trade arm in the central region and a wish to place trade finance or regional treasury functions. The correct model is two separate presences — a trade and logistics project in the FTZ and a financial membership at the IFC — with transactions between the two entities priced under related-party principles. Merging both activities into one entity at one location forfeits half the regime and creates compliance risk on both sides. The personnel factor also separates clearly: the FTZ needs logistics and manufacturing labour from the Da Nang — Quang Nam region; the IFC needs senior financial personnel, and the centre personal income tax incentive is the tool to attract exactly that group.
Recommended Actions
- Determine the main activity nature (goods flow or capital flow) before any incentive comparison; for hybrid activities, split into two independent legal presences.
- Check the membership conditions of each regime: sub-zone planning and a physical project for the FTZ; the global-scale organisation criteria for the IFC.
- Build the incentive comparison by your own income type (goods taxes and suspension, corporate income tax, personnel personal income tax) instead of comparing nominal tax rates.
- Design transactions between the FTZ entity and the IFC entity (if both exist) under related-party discipline from the initial structure.
Frequently Asked Questions
On what criteria should an enterprise choose between the FTZ and the IFC in Da Nang for its activities?
The Da Nang FTZ is a geographic area operating as a non-tariff zone under Decision 1142/QD-TTg — serving the flow of GOODS: warehousing, logistics, manufacturing and trade, with goods entering the zone duty-suspended and goods exchange with the domestic market managed as exports and imports. The IFC in Da Nang is a location of the International Financial Centre under Resolution 222/2025 — serving the flow of CAPITAL: financial institutions, funds and financial services operating under unified regulations, special FX and tax regimes, processing no goods flows. The first selection criterion is therefore the nature of the enterprise activity: goods-based activities with a physical presence choose the FTZ; capital and financial-product activities choose the IFC.
How do manufacturing and logistics activities fit the FTZ while financial services fit the IFC?
Manufacturing and logistics need three things only the FTZ has: land and warehouses inside a non-tariff zone, suspension of import duty and value added tax for goods entering the zone for production and re-export, and logistics infrastructure tied to central-region seaports — trading companies, warehousing operators, cross-border e-commerce and factories all belong to the FTZ. Financial services need three things only the IFC has: the special FX regime for in-centre transactions, a concentrated ecosystem of financial institutions, funds and support services, and high-level financial personnel incentives including personal income tax exemption through the end of 2030 — banks, funds, fintech, regional treasury and asset management all belong to the IFC.
Can an enterprise be present in both the FTZ and the IFC in Da Nang at the same time?
Yes, under a two-presence model kept separate: the manufacturing, trade and logistics project sits in the FTZ with its own legal entity or project unit, and the financial functions (trade finance, treasury, financial services) register as an IFC member through a separate financial entity meeting the membership criteria of Resolution 222/2025. Transactions between the two entities — service fees, internal funding — must be priced and documented under related-party principles. Merging both activities into one entity at one location forfeits the other side regime and creates two-way compliance risk.
How do tax, land and customs incentives differ between the FTZ and the IFC?
FTZ incentives attach to goods and physical investment: suspension of import duty and value added tax when goods enter the zone (tax arising when goods leave into the domestic market); corporate income tax incentives under the zone investment framework; and the right to lease land or sublease infrastructure in the zone for the project term. IFC incentives attach to financial activities: the special FX regime for in-centre transactions, tax incentives for financial activities under Resolution 222/2025, personal income tax exemption for high-level personnel at the centre through the end of 2030 — and the IFC has no land or goods customs regime at all. The two systems apply to two different activity types and cannot be compared directly by a single tax rate.
This article has been quality-reviewed by the FLAW AI Legal Council
