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Free trade zones set as a logistics saviour

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While free trade zones are expected to be a new driving force for Vietnam’s logistics industry to grow, short term barriers remain challenging.

Free trade zones set as a logistics saviour
Free trade zones set as a logistics saviour

Last week, Danang People’s Committee submitted a document to the prime minister proposing a number of contents related to the construction of a free trade zone (FTZ).

The investment and policies plans are being gathered from relevant ministries and agencies. There are 20 new policies proposed for application, including two on support for administrative procedures and operations under the authority of the PM, and seven others under the authority of the government.

In addition, there are 11 policies under the authority of the National Assembly, including three preferential policies on tariffs, six supporting administrative procedures and operations, and two others supporting human resource development and market development.

Expected to be the first trial model in Vietnam, the zone has a proposed area of over 2,300 hectares. It will include production areas, logistics centres, trade-service areas, and other types of functional areas attached to Lien Chieu Seaport and Danang International Airport.

“There is a lot of work, and while there is no clear legal framework, by 2027 Danang must form at least one functional sub-zone in Danang FTZ. Thereby, there is a basis to summarise the plans and continue to propose stronger policies so that the zone can compete with others in the region,” said Tran Chi Cuong, Vice Chairman of Danang People’s Committee.

New driving force

Vietnam has numerous advantages for the development of FTZs, driven by stable economic growth, many free trade agreements, the rise of the middle class, domestic consumption demand, and upgraded transport and logistics infrastructure, connecting economic zones with FTZs and international airports, facilitating international trade.

“The important factor for logistics to develop is to optimise the flow of goods. And FTZs can be an important driving force for logistics, helping improve its competitiveness, attract investment, optimise the flow of goods, and enhance Vietnam’s position in the global supply chain,” logistics expert Thuyen Nguyen told VIR.

Enterprises in an FTZ can enjoy incentives on warehousing and storage costs, simple customs procedures, and quick clearance times, thus helping reduce costs. FTZs also allow integration of activities such as storage, distribution, and production at a single location, thereby improving supply chain management efficiency.

For instance, most of the regulations and policies proposed for the Danang FTZ include the duration of projects, incentives on corporate income tax (10 per cent for 15 years), exemptions and reductions in land rent, import and export tax, VAT, and special consumption tax such as duty-free zones in economic zones.

Besides Danang, Vietnam has other areas of potential for FTZs. The southern province of Ba Ria-Vung Tau is aiming to develop an FTZ associated with the Cai Mep-Thi Vai port cluster, aligning with socioeconomic development and ensuring national defence and security in the southeast region.

Ba Ria-Vung Tau is known as the hub of seaports, as it is home to an advanced deep-water seaport system, in which the Cai Mep-Thi Vai port cluster plays a key role. The province is also home to many modern industrial parks and export processing zones, including Phu My and My Xuan, which attract many domestic and foreign enterprises, especially focusing on oil and gas, chemicals, and logistics.

Nguyen Thanh Binh, general director of Gemadept, the investor of Gemalink Port, said that the combination of a gateway seaport and an international airport is a great opportunity for Ba Ria-Vung Tau to become an important economic centre in the region. To take advantage of the opportunity and fully develop its potential, the province needs a true FTZ.

“If the FTZ in Ba Ria-Vung Tau is implemented, it will attract goods to the ports in the area, contributing to diversifying logistics services, enhancing international transit and logistics capacity, and increasing competitiveness of Cai Mep-Thi Vai, while connecting with the Long Thanh airport,” he noted.

Short-term challenges

An FTZ is a popular model worldwide, but Vietnam currently does not have any. Up to now, Vietnam’s legal system has no regulations on the order, procedures, authority, management models, operating mechanisms, and more. Meanwhile, existing relevant legal regulations mainly focus on economic zones and export processing zones.

Expert Le Quang Trung said, “To develop FTZs in Vietnam, specific steps are needed. First of all, it is necessary to complete the legal framework, and develop specific legal regulations on the order, procedures, and authority to decide on investment, establishment, management, and operating mechanism of FTZs.”

He added that it is necessary to raise awareness of management agencies, businesses, and the community about the benefits and opportunities from FTZs.

“Vietnam also needs to learn experiences of countries that have successfully developed FTZs such as the United States, South Korea, UAE, China, Brazil, Singapore, and Panama, while implementing pilot projects in some potential localities to evaluate the effectiveness and learn lessons before expanding nationwide,” Trung said.

According to industry insiders, while waiting for the operation of FTZs, the logistics industry needs to deal with its existing challenges. According to the Vietnam Logistics Business Association, the main barriers include high logistics cost, a lack of breakthroughs in policies, weak connection between transport modes and warehouses, and poorly developed logistics infrastructure.

Many countries have made a success with the FTZ model. Among them, the most successful is Jebel Ali in the UAE. Established in 1985, it boasts 8,600 businesses from 140 countries. Its success is attributed to the world’s most competitive incentive policy system, with various taxes at rates of zero, no foreign exchange controls, and no restrictions on hiring foreign workers.

In South Korea, the central budget supports part of the capital for basic infrastructure investment depending on each project and period, the rest comes from the local budget or selected and agreed with enterprises investing in infrastructure works.

Elsewhere, one of the highlights of Singapore’s FTZ development policy is the preferential tax on goods and services. When goods are imported and stored in FTZs, businesses can enjoy the deferral. Businesses will not have to pay this tax if they re-export goods out of the FTZ, and only have to pay tax if the goods leave and enter the customs territory for consumption.

Expert Thuyen Nguyen noted, “It is time for Vietnam to develop FTZs without any delays because the logistics industry needs a new driving force for future growth amid the traditional rooms becoming limited. Success of countries in development of FTZs proves its effectiveness and importance. Vietnam should learn about them.”

Pham Minh Chinh, prime Minister

International trade continues to grow, as does international integration. However, the world is facing many universal and comprehensive problems that no single country can solve.

At home, development of marine space, the underground, outer space, digital transformation, infrastructure, and human resources also pose new requirements, while creating conditions to strongly boost the logistics industry.

The industry must follow new trends such as digital transformation, green transformation, the circular economy, sharing economy, and knowledge economy in the spirit that resources come from thinking and vision, motivation comes from innovation and creativity, and strength comes from individuals and businesses.

To contribute to the country’s double-digit GDP growth, it is necessary to reduce logistics costs from 18 to 15 per cent in 2025; increase the scale of logistics in GDP from 10 to 15 per cent, striving to reach 20 per cent; increase the scale of Vietnam’s logistics globally from 0.4 to 0.5 per cent, striving to reach 0.6 per cent; and boost the growth rate of the logistics industry from 14-15 to 20 per cent.

There are several solutions for the logistics industry. First is further raising awareness of the role and importance of the industry and about Vietnam’s position in the Asia-Pacific region to maximise potential and competitive advantages in the world logistics chain.

Vietnam must create institutional breakthroughs in an open direction, and build modern logistics infrastructure to reduce costs and increase product competitiveness, especially building up the aviation, maritime, and high-speed railway industries.

It must also build smart governance and train high-quality human resources, utilise diplomacy, ensure free trade, and strengthen the close connection between modes of transport and the world’s free trade zones.

The government will continue to promote its constructive role, focusing on strategies, institutions, and policies, creating an open environment and designing tools for resource mobilisation, monitoring, and inspection.

Tran Thanh Hai, deputy director Agency of Foreign Trade Ministry of Industry and Trade

There are clear trends emerging around the world. The first is fierce competition to compete in geopolitics. Vietnam is one of the countries considered to have that advantage. In this context, surrounding countries are making very strong moves. For example, Thailand is building a railway network connecting China and Laos. Meanwhile, Cambodia is building expressways and Funan Techo canal.

The second trend is the shift and reshaping of the supply chain, with businesses diversifying their supply chain and finding new potential markets.

Third is the trend of forming alliances among enterprises to take advantage on a large scale. This has been clearly seen in the maritime business when shipping lines form alliances, as well as mergers being made to increase their scale and footprint in the market.

There is now also the trend of applying technology to enhance automation, which increases productivity and efficiency, and utilising a green logistics supply chain and greener services.

We have set targets for the period towards 2035, including 8-12 per cent growth, the number of professionally trained manpower to increase to 70 per cent, and logistics costs to reduce to 12-15 per cent from the current 15-16 per cent, among others.

We propose some groups of solutions to enable the country to achieve such targets. These include completing the legal framework, developing infrastructure, increasing business competitiveness, developing the market, boosting tech application and green logistics, and developing personnel.

Some solutions for the upcoming time include building transhipment ports, developing national fleets, and establishing free trade zones (FTZs) and logistics centres. FTZs have strong advantages, but we have not had a legal framework for them. Besides Danang, many localities like Haiphong and Ba Ria-Vung Tau and others expect to build an FTZ, but as yet they cannot.

We expect that the country will amend rules about economic zones and industrial parks, and thus we can add regulations about FTZs.

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Hanoi to renovate Hoan Kiem Lake area for park development

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The renovation project will involve extensive surveys to assess key architectural landmarks, historical sites, and cultural icons that warrant preservation.

Hanoi to renovate Hoan Kiem Lake area for park development
The commercial centre building, commonly known as the ‘Shark Jaw’ (Ham Ca Map) building, at Dong Kinh Nghia Thuc Square by Hoan Kiem Lake. (Photo: VNA)

Hanoi – Vice Chairman of the Hanoi People’s Committee Duong Duc Tuan has requested a renovation plan for the eastern side of Hoan Kiem Lake, envisioning it as a special square and park zone.

The renovation project will involve extensive surveys to assess key architectural landmarks, historical sites, and cultural icons that warrant preservation. The aim is to propose new functions for the facilities to ensure they blend harmoniously with the area’s scenic landscape and historical significance.

On March 11, Tuan instructed the Department of Finance to swiftly establish a working group responsible for planning and revamping the Hoan Kiem Lake area, including the iconic Dong Kinh Nghia Thuc Square. It must draft a document on the investment policy for the special square and park zone and submit to the permanent members and the Standing Board of the municipal Party Committee by March 13, 2025.

To support the plan, the Department of Agriculture and Environment has been assigned to provide a detailed 1:500 scale topographic map of the area for the Hoan Kiem district People’s Committee and the Hanoi Urban Planning Institute. Additionally, the department will compile cadastral data to facilitate site clearance, compensation, and support mechanisms. Adjustments to land use plans should also be proposed to ensure seamless project implementation.

The project will also include a three-level underground space beneath the eastern side of Hoan Kiem Lake. This underground development will connect to the C9 station of the Nam Thang Long – Tran Hung Dao metro line. Measures will be taken to safeguard nearby heritage structures during the construction process, while functions for underground spaces will be proposed to optimise land use and meet public demand.

Tuan urged all departments to accelerate their proposals to execute the project. The development will unfold in two phases: the initial phase will involve the construction of the above-ground park and square using public investment, while the second phase will introduce underground facilities integrated with the C9 metro station following the Transit-Oriented Development (TOD) model.

To address the needs of displaced residents, the Department of Agriculture and Environment has been tasked with proposing maximum compensation policies. Eligible households will be offered resettlement land in the outlying district of Dong Anh. Meanwhile, resettlement housing will be sold to those not qualifying for land compensation.

In anticipation of resettlement demand, the city is fast-tracking a review of approximately 100ha of land in Dong Anh district to ensure sufficient space for resettlement efforts linked to this and other major development projects in Hanoi.

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Zebra Technologies announces new strategy for 2025 in Vietnam

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Zebra Technologies Corporation, a global leader in digitising and automating frontline workers, is looking to expand in Vietnam by anchoring on an extensive network of partners, continued investment, and a comprehensive portfolio of solutions.

The company announced its 2025 strategy for Vietnam with the three pillars at its Regional Partner Summit 2025 held in Danang on March 5, underscoring its commitment to empowering partners and customers in Southeast Asia.

Talking to VIR at the event, Christanto Suryadarma, sales vice president for Southeast Asia, South Korea, and Channel APJeC at Zebra Technologies, said, “We are seeing significant interest and opportunities for Vietnam to leapfrog in technology adoption. We are continuing to invest in enabling our customers in Vietnam to access the right solutions. That is our primary investment.”

Zebra Technologies announces 2025 new strategy in Vietnam
Christanto Suryadarma, sales vice president for Southeast Asia, South Korea, and Channel APJeC. Photo: PV

“We are continuously investing in training local Vietnamese partners on how to help customers digitise and automate. This is an ongoing investment. We conduct training sessions, provide demo units, and run proof-of-concept projects,” he added.

With a comprehensive portfolio of solutions, including everything from simple scanning devices to mobile computers, tablets, RFID, and machine vision, Zebra offers tailored solutions to meet the diverse needs of businesses in Vietnam to excel in a digital era.

Suryadarma noted, “Overall, our investments focus on strengthening our presence, expanding our capabilities, and enabling knowledge transfer. We equip our team and partners with the expertise they need so that when they engage with customers, they can offer well-prepared solutions.”

Zebra now has strong partners across Vietnam, as well as Vietnamese companies operating internationally. The company also has a repair and maintenance depot in Vietnam, where it has invested in training local workers.

Zebra opened its first service centre in Ho Chi Minh City in 2021. In 2022, Zebra expanded the centre to meet rising demand for printers, adding support for desktop, mobile, label, and industrial printers. Collaborating with distributors like SMC and Elite Technology, Zebra has developed a diverse partner ecosystem in Vietnam.

Zebra Technologies announces new strategy for 2025 in Vietnam
Christanto Suryadarma, sales vice president for Southeast Asia, South Korea, and Channel APJeC at Zebra Technologies. Photo: PV

“Vietnam is a crucial market for Zebra. Our strong team and extensive certified partner network are dedicated to delivering industry-specific solutions to our customers,” said Suryadarma. “Leveraging our global expertise and innovative solutions, we aim to support all companies operating in Vietnam, across sectors like manufacturing, retail, transportation, logistics, and healthcare, to overcome challenges and achieve digital transformation.”

The 2025 strategy shows Zebra’s long-term commitments in Vietnam. According to Zebra Technologies, its strategy is deeply linked to megatrends – external factors that shape the tech industry. These include mobility and cloud, AI, digitalisation and the Internet of Things, e-commerce, and automation.

To continue offering a comprehensive portfolio of advanced solutions, innovation is at the heart of Zebra Technologies where it invests heavily in business development and research and development. Last year, the company’s revenue was approximately $5 billion, of which it allocated about 10 per cent towards innovation.

“Innovation allows us to continuously develop new technologies and solutions that address real-world challenges. By leveraging mobility, cloud computing, scanning, RFID, and other technologies, we can provide real-time tracking and insights to meet the growing business demands of optimising workflows, improving efficiency, and enhancing decision-making,” the Zebra representative noted. “Our goal is to seamlessly connect all these elements – assets, people, and activities – through enterprise mobile computing. The more we can connect frontline workers, the better we can enhance business operations.”

Commitment to innovation has positioned Zebra Technologies as the leader in rugged mobile computing. While consumer mobile computing – laptops and smartphones – is widely used, Zebra dominates the enterprise mobile computing space, particularly in rugged devices designed for business-critical operations.

Another area where the company is very strong is data capture. Today is the era of AI. But for AI to work effectively, it needs data—clean, accurate data. As the company specialises in data capture, it is in a strong position to align with AI-driven market trends.

Along with data capture, the company is also the leader in barcode printing. Many businesses need barcode labels. These labels are used in countless industries. In Vietnam, for example, it’s becoming common in restaurants where instead of taking orders manually, customers simply scan a barcode on the table to access the menu.

Another area where Zebra holds the number one position is mobile RFID. RFID stands for radio frequency identification. This is a fast-growing business, and today, the world consumes approximately 30 billion RFID tags annually.

Key industry trends for 2025

Manufacturing, transport and logistics, and retail are the areas where Zebra is deeply involved.

Suryadarma said that manufacturing is a major industry in Vietnam. Zebra’s machine vision and AI solutions can significantly enhance manufacturing operations. He sees a lot of potential in helping businesses improve efficiency and productivity through automation and smart technology.

“We recognise the trends in this sector. Now, we are seeing many economic uncertainties, trade discussions, and shifting policies that are prompting manufacturers to focus on incremental, scalable improvements rather than sweeping transformations. Manufacturers want to automate their processes, but they are looking for cost-effective modernisation strategies. This requires new approaches and scalable automation tools for success,” he admitted.

Zebra Technologies announces new strategy for 2025 in Vietnam
Zebra Technologies’ 2025 Regional Partner Summit in Danang. Photo: PV

In transport and logistics, companies are now balancing onshore and offshore solutions while also ensuring sustainability. They would rather not generate excessive waste; instead, they want to reduce carbon footprints and implement greener supply chain practices. This shift requires greater visibility and real-time insights.

In logistics, the market sees a growing interest in AI, RFID, real-time tracking, and new visibility technologies. These are becoming increasingly important. For example, Vietnamese company Nhat Tin Logistics has implemented Zebra’s scanning solutions, improving speed, efficiency, and productivity in scanning and delivery operations.

Moving on to retail, customer expectations and labour shortages are two major challenges in this industry. This is where technology is making an impact.

“With Vietnam’s large population, retail is booming. We’re seeing a lot of automation in retail. For example, many cafés now use digital solutions – customers scan a QR code, place orders, and receive their items seamlessly. Many retailers have already adopted RFID to enhance customer experience. While we cannot disclose specific names due to customer confidentiality, we can confirm that RFID adoption is happening in Vietnam,” he added.

An example is in warehouses. When people walk into a warehouse, they do not just see shelves of products, they see workers constantly moving, picking, sorting, and delivering items. These workers are the backbone of warehouse operations. Similarly, in hospitals, nurses and doctors are on the front line, caring for patients and ensuring smooth medical operations.

Zebra Technologies announces new strategy for 2025 in Vietnam
Many regional partners joined the summit. Photo: PV

Healthcare is another key area of growth. Similar to other countries, people in Vietnam increasingly expect better healthcare services, both from government and private hospitals. Digitalisation plays a crucial role in improving healthcare efficiency.

“With nearly 8 per cent GDP growth last year, the challenge now is how to push Vietnam’s growth even further. Maybe one day, Vietnam can reach 10 per cent or even higher. It is not impossible, but it comes down to the people, the partnerships, and strong leadership across all organisations,” he noted.

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Close US cooperation to limit trade bumps

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Vietnam is to work with the United States on ways to reach a trade balance and circumvent the latter’s heavy tariff imposition.

Close US cooperation to limit trade bumps
Vietnam is improving local products and origin of goods information, photo Le Toan

Later this week, Minister of Industry and Trade Nguyen Hong Dien will fly to the US to work with its Department of Commerce on further materialising the comprehensive strategic partnership forged in 2023.

“The main reason for the trade imbalance between the two countries comes from the complementary nature of the two economies, which is due to the export and foreign trade structure of the two countries,” said Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan at last week’s governmental press conference in Hanoi.

“Vietnamese exports to the US compete with those from third nations, not directly with US enterprises in the US market. Meanwhile, they even also create conditions for American consumers to use Vietnamese goods at cheap prices,” Tan added.

According to the Ministry of Industry and Trade (MoIT), Vietnam is an open economy which pursues a free trade policy. The tariff difference on US goods is not high and may decrease in the future because Vietnam will reduce most favoured nation tariffs on many types of goods.

“Therefore, a number of US products with high competitive advantages such as automobiles, agricultural products, liquefied natural gas, and ethanol will benefit from this policy,” Tan said. “At the same time, it will create positive import flows from the US, contributing to improving the trade balance between the two.”

In addition, there is an ongoing policy dialogue on trade and investment between the two countries under the Vietnam-US Trade and Investment Framework Agreement founded in 2007. Therefore, existing problems in bilateral trade and economy, if any, will be proactively discussed through the US-Vietnam Council on Trade and Investment.

This is a mechanism that has created a common vision, contributed to the long-term direction, and stabilised the development of bilateral economic and trade relations, the MoIT said.

In addition, the Vietnamese government has taken the initiative in assigning ministries and sectors to review obstacles to the US “on the basis of fair trade, reciprocity, in accordance with the law, harmoniously and satisfactorily meeting the interests of all parties”, the ministry added.

“Vietnam will also create better conditions for US investors to participate in the process of forming and developing key industries in Vietnam, especially key energy projects involving new energy, hydrogen, and nuclear power,” Tan explained. “This will create a premise to increase imports of liquefied natural gas, fuel, machinery and equipment, and technology from the US, thereby contributing to improving the trade balance between the two countries.”

Via the US Embassy to Vietnam and the country’s counterpart in the US, the MoIT has sent a message that Vietnam wishes to maintain and develop a harmonious and sustainable economic and trade relationship of mutual benefits with the US. At the same time, Vietnam reaffirmed that it has and will never create any policy that hurts labourers or the national security of the US.

Since returning to office in January, US President Donald Trump has launched a sweeping series of tariffs, marking a return to the aggressive trade policies of his first term. The measures reflect the administration’s broader effort to protect domestic industries and address what the president views as unfair trade practices.

According to Asia Briefing, a subsidiary of Dezan Shira & Associates, as a major supplier of goods to the US, the tariffs could significantly impact Vietnamese exporters.

“It is also possible that Vietnam will become the target of country-specific tariffs, as the country has a large trade surplus with the US and has previously been accused by the US administration of engaging in unfair trade practices,” Asia Briefing said. “However, Vietnam may be able to mitigate the impact by striking a deal with the US, especially if it agrees to increase imports of American goods or ease market access for businesses from the US.”

However, Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi, told VIR that it was too early to gauge the impact of tariffs. In the past month, Vietnamese officials have repeatedly said they would seek compromises with the US on trade.

“This is likely to include promises of additional aeroplane purchases, boosting Vietnam’s imports from the US of liquefied natural gas, better market access for American agricultural products, and an adjustment of some regulations to make it easier for US companies to access the Vietnamese market,” Sitkoff said.

He suggested that Vietnam should take some necessary actions, including creation of more transparency in the origin of goods and increasing local content, and doing more to solve burdens and barriers faced by American companies and investors here.

Vietnam’s exports to the US reached $119.6 billion last year and $19 billion in the first two months of 2025.

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