On May 28, 2022, Decree 35/2022/ND-CP (“Decree 35”) stipulating the management of industrial parks and economic zones was signed and promulgated. Decree 35 includes 08 Chapters and 76 Articles. 

This is an important legal framework stipulating the construction direction and development plan for the system of industrial parks (“IP”) and economic zones (“EZ”); infrastructure investment, establishment, operation, development policies and state management. 

In particular, regarding infrastructure investment and IP construction, Decree 35 abolishes the procedure for establishing industrial zones (“IZ”) to reduce administrative formalities for businesses. 

Conditions for investment and business 

In addition, Decree 35 also completes the conditions for investment and business in IP infrastructure (occupancy rate, IP size, investor’s capacity, and other conditions) based on inheriting the provisions of Decree 82/2018/ND-CP of the Government regulating the management of IP and EZ, and Article 7, Clauses 2 and 3 of the Law on Investment (“LOI”) to ensure conformity with the characteristics of the IP infrastructure project. 

Conditions for infrastructure of IZ 

Regarding the conditions for investors to build and trade in the infrastructure of IZ, Decree 35 stipulates that the implementation of investment projects on construction and business of infrastructure of IP must meet the following the conditions: (1) for real estate business as prescribed by the law on real estate business; (2) the conditions for land allocation, land lease, change of land use purpose by the State for implementation of construction investment projects; and (3) business of IP infrastructure according to the provisions of law. 

Conversion of IP 

Regarding the conversion of industrial parks to urban-service development, Decree 35 also stipulates conditions for converting IP to developing urban-service zones. It must be consistent with the provincial planning, urban planning in the province, cities under the central Government; located in the inner city of a special-grade urban zone, a grade-I urban zone under the central Government, and a grade-I urban zone under the province. The operation period must be from the date of IP establishment until the time of consideration for conversion (at least 15 years or one-half of the operating term of the IP). 

In addition, there must be a consensus among investors who are implementing investment projects to build and trade IP infrastructure, and over two-thirds of enterprises in industrial parks in the area are expected to be converted, except for the following cases: (1) the investment project has expired its operation term as prescribed by the LOI; (2) the investment project is not eligible for land sub-lease extension by the law on land and civil law; and (3) investment projects causing serious environmental pollution are subject to forced relocation according to the law on environmental protection.