DECREE 35 ON MANAGEMENT OF INDUSTRIAL PARKS AND ECONOMIC ZONES

LEGAL UPDATE

Decree 35/2022/ND-CP (Decree 35) on the management of industrial parks (IPs) and economic zones (EZs) will become effective on 15 July 2022 and replaces Decree 82/2018/ND-CP (Decree 82).

In this article, we will look at some key changes of Decree 35 compared to Decree 82.

1. Construction Planning

Decree 35 abolishes several regulations on the development planning of IPs and EZs and replaces them with regulations to comply with the 2017 Law on Planning and Resolution No. 110/NQ-CP dated 2 December 2019.

It is expected that these changes will help save time and costs for the local authorities in the process of making, appraising and adjusting the regional and/or provincial planning.

The implementation of the IPs and EZs planning has been incorporated into the provincial planning. On that basis, the provincial People's Committee can propose to the competent authorities to make investment policy decisions for the IPs project in accordance with the local development orientation.

Decree 35 waives the requirement for planning task (nhiệm vụ quy hoạch) in certain cases:

1. formulating the planning of subdivisions for construction of IPs in areas where the general construction planning or general construction planning of EZs has been approved; and

2. formulating the detailed planning on construction of IPs in areas where the construction subdivision planning has been approved.

This will help the investors save more time in implementing projects.

2.  Delegation of Decision-making Powers

Decree 35 gives more power to local authorities in the process of IP management. For example, the right to adjust locations and the acreage of planning areas for IP construction in some specific cases is delegated to the provincial People's Committees. More specific, when adjusting the location, the acreage of the planned area of the IP should not exceed

1. 2% and 6 hectares (ha) compared to the acreage of the IPs as determined in the list of IPs in the province or city; or

2. 10% and 30 ha compared to the area size of the IPs as determined in the list of IPs in the centrally affiliated city or province after obtaining written opinions from the concerned Ministries.

This is a positive change for local authorities and infrastructure companies because this procedure used to be complicated and time-consuming.

According to Decree 35, the provincial People's Committee can assign infrastructure investors to organise the formulation of subdivision planning for IPs construction in the area where the general planning for IPs construction already exists while simultaneously organising the formulation of detailed planning for IPs construction. Previously, the Government would adjust the content related to planning, policies, etc., which would cause difficulties for investors implementing the project. The reason for this is that in the implementation process there could be various unforeseen problems not taken into consideration when formulating the project, particularly in relation to compensation and site clearance.

3. Reducing Unnecessary Administrative Procedures

Decree 35 eliminates the procedure for establishing an IP for infrastructure construction investment projects. Instead, the IP is considered to have been established since the date of issuance of the policy decision or investment registration certificate (IRC). Previously, under Decree 82, after obtaining the IRC or policy decision, the Management Board of the IPs or Department of Planning and Investment must submit a written request to the provincial People's Committee for the issuance of an approval decision on the establishment of IPs.

4. Minimum 60% Occupancy Rate Not Required  

Compared to Decree 82, Decree 35 sets out when the occupancy rate of 60% does not need to be met when investing in the following IPs infrastructure projects:

1. the IP infrastructure investment project has been established before but is terminated;

2. the total land area of established IPs in the province or the centrally affiliated city is less than 1,000 ha;

3. the location of the IP in the district-level area is on the list of areas eligible for investment incentives in accordance with the Law on Investment or in the established EZ;

4. the IP infrastructure investment project is in the form of an eco-industrial park, supporting industrial parks, specialised industrial parks, or high-tech industrial parks; and

5. the expansion of an IP project which was established before and will be implemented by the same investor.

The abolition of this occupancy rate is meant to encourage the development of eco-industrial parks, support industrial parks, specialised industrial parks, and high-tech industrial parks, as well as to welcome infrastructure developers with a high investment capacity.

5. Housing Accommodation for Employees Working in IPs and EZs

When determining the list of IPs in the province or the centrally affiliated city, under Decree 35, the land fund must be guaranteed for planning the construction of houses, public services, or utility facilities for employees at least at the rate of 2% of the total IP area. Furthermore, one of the conditions for considering and approving the investment policy for IP infrastructure projects is to have a plan for building houses, public services, or utility facilities for employees. Another condition for being able to expand the IP project is that it has built and put into use a residential area, public service or utility facilities for employees. Decree 35 perfects the mechanism to invest in building residential areas for employees in the IPs, helping to increase the number of employees’ housing.

Prior to Decree 35, residents were not entitled to reside in IPs and export processing zones (EPZs). If necessary, foreigners (including managers, executives, and experts) were allowed to temporarily stay at enterprises in IPs or EPZs according to the regulations of the provincial People's Committee. Decree 35 now also allows employees to temporarily reside and stay in the IP. This new regulation seeks to improve the quality of the employees’ life, and promote the production and business activities of enterprises.

 6. Conclusion

Decree 35 brings many positive changes to the legal framework for IPs and EZs, addresses various shortcomings of Decree 82 and is expected to attract more investment in IP and EZ development.

For more information, please contact:

 Duc Tran / Associate

duc.tran@acsvlegal.com

 Phuong Nguyen / Associate

phuong.nguyen@acsvlegal.com

© 2022 ACS Legal Vietnam Company Limited – All rights reserved

This legal update is not an advice and should not be treated as such.

Download pdf: Decree 35 on Management of Industrial Parks and Economic Zones

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