1,000-Hectare Free Trade Zone to be Established in Hai Phong, Northern Vietnam

Vietnam’s northern port city of Hai Phong is on the cusp of a significant transformation with plans to establish a next-generation free trade area. This initiative is set to be at the heart of the newly-approved southern coastal economic zone, underscoring Vietnam’s ambition to enhance its economic framework.

The proposed free trade area spans more than 1,000 hectares within the larger scope of approximately 20,000 hectares designated for the southern coastal economic zone. The design is informed by successful global models, aiming to create a compelling investment climate that draws multinational corporations, showcasing Vietnam’s strategic commitment to attracting foreign investment.

Officially greenlit in early 2025, the southern coastal economic zone is expected to allocate substantial portions of land for various functions—3,000 hectares for a seaport, 4,000 hectares dedicated to industrial activities, and 1,800 hectares set aside for urban development. This structured approach highlights the balanced integration of industrial, commercial, and residential areas, fostering a vibrant economic ecosystem.

Funding for the development of this ambitious project is projected to be around $8 billion by the year 2030. However, the economic projections extend beyond mere construction costs. The zone is anticipated to attract an impressive $40 billion in investments, with expectations to exceed $70 billion in import-export value. Furthermore, the initiative aims to create around 400,000 jobs and establish living accommodations for approximately 500,000 residents by the year 2040.

Strategically positioned as the northern gateway to the sea, Hai Phong benefits from its geographical placement within the significant Hanoi-Hai Phong-Quang Ninh growth corridor, as well as the cross-border economic corridor linking Kunming (China) with several key Vietnamese locales. This unique positioning is set to facilitate enhanced regional connectivity and bolster national competitiveness, leveraging both the local strategic location and the existing transport infrastructure.

In alignment with these broader economic strategies, Hai Phong is also expediting the development of the Xuan Cau industrial and non-tariff zone. Situated within the Lach Huyen international sea port area and initiated back in May 2023, this project boasts a total investment of around 11.1 trillion VND (approximately $434 million). Covering 752 hectares, the zone is tailored for industrial production and logistics operations, further enhancing the city’s appeal as a hub for investment and economic activity.