Da Nang’s Dragon Bridge a Sign of New Financial Strength

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HCMC – The city of Da Nang is fast becoming one of the premier destinations in Vietnam for both tourism and foreign direct investment (FDI). Seventeen years after the city became an independent municipality, Da Nang has become the third largest economic center and the main commercial and educational center of central Vietnam.

Da Nang, a port city located on Vietnam’s central coast, often has been ignored in favor of the more recognizable cities, such as Hanoi and Ho Chi Minh City (HCMC). However, this began to change last year when the city staged a sort of coming out party with the opening of the Dragon Bridge.

The new bridge, which crosses the Han River, has made headlines around the world for its spectacular design. The 666-meter-long dragon-shaped bridge that breathes fire and spouts plumes of water has become a favorite of both residents and visitors. The dragon is one of the most important symbols in Vietnamese culture as it symbolizes power, nobility and good fortune. Therefore, more than just an award-winning architectural design, the Dragon Bridge has become a symbol of the newfound strength of the city.

FDI

According to the Financial Times, Da Nang has the best investment environment in Vietnam at the moment, even better than Hanoi and Ho Chi Minh City. Peter Ryder, CEO of Indochina Capital – an investment firm with many projects in Da Nang – has proclaimed that Da Nang has better infrastructure than any other major municipality in Vietnam.

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The city’s economy has grown faster than Vietnam’s annual growth rate of seven percent. From 2006-2010, Da Nang grew at 11 percent a year. During 2011 through 2013, the city’s annual growth rate never dropped below 10 percent despite world economic stagnation.

In order to attract FDI, Da Nang has issued numerous concessions to foreign firms, these include:

  • For projects that invest more than US$20 million, the city will cover the costs arising from infrastructure development – investors must initially deposit 50 percent of this cost but will be refunded once their projects officially begin.
  • A Land Use Fee discount. Investment projects worth more than US$10 million are exempt from the Land Use Fee for the first two years of their operation.
  • A five-year tax exemption for foreign investors after the expiration of the initial four-year tax exemption and nine-year 50 percent tax reduction.

Tourism

Located within 100 km of three UNESCO World Heritage Sites, including the Imperial City of Hue, the Old Town of Hoi An and the My Son ruins, Da Nang has long been considered a pleasant pass-through point for travelers traversing Vietnam’s tourist trail.

These days, however, Da Nang is the location that people want to spend their whole vacation at. Many Vietnamese now refer to Da Nang as the most livable city in Vietnam. They adore Da Nang’s clean environment, beautiful beaches and good public services.

Growth in the number of tourists to the region continues to be substantial. During the first six months of 2014, there were 1.78 million visitors to Da Nang, a 15.8 percent increase year on year.

As Da Nang continues its change from a backwater harbor to a major metropolis, its newfound economic prowess can no longer be ignored. Time can only tell for sure how high this new economic dragon will fly, but the future looks bright for foreign investors in Da Nang.

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email vietnam@dezshira.com or visit www.dezshira.com.

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