HOW DOES DECREE NO. 378/2026/ND-CP AFFECT STRATEGIES FOR DEVELOPING FREE TRADE ZONES AND URBAN PROJECTS?

1. From the Legal Framework to the Challenge of Structuring Development Areas

The development of Free Trade Zones (FTZs), integrated logistics zones, and reclaimed-land urban projects requires coordination across multiple fields, including planning, investment, construction, land management, environmental protection, and infrastructure operations. For project developers, the challenge lies not only in identifying suitable land but also in formulating an integrated development plan that meets legal requirements and remains financially viable.

Decree No. 378/2026/ND-CP is a legal instrument that warrants consideration when evaluating special urban development models and designated functional zones. However, when determining establishment conditions, approval authority, or specific incentive policies, businesses should verify each requirement against the corresponding provisions of the Decree and relevant sector-specific legislation.

Rather than viewing a project solely in terms of land development, investors should consider three factors simultaneously: the spatial structure of functional areas, infrastructure connectivity, and post-investment governance and operational arrangements.

2. Key Parameters to Consider When Assessing Investment Opportunities

The following parameters are retained from the original draft. Before presenting them as mandatory legal requirements, their scope of application and the relevant provisions of the original legal text should be verified.

1,000 hectares: Minimum size of a Free Trade Zone

Under Clause 2, Article 8 of Decree No. 378/2026/ND-CP, a Free Trade Zone must have a minimum area of 1,000 hectares. Where the zone comprises geographically non-contiguous areas, those areas must ensure connectivity in terms of infrastructure, operations, and unified management. This requirement should be taken into account when assessing site selection, planning, and the proposed organization of functional areas.

02: Modes of transport connectivity

Under Point b, Clause 1, Article 8 of Decree No. 378/2026/ND-CP, a Free Trade Zone must be capable of connecting to at least two of the following five modes of transport: road, rail, inland waterway, maritime, and air transport. Where connecting infrastructure has not yet been completed, the relevant works must be included in a plan or investment schedule approved by the competent authority, with a completion timeline consistent with the zone's planned commencement of operations. This is an establishment criterion for Free Trade Zones under the Decree and should not be interpreted as a general requirement for all logistics zones or other types of functional areas.

Functional areas: Structuring in accordance with approved plans and establishment decisions

Under Clause 1, Article 2 of Decree No. 378/2026/ND-CP, functional areas within a Free Trade Zone may include integrated logistics zones, industrial zones, commercial and service zones, research and development (R&D) and innovation zones, concentrated digital technology zones, data centers, non-tariff zones, and other functional areas permitted by law. The Decree specifies that each functional area may be planned to perform one or more specialized functions. Accordingly, it should not be assumed that every Free Trade Zone must contain all the functional categories listed above. The specific configuration should be determined in accordance with the approved planning scheme and establishment decision issued by the competent authority.

VND 100 trillion: Investment threshold for coastal reclamation urban projects seeking to attract strategic investors

Under Clauses 1 and 2, Article 43 of Decree No. 378/2026/ND-CP, coastal reclamation urban projects eligible for the mechanisms and policies applicable to strategic investors under the Law on Urban Development and the Decree must have total investment capital of at least VND 100 trillion. This amount is determined for the entire project based on the investment dossier. It should not be interpreted as a universal capital requirement applicable to all coastal reclamation projects.

October 1, 2026: Date of promulgation and entry into force

According to the Government's official legal document portal and the Electronic Gazette, Decree No. 378/2026/ND-CP was promulgated and took effect on October 1, 2026.

Official reference: Decree No. 378/2026/ND-CP on the Government's legal document portal.

3. Three Groups of Regulations to Consider During Project Preparation

3.1. Coastal Reclamation Urban Development: Investment Capital, Infrastructure, and Operational Responsibilities

For coastal reclamation urban projects, investment opportunities should be assessed holistically, taking into account capital requirements, planning schemes, technical infrastructure solutions, and the capacity to manage environmental impacts.

According to the original draft, the following issues warrant consideration:

• Investment scale: Total investment of at least VND 100 trillion is specified for coastal reclamation urban projects seeking to attract strategic investors. The applicable scope must be verified against the relevant chapter and provisions.

• Legal compliance: Projects should be assessed against the applicable regulations on urban development, planning, land, investment, construction, and environmental protection.

• Primary technical infrastructure: The proposed infrastructure includes coastal protection works, revetments, breakwaters, disaster prevention facilities, road connections to the mainland, water supply and drainage systems, waste treatment facilities, electricity, lighting, and telecommunications.

• Management and operations: Investment plans should account for infrastructure maintenance, asset management, environmental protection, and climate change adaptation.

• Customs procedures: Any provisions on preferential treatment for imports and exports serving the project should be examined carefully in terms of eligibility, applicable entities, and the scope of such preferential treatment.

For project developers, these considerations indicate that preparation for coastal reclamation projects should not focus solely on the commercial exploitation of reclaimed land. The costs of coastal protection works, transport connections, environmental management, and long-term operations should also be incorporated into the total investment budget and cash flow projections.

3.2. Investment in the Construction and Commercial Operation of Infrastructure: Ensuring Integration from the Outset

For Free Trade Zones, integrated logistics zones, and non-tariff zones, technical infrastructure is one of the key factors determining whether the entire area can operate effectively.

The original draft identifies the following considerations:

• Role of the infrastructure investor: The entity responsible for investing in, constructing, commercially operating, managing, and maintaining all or part of the infrastructure system within the approved scope.

• Infrastructure integration: Development plans should address external and internal transport networks, water supply and drainage, warehousing, telecommunications, and fire prevention and firefighting systems.

• Investment authority and procedures: Investors should identify the competent authority responsible for approving the investment policy or deciding on related matters under the regulations applicable to each project type. This determination should take into account the project's scale, nature, location, and specific legal conditions, with reference to the Law on Investment, its implementing regulations, and relevant sector-specific legislation.

• Land and investment policies: Provisions concerning exemptions or reductions in land rental fees, sea surface rental fees, or incentives comparable to those available for infrastructure projects in economic zones should not be interpreted as automatic entitlements for every project. All applicable eligibility requirements must be established under current law.

• Goods entering non-tariff zones: Customs procedures for construction materials and goods transferred from the domestic market should be assessed according to the type of goods, their intended use, and the applicable customs management regime.

From an implementation perspective, project developers should prepare a phased infrastructure investment plan that clearly distinguishes shared infrastructure, specialized facilities, and the investment responsibilities of each party. This approach helps prevent situations in which functional areas are planned before the corresponding infrastructure capacity and delivery responsibilities have been established.

3.3. Planning, Land, and Data: The Foundation of Project Governance

Projects containing multiple functional areas typically involve different categories of documentation and multiple management entities. Consequently, coordinating planning, land, and investment data is important for effective project governance.

According to the original draft, the following issues warrant attention:

• Integrated data: Develop and connect data relating to land, planning, and investment projects with the national land database in accordance with applicable regulations.

• Coordination among state authorities: Clearly identify coordination mechanisms and responsibilities among competent authorities in areas such as planning, construction, land management, and investment.

• Document management: Establish systems for storing, updating, and cross-checking legal documentation throughout the investment preparation, construction, and operational phases.

For businesses, integrated data can help monitor approval progress, track the legal status of individual functional areas, and improve coordination among departments. However, data sharing must comply with applicable requirements governing access rights, confidentiality, and data management.

4. Implications for Developers' Investment Strategies

Based on the legal and infrastructure considerations outlined above, project developers may consider three strategic adjustments during investment preparation.

First, shift from land development to infrastructure ecosystem development.

For large-scale projects, value creation depends on more than the area of commercial or industrial land. Transport connectivity, logistics services, supporting facilities, and integrated operations are also important factors to incorporate into the development and product strategies.

Second, incorporate connectivity requirements into financial planning.

Transport infrastructure, warehousing, water supply and drainage, and digital infrastructure can place considerable pressure on upfront capital expenditure. Businesses should assess the investment schedules for external infrastructure, phased development options, financing capacity, and the alignment between infrastructure costs and market demand.

Third, establish long-term legal governance and operational models.

Data management, coordination with competent authorities, infrastructure maintenance, and environmental compliance should be considered from the project preparation stage rather than addressed only after construction has been completed. These recommendations are analytical considerations for investment planning. They do not constitute independent legal obligations unless expressly prescribed by the applicable legal instruments.

5. Three Questions Developers Should Assess Before Proceeding

5.1. Is the project scale aligned with implementation capacity?

The project's area, total investment capital, and functional configuration should be assessed alongside financial capacity, land clearance requirements, infrastructure investment schedules, and market demand. A large project does not automatically guarantee investment efficiency if its functional components are not appropriately structured.

5.2. Which legal mechanisms actually apply to the project?

Businesses should distinguish between the conditions for establishing a functional zone, the requirements for selecting investors, investment policy approval procedures, and incentive policies. These matters have different regulatory scopes and should not be treated as a single, uniform mechanism.

In particular, a project located within a special functional zone does not automatically mean that all activities within it are exempt from procedures or entitled to tax, land, and customs incentives.

5.3. Which cooperation model best suits the project's capital structure and operational requirements?

For projects requiring integrated infrastructure investment, businesses may consider joint ventures or cooperation with infrastructure developers, logistics companies, specialized operators, and infrastructure investment funds. The appropriate model should be selected based on actual capabilities, risk allocation, and the applicable legal requirements governing investment, bidding, or public-private partnerships (PPPs), where relevant.

6. A Long-Term Perspective: Integration Capability as a Competitive Advantage

The development of large-scale urban areas and specialized functional zones places greater demands on coordination among planning, construction, infrastructure investment, and operational management.

In this context, real estate developers need to expand their approach from land portfolio management to the development of integrated project ecosystems. Relationships among land developers, port and logistics operators, technology providers, and infrastructure investment funds may create implementation advantages when structured in accordance with project objectives and applicable legal requirements.

Nevertheless, investment performance continues to depend on multiple variables, including planning suitability, financing capacity, infrastructure completion schedules, actual leasing demand, and the legal mechanisms applicable to each project type. Accordingly, no single cooperation model or investment scale should be treated as a universal formula for every project.

Conclusion

Decree No. 378/2026/ND-CP is a legal instrument that developers should examine when assessing matters within the scope of the Law on Urban Development. For models such as Free Trade Zones, integrated logistics zones, and coastal reclamation urban projects discussed in this article, investment decisions should be evaluated simultaneously from the perspectives of planning, legal compliance, infrastructure, financing, and operations.

Strategically, businesses should proactively review the relevant legal basis, determine the applicable eligibility requirements, verify infrastructure integration, and develop appropriate cooperation arrangements before committing to implementation. This approach can help mitigate risks during project preparation and strengthen the capacity to achieve long-term investment objectives.