Decree 32/2024/ND-CP on management of industrial clusters

To improve policies and laws on the management and development of industrial clusters, ensuring sustainable, orderly, and efficient planning and development of industrial clusters, the Government has issued Decree 32/2024/ND-CP on the management of industrial clusters, replacing Decree 68/2017/ND-CP and Decree 66/2020/ND-CP. To gain a comprehensive understanding, Viet An Law Firm will present the key highlights details of this new Decree for Clients in this article below.

Basic information about Decree 32/2024/ND-CP on management of industrial clusters

• Document number: 32/2024/ND-CP.
• Type of document: Decree.
• Issuing authority: Government.
• Date of issuance: 15/03/2024.
• Effective date: 01/05/2024.
• Signed by: Tran Hong Ha.

Notable points in Decree 32/2024/ND-CP on management of industrial clusters

The new regulations on business lines and production establishments encouraged to invest in and relocate to industrial clusters

According to Clause 1, Article 3 of Decree 32/2024/ND-CP, the industries, trades, and business establishments encouraged to invest and relocate into industrial clusters include:

• Processing and manufacturing industries serving agriculture;
• Mechanical industries, supporting industries, textile and garment industries, leather and footwear industries;
• Information technology and telecommunications industries, electronics industries;
• Smart energy industries, digital technology industries, automation, advanced equipment, new materials, biotechnology;
• Local industries and handicrafts that need preservation and development;
• Warehousing services, packaging, goods transportation, machinery and industrial equipment repair and maintenance services, and services directly supporting local industrial and handicraft production with a total area not exceeding 10% of the industrial cluster area;
• Other industrial sectors with high technology, clean, low energy consumption, high added value, and sustainable development;
• Industrial and handicraft production establishments that cause pollution or have the potential to cause pollution in craft villages and residential areas are encouraged to relocate into industrial clusters.

Additionally, Decree 32/2024/ND-CP also supplements many new industries such as warehousing services, packaging, goods transportation, information technology and telecommunications industries, and electronics industries.

Basis for the development plans of industrial clusters

According to Clause 1, Article 4 of Decree 32/2024/ND-CP, the development plans for industrial clusters will be built based on five foundations:

• First Foundation: Vietnam’s industrial development strategy, the development of industrial sectors and fields.
• Second Foundation: Socio-economic development orientations, regional planning, and technical and specialized planning.
• Third Foundation: The demand for land area, geographical and transportation conditions, and resources to attract and relocate organizations and individuals to invest in production and business within industrial clusters.
• Fourth Foundation: The ability to mobilize investment capital from enterprises, the state, and other legitimate sources to invest in the construction of technical infrastructure works in industrial clusters.
• Fifth Foundation: Environmental protection requirements, efficient and economical use of land and other local resources and resources.

Conditions for the establishment of industrial clusters

According to Clause 1, Article 8 of Decree 32/2024/ND-CP, the conditions for establishing industrial clusters are as follows:

Comparison with Decree 68/2017/ND-CP, changes in conditions for establishing industrial clusters in Decree 32/2024/ND-CP:

• Added Condition: The project to establish an industrial cluster must have a land fund suitable with the district-level land use plan.
• Utilization Requirement: If the district has already established an industrial cluster, the average occupancy rate of industrial clusters must be over 50% or the total unleased industrial land of industrial clusters must not exceed 100 hectares (the previous regulation required the total unleased industrial land to be less than 50 hectares).
• Provincial Approval: Must be in the list of industrial clusters approved by the competent authority at the provincial level.

Procedures for establishing and expanding industrial clusters

According to Clause 1 Article 9 Decree 32/2024/ND-CP, the application for establishing or expanding an industrial cluster includes:

• Proposal Document: A proposal for establishing or expanding an industrial cluster from the district-level People’s Committee. If the industrial cluster spans two or more district-level administrative units, the provincial People’s Committee assigns one district-level People’s Committee to submit the proposal.
• Legal Entity Documents: A document from the enterprise, cooperative, or organization proposing to be the investor in constructing the technical infrastructure of the industrial cluster (including a commitment not to violate legal regulations and to bear all costs and risks if not approved) accompanied by the investment report for establishing or expanding the industrial cluster and a map identifying the location and boundaries of the industrial cluster.
• Legal Status Documents: A valid copy of the legal documents of the enterprise, cooperative, or organization proposing to be the investor in constructing the technical infrastructure of the industrial cluster.
• Financial Capacity Documents: A valid copy of documents proving the financial capacity of the enterprise, cooperative, or organization proposing to be the investor in constructing the technical infrastructure, including at least one of the following documents: (i) Financial statements for the past two years; (ii) Financial support commitment from the parent company; (iii) Financial support commitment from a financial institution; (iv) Financial capacity guarantee; (v) Other documents proving financial capacity (if any).
• Experience Documents: A valid copy of documents proving the experience of the enterprise, cooperative, or organization proposing to be the investor in constructing the technical infrastructure of the industrial cluster and other related documents (if any).

Procedure for establishing and expanding industrial clusters

Based on Article 10 of Decree 32/2024/ND-CP, the procedure for establishing and expanding industrial clusters is specified as follows:

Additionally, update the changes to report to the Prime Minister during the next provincial planning establishment and approval session.

The effectiveness of Decree 32/2024/ND-CP on management of industrial clusters

Decree 32/2024/ND-CP on management of industrial clusters takes effect from May 1, 2024.

Decree 68/2017/NĐ-CP, which was amended and supplemented by Decree 66/2020/NĐ-CP, ceases to be effective from the date Decree 32/2024/NĐ-CP comes into effect.

For consultation on legal provisions regarding the management and development of industrial clusters, corporate law, related amended decrees, please contact Viet An Law Firm for the best support.