Note: This article looks broadly at the business environment in Danang. For specific details on setting up a company in Vietnam see: How to Start a Business in Vietnam.
Da Nang, often referred to as the “city of bridges,” has emerged as a dynamic economic and tourism hub in Vietnam. Its strategic location on the central coast offers a balance of natural beauty and urban development, making it an attractive destination for businesses and investors. With a focus on sustainable development and a strong commitment to improving the business environment, Da Nang has positioned itself as a competitive city for domestic and foreign enterprises.
The city has experienced rapid growth in recent years, driven by investments in infrastructure, tourism, and manufacturing. Da Nang’s government has implemented various policies to foster economic development, including tax incentives, streamlined administrative procedures, and support for small and medium-sized enterprises. The city’s young and dynamic population, coupled with a growing middle class, presents significant opportunities for businesses in various sectors.
As Vietnam continues its economic integration with the global market, Da Nang has become a focal point for foreign investment. The city’s strategic location, modern infrastructure, and skilled workforce make it an ideal base for businesses seeking to expand their operations in Southeast Asia.
Key economic sectors in Danang
Da Nang’s economy is characterised by a balanced mix of industries, contributing to its diverse and sustainable development.
Tourism
Da Nang has leveraged its stunning natural beauty, including pristine beaches and historical landmarks, to become a major tourism destination in Vietnam. The sector contributes significantly to the city’s economy, generating revenue from accommodation, transportation, and related services.
Manufacturing and Processing
While primarily known for tourism, Da Nang also possesses a thriving manufacturing and processing sector. The city has attracted investments in various industries, including information technology, electronics, textiles, and footwear. Its focus on high-tech industries is a strategic move to enhance economic competitiveness.
Services
The service sector plays a crucial role in supporting Da Nang’s economic growth. This includes retail, wholesale, transportation, logistics, and real estate. The city’s expanding middle class has fueled the growth of these sectors.
Information Technology
Da Nang is positioning itself as a technology hub, with a focus on software development, IT services, and digital innovation. The city aims to attract tech talent and create a conducive environment for startups and technology companies.
These key economic sectors have contributed to Da Nang’s transformation into a dynamic and attractive city for businesses and investors.
Public Administration Performance Index
The Public Administration Performance Index (PAPI) measures the efficiency and quality of public administration services provided by a government. In the context of Danang, the PAPI provides insights into the city’s governance effectiveness.
PAPI, Danang, 2019 to 2023
| 2023 | 2022 | 2021 | 2020 | 2019 | |
| Participation | 4.93 | 4.49 | 4.06 | 4.50 | 4.77 |
| Transparency of Local Decision-making | 4.96 | 4.91 | 5.06 | 5.04 | 5.48 |
| Vertical Accountability | 4.34 | 4.20 | 4.27 | 4.60 | 4.78 |
| Control of Corruption in the Public Sector | 6.63 | 6.60 | 6.78 | 6.69 | 6.62 |
| Public Administrative Procedures | 7.24 | 7.31 | 7.33 | 7.34 | 7.50 |
| Public Service Delivery | 7.81 | 8.20 | 8.25 | 7.60 | 7.88 |
| Environmental Governance | 3.15 | 3.17 | 3.23 | 3.14 | 2.95 |
| E-Governance | 3.61 | 3.69 | 3.56 | 3.60 | 5.00 |
| Unweighted PAPI Score | 42.67 | 42.57 | 42.56 | 42.51 | 44.99 |
Source: The Viet Nam Provincial Governance and Public Administration Performance Index
Provincial Competitiveness Index
The Provincial Competitiveness Index (PCI) is a key tool for evaluating the business environment in Vietnam’s provinces. Danang, as Vietnam’s economic hub, is always a focal point in PCI reports.
PCI, Danang, 2019 to 2023
| 2023 | 2022 | 2021 | 2020 | 2019 | |
| Entry Costs | 7.14 | 6.73 | 6.94 | 8.75 | 7.89 |
| Access to land | 6.16 | 6.61 | 7.51 | 7.35 | 7.44 |
| Transparency | 6.71 | 6.72 | 6.3 | 6.23 | 6.59 |
| Time Costs | 8.03 | 7.48 | 7.46 | 8.62 | 7.08 |
| Informal Charges | 7.45 | 7.21 | 7.29 | 7.11 | 6.75 |
| Policy Bias | 5.13 | 6.42 | 5.92 | 6.18 | 5.32 |
| Proactivity | 6.92 | 6.96 | 7.01 | 6.37 | 6.76 |
| Business Support Policy | 6.91 | 6.26 | 7.57 | 6.32 | 6.76 |
| Labor Policy | 7.3 | 6.8 | 7.15 | 7.87 | 7.99 |
| Law & Order | 7.34 | 7.58 | 7.33 | 7.05 | 6.99 |
| PCI Scores | 68.79 | 68.52 | 70.42 | 70.12 | 70.15 |
| Ranking | 16 | 9 | 4 | 5 | 5 |
Source: Provincial Competitiveness Index 2023
Foreign direct investment in Danang
Da Nang has emerged as a promising destination for foreign direct investment in Vietnam. The city’s strategic location, coupled with a favourable investment climate, has attracted a growing number of foreign investors. Da Nang’s appeal lies in its strategic coastal location, which facilitates trade and logistics, as well as its growing reputation as a liveable and attractive city.
The city’s focus on sustainable development and its efforts to improve the business environment have also contributed to its attractiveness as an investment destination.
Of note, in the first seven months of 2024, Danang added 43 new projects to its tally with new registered capital of US$29.7 million, according to data from the Ministry of Planning and Investment. This was about a seven percent increase over the same period in 2022.
Entertainment and Nightlife in Danang
Da Nang offers a vibrant and diverse entertainment and nightlife scene, catering to a wide range of tastes. The city’s combination of coastal charm, modern amenities, and cultural heritage creates a unique atmosphere.
Entertainment
- Beaches and water sports: Da Nang’s stunning beaches are a major draw, offering various water sports activities such as surfing, kiteboarding, and paddleboarding.
- Cultural attractions: The city boasts a rich cultural heritage, with historical sites, museums, and traditional performances providing opportunities to explore Vietnamese culture.
- Theme parks: Da Nang has invested in developing theme parks and entertainment complexes, offering fun and exciting experiences for families and individuals.
Nightlife
- Beach clubs and bars: The coastal location of Da Nang has led to the development of numerous beach clubs and bars, offering stunning ocean views and lively atmospheres.
- Restaurants and cafes: The city boasts a diverse culinary scene, with a wide range of restaurants and cafes serving both local and international cuisine.
- Live music and entertainment: Da Nang has a growing live music scene, with bars and clubs featuring local and international artists.
Da Nang’s entertainment and nightlife scene is continually evolving, offering visitors and residents a variety of options to enjoy their leisure time.
What’s next?
Da Nang has emerged as a dynamic and attractive city for businesses seeking to invest and operate in Vietnam. Its strategic location, coupled with a favourable investment climate, a growing economy, and a focus on sustainable development, has positioned the city as a competitive destination for both domestic and foreign enterprises.
Da Nang’s thriving tourism industry, combined with its growing manufacturing and service sectors, offers a diverse economic landscape with significant opportunities for businesses. While challenges such as infrastructure bottlenecks and competition from other cities exist, the city’s proactive approach to development and its commitment to improving the business environment are key factors in its ongoing success.
As Vietnam continues to integrate into the global economy, Da Nang is well-positioned to capitalise on the opportunities presented by the expanding market.
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