To satisfy the actual demand of those working in industrial zones (IZs), recently, more and more investors are exploring possibility to do the accommodation service business (e.g. hotel, condotel, officetel, …) (Accommodation Business) within IZs.

There is however no clear legal basis under Vietnamese laws for the Accommodation Business to be conducted within an IZ. This is because:

a) Decree 82/2018 on IZs prohibits people from residing in the industrial zones, except for foreigners being managers, chief executive officers, and experts who can temporarily reside in an enterprise located within the IZs subject to the satisfaction of certain conditions. For instance:

i) The temporary resident does not stay with his/her family and relatives;

ii) The accommodation of temporary residence must be separated from production and office areas and meet construction standards applied to housing; the enterprise must register the temporary residence for the foreigners and undertake to ensure the security, order and no impact to the operation of IZs; and

iii) The purpose of temporary residence is for the business and production needs of enterprise.

The above suggests that the foreigners who temporarily reside in an IZ can only stay in housing facilities developed by the enterprise, rather than in accommodation facilities provided by a third party.

b) Though Article 32.5 of Decree 82/2018 allows the development of social housing within IZs for employees working in such IZs, this type of housing should not cover short-term accommodation or multiple-purpose apartments.

However, if the IZs are industrial - service – urban zones (Service IZs), investors should be able to provide the accommodation service within these IZs because this service should be covered by the objectives of the Service IZs. Specifically,

a) Under Decree 82/2018, a Service IZ will include (i) IZ as the main functional zone, and (ii) urban - service area which is designed to have such functions as support and provision of public utilities for the IZ (including houses, hospitals, schools, research and development centers, business incubators and other socio-economic projects necessary for consistent and sustainable development of the entire area); and

b) Objectives to develop Service IZs is to (i) solve issues arising from lack of housing, cultural and sports facilities and other social facilities to maintain the living standards of employees in IZ; and (ii) create modern living and working environment, full of public utilities and services for inhabitants and employees.

This post is written by Le Vo Thuy Tien and edited by Hoang Thi Thanh Thuy.

Vietnam Business Law