Investment in Da Nang: A Rising Star for Tourism and High-Tech Industries

At first, known for its year-round warm climate, over 20 kilometers of pristine white sandy beaches, and stunning mountain landscapes, Da Nang is a premier destination for travelers. Home to three nearby UNESCO World Heritage sites, Vietnam’s fourth-largest city has consistently ranked as the country’s most popular tourist hotspot. But beyond its appeal to vacationers, investment in Da Nang is gaining momentum across various sectors. The city has developed into a thriving hub for software development and is making significant strides in high-value manufacturing. Major infrastructure projects and top-tier foreign investments are driving this transformation, positioning Da Nang as a strategic location not only for tourism but also for tech innovation and industrial growth. For investors seeking opportunities in Vietnam, investment in Da Nang offers both potential and promise.

Please note that this article is part of a marketing project in cooperation with Danang Hi-tech Park and Industrial Zones Authority.

Strategic Location Driving Investment in Da Nang

Ideally positioned on the East Sea with direct access to the Pacific Ocean, Da Nang holds a crucial advantage for regional trade and economic development. Surrounded by the Annamese Cordillera to the north and west, and bordered by Thua Thien Hue Province in the north and Quang Nam Province in the south, the city also oversees the Hoang Sa island chain. Furthermore, with a population of approximately 1.2 million, Da Nang ranks as Vietnam’s fourth-largest city after Ho Chi Minh City, Hanoi, and Haiphong. Thanks to this strategic location, well-connected infrastructure, and demographic strength, investment in Da Nang is becoming increasingly attractive—particularly in logistics, smart manufacturing, and high-tech industries.

Historical Significance Enhancing Investment Potential

Historically, Da Nang has played a pivotal role in Vietnam’s development. In the 17th century, following China’s embargo on Japanese goods, Da Nang’s port quickly emerged as a vital transshipment hub between Japan and China. Although initially overshadowed by nearby Hoi An, the city steadily gained importance and, by the 19th century, overtook its neighbor in regional relevance. In 1847, Da Nang became the landing point for French colonial forces, later integrating into French Indochina in 1887. Decades later, during the Vietnam War, it was the first place American troops arrived—leading to massive infrastructure upgrades, including to its airport and seaport. Subsequently, in 1997, Da Nang and three surrounding provinces were designated as Vietnam’s third Key Economic Zone. As a result, the city has transformed into the economic powerhouse of Central Vietnam. Today, with a unique blend of historical significance, modern infrastructure, and government-backed development plans, investment in Da Nang continues to gain momentum across a wide range of industries.

Tourism Boom Strengthens Investment in Da Nang

Da Nang is widely recognized as one of Vietnam’s top tourism destinations. In 2019 alone, the city welcomed approximately 8.7 million visitors. Until recent global disruptions, tourist arrivals had been increasing at double-digit rates annually. Notably, Da Nang was voted the number one most popular destination among tourists in Vietnam. Thanks to its breathtaking natural beauty and vibrant attractions—such as the famous My Khe Beach, the Marble Mountains, the Dragon Bridge, the Golden Bridge, Ba Na Hills, and theme parks like Sun World—the city continues to captivate both domestic and international travelers. Additionally, the presence of nearby UNESCO World Heritage Sites, including Hoi An, My Son, and Hue, further enhances Da Nang’s appeal. As a result, nearly 30% of the city’s GDP is generated by the tourism sector, making it a powerful engine for investment in Da Nang.

Infrastructure and Quality of Life Fuel Long-Term Investment

In response to the city’s tourism boom, Da Nang has seen the rapid development of luxury hotels, beachfront resorts, stylish restaurants, lively bars, and trendy cafés. Moreover, international-standard hospitals and schools have been established, contributing to the city’s growing reputation as a global destination for both tourists and residents. In terms of infrastructure, Da Nang offers a modern and well-planned road network that not only surpasses Hanoi and Ho Chi Minh City in quality and coverage but also experiences far less congestion. Additionally, the cleaner air quality adds to the city’s overall charm. Consequently, Da Nang has earned a reputation among expatriates as Vietnam’s most “livable” city. This high standard of living, combined with strong infrastructure and consistent tourist demand, continues to attract foreign and domestic investment, especially in sectors such as hospitality, real estate, healthcare, and education.

Airport Development Boosting Investment in Da Nang

Da Nang International Airport is the city’s main gateway, originally built in 1940 and significantly upgraded during the 1950s and 1960s. In recent decades, the airport has expanded rapidly to meet rising demand. Terminal 1 (domestic) opened in 2011, followed by Terminal 2 (international) in 2017.

Currently serving 35 international and 10 domestic routes, the airport handled 13 million passengers in 2018, making it Vietnam’s third busiest. By 2030, that number is projected to reach 28 million, with freight capacity doubling to 200,000 tons. Its central location and modern facilities make it a key driver for investment in Da Nang, especially in tourism, logistics, and trade.

Software Industry Accelerates Investment in Da Nang

Da Nang is fast becoming a tech hub, thanks to its young talent pool, affordable costs, and high quality of life. Major companies like FPT and Viettel, along with growing SMEs such as Rikkeisoft and Axon Active, are fueling the city’s tech growth.

In 2019, IT service exports reached $89 million, up 14% from 2018. The workforce in software development is expected to grow from 12,000 to 35,600 by 2025. With one operational Software Park and three more planned, the tech sector is set to contribute 15% of Da Nang’s GDP by 2030. These developments make the digital economy a major focus for investment in Da Nang.

Manufacturing Industry

With tourism and software development making up almost 40% of Da Nang’s industry it may be said that the city is an established service hub. However, it is also making forays into manufacturing. 1.6 million US-Dollars have flown into industrial investments in Da Nang. Most of these manufacturing activities are originating from Japan, the USA and Korea. As can be seen below, they are concentrating on electronic parts as well as high-value-add products. This sets Da Nang apart from other regions in Vietnam which are more focused on low-value-add goods. The city was able to attract these investments because of the following factors:

– Young and well-educated urban workforce

– Local infrastructure:

• Airport (see above)
• Port (see below)
• Road (located on National Road 1A and the new North-South Expressway)
• Rail (located on the North-South Railway with a dedicated freight station at Lien Chieu)

– Good living environment for expats

A prominent project realized in 2019 is an aircraft part production facility of the Universal Alloy Corporation (UAC). With an investment sum of 170 million USD, this American-Austrian investment currently is the largest foreign project in Da Nang. It aims to utilize Da Nang’s ample supply of highly qualified staff. Furthermore, UAC is profiting of Da Nang Hightech Park’s favorable location as well as the investment incentives investors can receive here.

With Hoa Khanh, Lien Chieu and Da Nang Hi-tech Park (DNHTP) the city currently has three major industrial zones. Our partner for this article, DNHTP, is the youngest of these projects and thus offers the most available space.

Da Nang Hi-tech Park has been established in 2010 and currently operates 179 ha of land. It is only the third “Hightech Park” after similar projects in Hanoi and Ho Chi Minh City. It offers very competitive pricing for land. Also, investors in DNHTP enjoy CIT exemptions and reductions for up to 28 years after their first year of taxable income. To make use of these incentives, companies have to focus on activities stipulated in a list of investment in “hi-tech” parks in Vietnam. Furthermore, 1% of annual revenue have to be spent on R&D. One more USP of DNHTP is its proximity to the new terminal of Da Nang Port.

Port Development

Da Nang is the central outport for the whole central region. It has had this role since the 19th century when the French administration set up the location of its current main terminal of “Tien Sa”. The Americans then expanded the port during the 1960s to support their war efforts in Vietnam. Tien Sa terminal offers a natural port with sufficient draft and calm waters on the Eastern edge of Da Nang Bay. It can receive ships of a size of up to 70,000 DWT and handles about 12 million t of cargo annually. However, while freight volumes are increasing by double-digits, space at Tien Sa is limited. And thus, a new terminal will be built. The “Lien Chieu” terminal is being developed on the western side of Da Nang Bay. Its first phase worth 315 million USD will be finished in 2022 and handle 3.5 million t annually. After all three phases have been completed (probably by the 2030s) the Lien Chieu terminal will handle roughly 20 million t of freight per year. By this time, the current main terminal of Tien Sa will be converted into a tourism port welcoming cruise ships.

Conclusion

In summary, Da Nang has a strong standing in Vietnam’s recent history. However, after the country’s reunification in 1975 the city struggled to live up to its potential. Capitalizing on its natural environment, it eventually developed tourism as a first pillar of its local economy. Its young and qualified workforce then attracted software development companies. IT services today is Da Nang’s second economic pillar. In the future, the city will probably shape itself into a magnet for high-tech manufacturing investments. Da Nang’s favorable natural environment, its excellent logistical connection, the highly qualified workforce as well as its effective administrative support are key factors for this development. And thus, we will likely see more “High-Tech on the Beach”.

…and Action! Here is our video on Da Nang: