Investment Incentives in Vietnam

Investment Incentives in Vietnam in accordance with Law on Investment 2014

Post date: 28-03-2016

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Investment Incentives in Vietnam

Investment Incentives in Vietnam

1. Forms of application of investment incentives in Vietnam [shall comprise]:

(a) Application of a lower rate of corporate income tax than the normal tax rate for a definite period or for the whole duration of implementation of the investment project; and exemption from and  reduction of corporate income tax;

(b) Exemption  from  import duty  in  respect of goods  imported  to  form  fixed assets; raw materials, supplies and components for implementation of an investment project;

(c) Exemption from and reduction of land rent, land use fees and land use tax.

2. Objects entitled to investment incentives in Vietnam:

(a) Investment  projects  in  the  preferential  investment  industries  and  trades as follows:

  1)  High-tech  activities,  industrial  products  which  support high-tech; and  research  and development activities;
  2) Production  of  new materials, new  energy,  clean  energy or  renewable  energy;  production  of  products with an added value of 30% or more, and energy-saving products;
  3) Production of electronics, prioritized mechanical products, agricultural machinery, automobiles,  automobile parts; and shipbuilding;
  4) Production of industrial products which support [production of] garments and textiles or leather products and the products prescribed in paragraph 3) of this clause.
  5) Production of products of information technology, software and digital content [products];
  6) Breeding, growing and processing agricultural, forestry and aquaculture products; afforestation and  protection  of  forests; salt  production;  fishing and  fishing  logistics,  creation  of  plant  and animal varieties and  production of products of biological technology;
  7) Collection, processing, reprocessing or reuse of refuse;
  8) Investment  in  development  and  operation,  and management  of  infrastructure  facilities;  and  development of public transportation in urban areas;
  9) Pre-school education, general education, and vocational education;
  10)  Medical consultation and  treatment; production of medicines,  raw materials  for production of  medicines,  principal  medicines,  essential  medicines  and  medicines  for  prevention  and  treatment  of  social  diseases,  vaccines,  medical  biological  products,  medicines  from  pharmaceutical materials, oriental medicines; and scientific  research  in  relation  to  technology of preparation or biological technology for production of new medicines;
  11)  Investment  in  facilities  for  training and competition of sports or physical practice  for disabled  people  or  for  professional  sportsmen; and  protection  and  promotion  of  the  value  of  cultural heritage;
  12)  Investment  in  centres  for  geriatrics,  psychiatry  or  treatment  of  patients  exposed  to  Agent Orange, and centres for care of the old, disabled, orphans or street children without support;
  13)  People”s credit funds, and micro-financial institutions.

(b) Investment projects located in preferential investment geographical areas as follows:

  1) Areas with difficult socio-economic conditions; and areas with specially difficult socio-economic conditions;
  2) Industrial zones, export processing zones, high-tech zones and economic zones.

(c) Projects with a scale of capital being 6,000 billion Dong or more of which at least 6,000 billion  Dong is disbursed for a period of three years from the date of issuance of the IRC or the date  of the decision on the investment policy;

(d) Investment projects located in rural areas and employing 500 employees or more;

(dd) High-tech enterprises, and scientific and technological enterprises or organizations.

3. Investment  incentives  shall  apply to  new  investment  projects  and  expanded  investment  projects. Specific  levels of  incentives  in  respect of each  type of  investment  incentives shall be applicable  in accordance with the law on taxation and the law on land.

4. The  investment  incentives  applicable  to  the  objects  prescribed  in  clause  2.(b),  (c)  and  (d)  of  this article do not apply to investment projects for exploitation of minerals; or for production or business in goods or services subject to special sales tax stipulated by the Law on Special Sales Tax, except for manufacture of automobiles.

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