Procedures for application of investment incentives in Vietnam

Hi DMS Law firm in Vietnam! Can you advise me about forms, beneficiaries, sectors, geographical areas and procedures of Investment incentives in Vietnam ? 

Hi!

Forms of investment incentives in Vietnam:

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, reduction of corporate income tax;

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

Exemption from,  reduction of land rent, land use fees and land use levy.

Beneficiaries of investment incentives in Vietnam:

Investment projects in the preferential investment industries and trades prescribed in Clause 1 Article 16 of this Law;

Investment projects located in preferential investment geographical areas prescribed in Clause 2 Article 16  of this Law;

Projects with a scale of investment capital of 6,000 billion Dong or more of which at least 6,000 billion Dong is disbursed within 03 years from the date of issuance of the Investment Registration Certificate (IRC) or the date of the decision on the investment policy;

Investment projects located in rural areas that employ at least 500 employees;

High-tech enterprises, and scientific and technological enterprises or organizations.

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.

The investment incentives applicable to the objects prescribed in Points b, c, and d Clause 2 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.  

Preferential investment industries, trades in Vietnam:

High-tech activities, high-tech ancillary products, research and development activities;

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;

Production of electronics, key mechanical products, agricultural machinery, automobiles, automobile parts; and shipbuilding;

Production of ancillary products serving textile, garment industry, leather and footwear industry and the products Point c of this Clause.

Production of IT products, software and digital content products;

Breeding, growing, 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 biotechnological products;

Collection, processing, reprocessing or recycling of waste;

Investment in development, operation, and management of infrastructure facilities; development of public transportation in urban areas;

Pre-school education, general education, and vocational education;

Medical examination 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; scientific research in relation to technology of preparation technology  or biological technology for production of new medicines;

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;

Investment in centres for geriatrics, psychiatry, treatment for Agent Orange patients, care centres for elders, disabled people, orphans or street children with no refuge;

People's credit funds, and micro-financial institutions.

Preferential investment geographical areas:

Areas with difficult socio-economic conditions; areas with special difficult socio-economic conditions;

Industrial zones, export processing zones, high-tech zones and economic zones.

Based on the preferential investment industries and trades and geographical areas prescribed in Clauses 1 and 2 of this article, the Government shall issue and make amendments and additions to the list of preferential investment industries and trades and the list of preferential investment geographical areas.

Procedures for application of investment incentives:

With respect to projects for which an Investment Registration Certificate (IRC) is issued, the investment registration agency shall write investment incentives, bases and conditions for application of the investment incentives in the IRC.

With respect to projects which do not require an Investment Registration Certificate (IRC) to be issued, investors are entitled to investment incentives without having to apply for an IRC if they satisfy the conditions for entitlement to investment incentives. In this case, the investors shall base on the conditions for entitlement to investment  incentives prescribed in Articles 15 and 16 of this Law and other relevant laws to self-determine investment incentives and perform the procedures for entitlement to investment incentives at the tax authority, financial authority or customs office corresponding to each type of investment incentive (Articles 15, 16 and 17 Law on investment No.67/2014/QH13 dated November 26, 2014).

Related topics:

Conditional business lines in Vietnam

Sectors and trades banned from business investment

Authority of provincial people's committees to make decision on investment policy in Vietnam

Business lines eligible for special investment incentives in Vietnam

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Procedures for application of investment incentives in Vietnam