Vietnamlawmagazine

What are forms of, and sectors and projects eligible for, investment incentives given by the Vietnamese State?

Under 15.1 of the 2020 Investment Law, investment incentives may be given in the following forms:

• Corporate income tax (CIT) incentives, including application of CIT rates lower than ordinary tax rates for a definite period of time or for the whole implementation period of investment projects; exemption from or reduction of CIT and other incentives in accordance with the CIT law;

• Exemption from import duty on goods imported to create fixed assets; and materials, supplies and components imported for production in accordance with the import duty and export duty law;

• Land use levy, land rental or land use tax exemption or reduction;

• Accelerated depreciation, or increase of deductible expenses upon the calculation of taxable incomes.

Regarding subjects eligible for investment incentives, according to Articles 15 and 16 of the 2020 Investment Law, investment incentives will be given to:

(i) Investment projects in sectors or trades eligible for investment incentives, including:

• Hi-tech activities, hi-tech supporting industry products, research and development activities, and production of products formed from outcomes of scientific and technological researches in accordance with the law on science and technology;

• Production of new materials, new energies, clean energies and renewable energies; manufacturing of products with an added value of at least 30 percent and energy-efficient products;

• Manufacturing of electronic products, key mechanical products, agricultural machinery, automobiles and automobile parts; shipbuilding;

• Manufacturing of products on the List of supporting industry products prioritized for development;

• Manufacturing of information technology products, software and digital contents;

• Cultivation, rearing and processing of agricultural, forest and fishery products; forestation and forest protection; salt making; marine fishing and fishing logistics services; production of plant varieties and animal breeds and biotech products;

• Waste collection, treatment, recycling or reuse;

• Investment in development, operation and management of infrastructure facilities; development of mass transit in urban centers;

• Early childhood education, general education, vocational education, and higher education;

• Medical examination and treatment; production of medicines and medicine materials, and medicine preservation; scientific research into preparation technologies and biotechnologies for producing new medicines; manufacturing of medical equipment and devices;

• Investment in physical training and sports facilities for people with disabilities or professional athletes; protection and promotion of the value of cultural heritages;

• Investment in geriatric centers, psychiatric centers, and treatment centers for Agent Orange victims; nursing homes for the elderly, people with disabilities, orphans and homeless and supportless children;

• People’s credit funds and microfinance institutions;

• Production of products and provision of services created by or participating in value chains or industrial clusters.

(ii) Investment projects in areas eligible for investment incentives, including:

• Geographical areas meeting with difficult socio-economic conditions and geographical areas meeting with extremely difficult socio-economic conditions;

• Industrial parks, export processing zones, hi-tech parks and economic zones.

(iii) Investment projects capitalized at VND 6 trillion or more, having disbursed at least VND 6 trillion in three years after obtaining an investment registration certificate or approval of investment policy, and concurrently meeting one of the following criteria: earning an annual turnover of at least VND 10 trillion no later than three years from the year of income generation or employing more than 3,000 workers;

(iv) Social housing investment projects; rural investment projects employing at least 500 workers; and investment projects employing workers with disabilities in accordance with the law on people with disabilities;

(v) Hi-tech enterprises, science and technology enterprises, and science and technology organizations; projects involving transfer of technologies on the List of technologies encouraged for transfer in accordance with the law on technology transfer; technology incubators and science and technology enterprise incubators in accordance with the law on high technology and the law on science and technology; and enterprises producing/supplying technologies, equipment, products and services to meet environmental protection requirements in accordance with the law on environmental protection;

(vi) Innovative startup investment projects, innovation centers, and research and development centers; and,

(vii) Business investment in distribution chains for products of small- and medium-sized enterprises; business investment in technical establishments in support of small- and medium-sized enterprises, and small- and medium-sized enterprise incubators; and business investment in co-working space in support of small- and medium-sized innovative startup enterprises in accordance with the law on support for small- and medium-sized enterprises.-