TAX AND INVESTMENT INCENTIVES

INDUSTRIAL PARKS AND ECONOMIC ZONES IN VIETNAM

An Industrial park refers to an area that is enclosed by definite boundaries, specializing in production of industrial goods and provision of services satisfying the industrial production needs. There are many forms of Industrial parks in Vietnam: Supporting industrial park, Specialized industrial park, Eco-industrial park, Hi-tech industrial park, Industrial symbiosis…

Industrial parks in Vietnam are not only lawful locations for business registration, especially for FDI companies, but also allow the investors to get many investment incentives by-laws, regarding corporate income tax, import tax on goods imported to form fixed assets; export tax; exemption from and reduction of land levy and land rents…

WHAT ARE THE INVESTMENT INCENTIVES IN VIETNAM?

Forms of investment incentives:

1. Corporate income tax incentives, including application of a lower rate of corporate income tax for a certain period of time or throughout the investment project execution; exemption from and reduction of tax and other incentives prescribed by the Law on Corporate Income Tax.
2. Exemption from import tax on goods imported to form fixed assets; raw materials, supplies and components for manufacturing purposes in accordance with regulations of law on import and export tax;
3. Exemption from and reduction of land levy and land rents;
4. Accelerated depreciation, increasing the deductive expenses upon calculation of taxable income.

WHO AND WHICH ENTITIES ARE ELIGIBLE FOR INVESTMENT INCENTIVES?

1. Investment projects in business lines eligible for investment incentives;
2. Investment projects located in the areas eligible for investment incentives (Industrial parks, export-processing zones, hi-tech zones and economic zones);
3. Any investment project whose capital is at least VND 6,000 billion of which at least VND 6,000 billion is disbursed within 03 years from the issuance date of the investment registration certificate or the approval for investment guidelines and which satisfies any of the following criteria: the total revenue is at least VND 10,000 billion per year within 03 years from the year in which the revenue is earned or the project has more than 3,000 employees;
4. Projects on investment in social housing construction; investment projects located in rural areas and employing at least 500 employees; investment projects that employ persons with disabilities in accordance with regulations of law on persons with disabilities.
5. Hi-tech enterprises, science and technology enterprises and science and technology organizations; projects involving transfer of technologies on the List of technologies the transfer of which is encouraged in accordance with regulations of the Law on Technology Transfer, science and technology enterprise incubators prescribed by the Law on High Technologies and Law on Science and Technology; enterprises manufacturing and providing technologies, equipment, products and services with a view to satisfaction of environment protection requirements prescribed by the Law on Environment Protection;
6. Start-up projects, national innovation centers, research and development centers;
7. Investment in business in small and medium-sized enterprises’ product distribution chain; investment in business in technical establishments supporting small and medium-sized enterprises, small and medium-sized enterprise incubators; investment in business in co-working spaces serving small and medium-sized enterprises and startups prescribed by the Law on Small and Medium-Sized Enterprises.
8. Investment incentives shall be given to new investment projects and expansion projects.

AREAS AND BUSINESS LOCATIONS IN VIETNAM ELIGIBLE FOR INVESTMENT INCENTIVES

Areas and locations eligible for investment incentives:

1. Disadvantaged areas and extremely disadvantaged areas;
2. Industrial parks, export-processing zones, hi-tech zones and economic zones.

BUSINESS LINES IN VIETNAM ELIGIBLE FOR INVESTMENT INCENTIVES:

1. Hi-tech activities, hi-tech supporting industry products, research, manufacturing and development of products formed from science and technology results in accordance with regulations of law on science and technology;
2. Manufacturing of new materials, new energy, clean energy, renewable energy; manufacturing of products with an added value of 30% or more; energy-saving products;
3. Manufacturing of key electronics, mechanical products, agricultural machinery, automobiles, automobile parts; shipbuilding;
4. Manufacturing of products on the List of prioritized supporting industry products;
5. Manufacturing of IT products, software products, and digital content;
6. Breeding, growing and processing of agriculture products, forestry products, aquaculture products; afforestation and forest protection; salt production; fishing and fishing logistics services; production of plant varieties, animal breeds and biotechnology products;
7. Collection, treatment, recycling or reuse of waste;
8. Investment in development, operation, management of infrastructural works; development of public transportation in urban areas;
9. Preschool education, general education, vocational education, higher education;
10. Medical examination and treatment; manufacturing of medicinal products and medicinal materials, storage of medicinal products; scientific research into preparation technology and biotechnology serving creation of new medicinal products; manufacturing of medical equipment;
11. Investment in sports facilities for the disabled or professional athletes; protection and promotion of value of cultural heritage;
12. Investment in geriatric centers, mental health centers, treatment for Agent Orange patients; care centers for the elderly, the disabled, orphans, street children;

INDUSTRIAL PARKS AND ECONOMIC ZONES IN VIETNAM  

GENERAL REGULATIONS

1. An Industrial park refers to an area that is enclosed by definite boundaries, specializes in production of industrial goods and provision of services satisfying industrial production needs. 
2. Export processing zone refers to an industrial park specially intended for manufacturing of exported goods, rendering of services meeting the needs of production of exported goods and exporting purposes; which is fenced in under the regulatory provisions applied to the free zones stipulated in law on customs duties.
3. Supporting industrial park refers to an industrial park which specializes in manufacturing supporting industrial products and renders services satisfying the needs of manufacturing of these products; has at least 60% of its industrial land which is used for attracting investment projects on manufacturing of supporting industrial products under law on development of the supporting industry. 
4. A Specialized industrial park refers to an industrial park which specializes in and supplies services needed for manufacturing of products in a specified industry or sector; has at least 60% of its industrial land intended to attract investment projects in such industry or sector. 
5. Eco-industrial park refers to an industrial park in which enterprises located inside its perimeter get involved in cleaner production, make effective use of natural resources and enter into production linkage and cooperation for industrial symbiosis; which meet the criteria stipulated herein. 
6. A Hi-tech industrial park refers to an industrial park that attracts hi-tech and IT investment projects on the classification list of industries and sectors with special investment incentives under the provisions of law on investment; projects with technology transfers on the classification list of technologies eligible for technology transfer incentives as provided in law on technology transfer; technology incubators; science and technology business incubators subject to law on high technology and legislation on science and technology; investment projects on creative entrepreneurship, innovation, research and development, education and training; that has at least 30% of its industrial land used to attract these investment projects.
7. Industrial symbiosis refers to cooperation between enterprises within an industrial park or with enterprises within various ones in order to optimize the use or reuse of input and output factors, such as raw materials, water, energy, waste, scrap, by-products, etc., during the manufacturing and business process.
8. Eco-business refers to a business that simultaneously applies solutions for cleaner production, efficient use of resources and industrial symbiosis in an eco-industrial park; meets the criteria specified in this Decree.
9. An Expanded industrial park refers to an industrial park area formed through an increase in the land size of ​​the preexisting industrial park in which the expanded area of ​​that industrial park is near or adjacent and possibly connected or has access to infrastructure facilities of the preexisting industrial park.
10. Industrial park subdivision refers to a dimensional part of an industrial park that is enclosed with definite boundaries, specializes in manufacturing goods and provision of services that meet the needs of industrial production; determined in the planning scheme for construction of the industrial park approved by the competent state agency. 
11. Infrastructure user fee refers to a type of charge for use of the paid services of technical utility and service infrastructure, including road, electricity supply, water supply, water drainage, communication, wastewater, waste and other public service and utility works.
12. Project on construction and business of infrastructure facilities of an industrial park refers to an investment project using land for constructing synchronous technical infrastructure at the industrial park and leasing or sub-leasing land to investors for construction of premises, offices, storage yards and facilities, public service and utility facilities; implementation of investment projects; organization of production and business activities under the law. 
13. Economic zone refers to an area that is enclosed with specified geographical boundaries, including functional zones and is established to meet the objectives of calling for investments, promoting socio-economic development and maintaining national defense and security. 
14. Coastal economic zone refers to an economic zone established at and near the coast. 
15. Border-gate economic zone refers to an economic zone established at and near the land border. 
16. Specialized economic zone refers to an economic zone established at a key economic region, dynamic development corridor, or region having similar functions that are specified in the regional planning scheme.
17. A Free trade zone in an economic zone refers to a free zone specified in the master plan for construction of an economic zone. 
18. Agricultural land area refers to an area of land in ​​an industrial park which is leased or sub-leased to an investor to build its premises, office, storage yards, facilities, carry out its investment projects, organize production and business activities; specified in the planning scheme for construction of the industrial park approved by the competent state authority.
19. Service land area refers to an area of land in ​​an industrial park which is leased or sub-leased to an investor to build public service, utility facilities and carry out its investment projects; specified in the planning scheme for construction of the industrial park approved by the competent regulatory authority.
20. Export processing refers to a specialized act of manufacturing of exported commodities and provision of services for production of exported products and exportation.
21. Export processing enterprise refers to an enterprise performing the export processing function in an export processing zone, industrial zone and economic zone.
22. The occupancy rate of an industrial park refers to the proportion in percent (%) of industrial and service land that has been leased or sub-leased to the investor obtaining the investment policy, investment registration certificate to build project premises, office, storage yards, facilities, public service and utility facilities, execute an investment project, organize production and business activities under law to total area of industrial and service land of the industrial park. 
23. Public service and utility facility for workers in an industrial park or economic zone refers to a public work classified according to its function or usability as per legislation on construction, including educational, training and research institutions; healthcare establishments; sports and culture centers and parks; shopping malls; accommodation facilities; service and other infrastructure facilities built to directly serve personnel working in that industrial park or economic zone. 
24. National industrial park or economic zone information refers to the specialized industrial park and economic zone information system which is developed and operated under the provisions hereof to send, receive, store, display and perform other operations with respect to data intended for the state management of industrial parks and economic zones.
25. Industrial cluster in an industrial park refers to both cooperative and competitive form of association between enterprises in the same industry and interested enterprises or organizations operating at that industrial park.

To apply for tax incentives, the investors, in addition to choosing the right scopes of business lines and investment areas, must also strictly follow the procedures for granting investment certificates, investment capital, and contributions, tax invoices and accounting regimes according to Vietnamese regulations.

VIVA Business Consulting provides a platform to help manage and choose industrial parks in Vietnam according to tax incentive criteria, manage investment and required business compliance procedures from the entry market step and during business operation, manage rental contracts and relationships with industrial park owners.

ABOUT VIVA BUSINESS CONSULTING

Who we are?

• VIVA is a business consulting company, specializes in business compliance procedures according to local business laws and regulations since 2006. VIVA has been continuously trusted by thousands of well-known clients since 2006.
• The insights and consistent backgrounds in Business Laws – Accounting and Corporate Finance – Tax Management – Labor Relations and Payroll – Secretarial services help us build trust and confidence in the entrepreneur's community.
• We have been successfully providing service for thousands of leading companies from Hong Kong, Japan, US, EU, Singapore, India, China, Korea…. in forms of FDI companies, Foreign representative offices, Foreigners working in Vietnam, Vietnamese SMEs, Chief Operation Officers.

What we do

• Services for Expats in Vietnam: Visa, Work Permit, Temporary residence card, Compulsory Insurances, Personal Income tax, Labor contracts, Employment Records and Relations, Other Secretarial Services.
• Services for Representative offices in Vietnam: Establishment, extension of representative office licenses. Required compliance procedures during operation. Rights and obligations of the chief of representative office. Closure of representative office risks management.
• Services for a company in Vietnam: Setting up a new company and licensing service. Business records management. Daily business transactions management. Tax management. Accounting and financial statements. Employments, payroll and compulsory insurances. Representative on behalf of competent state agencies for any business administration procedures.

Motivated by our core values of ceaseless improvement, our great insights in local business culture and regulations, as well as the exclusive services, promise to offer one-stop business platform with exclusive and tailored-made services that optimize every of your business in Vietnam in the lawful manner.

We are looking to be your valued business partner and resources in Vietnam as we have been being chosen since 2006.

Read more:

• Tax management – tax planning in Vietnam – properly comply to optimize your long term business
• Investment in Vietnam – incentives on corporate income tax (CIT)
• Company registration in Vietnam
• How to buy a company in Vietnam
• Investment visa in Vietnam: type and time limits
• Investment in Vietnam: market entry
• Investment in Vietnam: restructuring – acquiring and selling a company
• Legal documents review & completion for business in Vietnam
• Investment in Vietnam – granting of approval for investment guidelines
• DUNS number: standard worldwide and unique numeric identifier for business
• FDI companies in Vietnam – managing the required compliance procedures