INVESTMENT INCENTIVES AND PROCEDURES FOR APPLYING INVESTMENT INCENTIVES

INVESTMENT INCENTIVES AND PROCEDURES FOR APPLYING INVESTMENT INCENTIVES

Vietnam currently has various policies to attract investment not only domestic investors but also foreign investors, which include policies on investment incentives. So what are the regulations on investment incentives and what are the procedures for applying investment incentives? HTC Vietnam Law Firm will answer in the article below.

I. Legal basis

- Law on Investment 2014

- Decree 118/2015/ND-CP

II. Consulting content

1. Entities eligible for investment incentive

Entities eligible for investment incentives consist of:

- Investment projects in business lines eligible for investment incentives specified in Law;

- Investment projects located in the disadvantaged areas and extremely disadvantaged areas specified in Law;

- 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 from the date of issuance approval for investment guidelines for the project is not required to carry out the procedures for issuance of the Investment Registration Certificate;

- Investment projects located in rural areas and employing at least 500 employees (excluding part-time workers and employees with less than 12 months of labor contracts);

- Hi-tech enterprises, science and technology enterprises and science and technology organizations prescribed by the Law on High Technologies and Law on Science and Technology.

2. Rules for enjoying the incentive investment

- 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 from the date of issuance approval is entitled to investment incentives as prescribed for investment projects located in the disadvantaged areas.

- Investment projects located in rural areas and employing at least 500 employees are entitled to investment incentives as prescribed for investment projects located in the disadvantaged areas.

- Investment projects in business lines eligible for investment incentives located in the disadvantaged areas are entitled to investment incentives as prescribed for investment projects located in the disadvantaged areas.

- Investment projects that satisfy the conditions for enjoying different levels of investment incentives are entitled to the highest incentives.

- Corporate income tax incentives for investment projects in industrial parks, export-processing zones comply with the law on corporate income tax.

- Incentives on land rents according to the areas of industrial parks and export-processing zones are not applicable to investment projects in industrial parks and export-processing zones in inner urban districts of special-class cities and grade-I cities directly under the central government and grade-I cities directly under the province.

3. Procedures for applying investment incentives

- Investment incentives stated in the investment registration certificate and the decision on investment guidelines document include the following contents:

+ Subjects and conditions for enjoying investment incentives as prescribed.

+ The basis for application of investment incentives in accordance with the provisions of the tax law and the law on land.

- For an investment project subject to an investment registration certificate or investment guidelines, investors shall determine investment incentives themselves and follow procedures for enjoying investment incentives. The basis for application of investment incentives to science and technology enterprises is the certificate of science and technology enterprise.

- For an investment project that is not subject to the issuance of an Investment Registration Certificate or decision on investment guidelines, the investor shall base himself on the beneficiaries of investment incentives and relevant law provisions to determine investment incentives and carry out procedures for enjoying investment incentives at the investment incentives competent authority.

- Investment incentives are adjusted in the following cases:

+ In case the investment project meets the conditions to enjoy additional investment incentives, investors are entitled to enjoy the new incentives for the remaining period of the incentive enjoyment of the project.

+ Investors are not entitled to incentives as prescribed in the Investment Registration Certificate, the decision on investment guidelines document because the investment project does not satisfy the conditions for enjoying investment incentives. In case the investment project satisfies the conditions for enjoying other investment incentives, the investor shall be entitled to incentives according to such conditions.

+ In case the investment project does not satisfy the conditions for enjoying investment incentives for a period of time, the investor is not entitled to investment incentives for the period of time when the conditions for enjoying investment incentives are not satisfied.

- Newly established economic organizations or implementing investment projects from the transformation of the type of economic organization, divestiture, division, separation, consolidation, merger, transfer of investment projects of inherited investment projects investment incentives of investment projects before transform, division, separation, consolidation, merger, transfer.

The aforementioned are the consultations about investment incentives and procedures for application of investment incentives in accordance with Vietnamese law. HTC Law Firm is pleased to accompany clients with all legal problems. For the best consultancy service, please get in touch with us.

(Writer: Tuấn Anh

Translator: Nguyễn Thị Liên)