When investing in any market, what investors are interested in is not only the market’s development, potential but also investment incentives. With the policy of industrialization and modernization of the country, over the past years, the State has always reformed and brought the most beneficial regulations to attract investors in general and foreign investors in particular.
When foreign investors execute investment projects in Vietnam in industries and areas eligible for investment incentives, they are entitled to the followings incentives. As follow:
INCENTIVES ON FINANCIAL POLICY
Corporate income tax
Foreign enterprises are entitled to a reduction of up to 50% of corporate income tax compared to ordinary enterprise, in which tax exemption for the first 4 years and investors only have to pay ¼ of the normal income tax for the next 9 years for income from the following investment activities:
- Income of an enterprise from performing new investment projects in areas with extremely difficult socio-economic conditions, economic zones, and hi-tech zones
- Enterprise income from implementing new investment projects: scientific research and technology development; high technology application; production of composite materials, light construction materials, and rare and precious materials; renewable energy production, clean energy, energy from waste destruction; biotechnology development; environmental Protection;
- Enterprise income from socialization activities in the fields of education – training, vocational training, health, culture, sports and environment, judicial expertise
Enterprises are entitled to 17% tax incentives for a period of 15 years, of which 2 years tax exemption and 50% reduction of tax on incomes for no more than 4 subsequent years from the following investment activities:
- Income of the enterprise from performing new investment projects in areas with difficult socio-economic conditions;
- Income of enterprise from implementing new investment projects, including: high-grade steel production; manufacturing energy-saving products; manufacture of machinery and equipment for agricultural, forestry, fishery and salt production; manufacture of irrigation equipment; production and refinement of feed for cattle, poultry and aquatic animals; developing traditional professions.
- Income of enterprise from performing new investment projects in industrial zones, except for industrial zones in areas with favorable socio-economic conditions
Foreign investor shall be exempted from import duties for goods imported to create fixed assets, raw materials, supplies and components; goods imported to process, products processed for export; imported goods for export production.
Land and water surface rent exemption
Exemption from land rent or water surface rent during basic construction under the project but not exceeding 03 years from the date of issuance of the decision on land lease or water surface lease
Land rent exemption after the period of land rent exemption or water surface rent exemption for the basic construction period, specifically as follows:
- 03 years for projects on the list of investment incentive fields; for new production and business establishments of economic organizations that are relocated according to planning, and relocated due to environmental pollution.
- 07 years for an investment project in an area with difficult socio-economic conditions.
- 11 years for investment projects in regions with extremely difficult socio-economic conditions; investment projects on the list of domains in which special investment incentives are given; projects on the list of investment incentive fields invested in geographical areas with difficult socio-economic conditions.
- 15 years for projects on the list of investment incentive fields invested in areas with extremely difficult socio-economic conditions; projects on the list of domains in which special investment incentives are given and invested in geographical areas with difficult socio-economic conditions.
For agricultural projects
Agricultural projects in one of the business lines specified in an extremely disadvantaged area as defined in the Law on investment: exemption of land rent, water surface rent.
Agricultural project in one of the business lines in a disadvantaged area as defined in the Law on investment: exemption of land rent, water surface rent for the first 15 years and 50% reduction of land rent, water surface rent for the next 7 years.
Besides investment incentives, investors should pay more attention to other factors such as environment, labor safety, human resources,..
Above is a typical example of the investment incentives that foreign investors receive when investing in Vietnam. To know more about investment, please feel free to contact us at:
Ms. Gracie – Juridical Executive of MRS Steel