BUSINESS LINES ELIGIBLE FOR INVESTMENT INCENTIVES, HOW ARE REGULATED?

Enterprises and projects operating in encouraged industries for the purpose of economic and social development may be entitled to investment incentives. What are the business lines eligible for investment incentives in Vietnam according to current regulations?

1. General regulations on investment incentives

– Investment incentives shall be given to new investment projects and expansion projects.

– The level of each type of incentives shall be specified by regulations of the Law on Taxation, the Law on Accounting and the Law on Land.

– Investment incentives applied for a fixed term and on the basis of results of project execution. Noted that, every investor must satisfy conditions for investment incentives in accordance with regulations of law during the period of enjoying investment incentives.

– An investment project that is eligible for various levels of investment incentive, including investment incentive specified by Law may apply the highest level.

2. Business lines eligible for investment incentives

Business lines eligible for investment incentives in accordance with Investment Law include:

– 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;

– Manufacturing of new materials, new energy, clean energy, renewable energy; manufacturing of products with an added value of 30% or more; energy-saving products;

– Manufacturing of key electronics, mechanical products, agricultural machinery, automobiles, automobile parts; shipbuilding;

– Manufacturing of products on the List of prioritized supporting industry products;

– Manufacturing of IT products, software products, digital contents;

– 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;

– Collection, treatment, recycling or re-use of waste;

– Investment in development, operation, management of infrastructural works; development of public transportation in urban areas;

– Pre-school education, general education, vocational education, higher education;

– 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;

– Investment in sports facilities for the disabled or professional athletes; protection and promotion of value of cultural heritage;

– Investment in geriatric centers, mental health centers, treatment for agent orange patients; care centers for the elderly, the disabled, orphans, street children;

– People’s credit funds, microfinance institutions;

– Manufacturing of goods and provision of services that create or participate in value chains and industry linkage clusters.

>> HOW MANY FORMS OF INVESTMENT INCENTIVES ARE THERE? https://linconlaw.vn/how-many-forms-of-investment-incentives-are-there/

>> ISSUANCE PROCEDURES FOR SPORT FENCING BUSINESS LICENSE https://linconlaw.vn/issuance-procedures-for-sport-fencing-business-license/

3. Form of investment incentives

Forms of investment incentives in Vietnam may be applied to investment projects and enterprises according to current Investment laws include:

– 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.

– 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;

– Exemption from and reduction of land levy and land rents;

– Accelerated depreciation, increasing the deductible expenses upon calculation of taxable income.