Forms and beneficiaries of Investment Incentives
To: Forum Administrators
My name is Lundvik Nilsson, I am currently collecting some information to start a business. Could you please tell me what are the beneficiaries of investment incentives and the form of incentives?
Thank you and best regards
To: Mr. L. Nilsson
We would like to share information from Vietnam's Law on Investment for your question as follow:
Article 15. Forms and objects for application of investment incentives
1. Forms of investment incentives:
a) 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.
b) 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;
c) Exemption from and reduction of land levy and land rents;
d) Accelerated depreciation, increasing the deductible expenses upon calculation of taxable income.
2. Entities eligible for investment incentives:
a) Investment projects in business lines eligible for investment incentives specified in Clause 1 Article 16 of this Law;
b) Investment projects located in the areas eligible for investment incentives specified in Clause 2 Article 16 of this Law;
c) 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;
d) 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.
dd) 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;
e) Start-up projects, national innovation centers and research and development centers;
g) 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.
3, Investment incentives shall be given to new investment projects and expansion projects.
4. 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.
5. The investment incentives applied to the objects mentioned in Points b, c and d Clause 2 of this Article do not apply to:
a) Projects on investment in mineral mining;
b) Projects on investment in manufacturing/sale of goods/services subject to special excise tax according to the Law on Special Excise Tax, except for projects on manufacturing of automobiles, aircrafts and yachts.
c) Projects on investment in commercial housing construction prescribed by the Law on Housing.
6. Investment incentives applied for a fixed term and on the basis of results of project execution. Every investor must satisfy conditions for investment incentives in accordance with regulations of law during the period of enjoying investment incentives.
7. An investment project that is eligible for various levels of investment incentive, including investment incentive specified in Article 20 of this Law may apply the highest level.
8. The Government shall elaborate this Article.
The above is the Forms and objects for application of investment incentives, for your reference.
Investment Promotion Department – CPA