Entities eligible for investment incentives in Vietnam 2022

Entities eligible for investment incentives in Vietnam 2022 (Source: Internet)

1. Forms of investment incentives in Vietnam

According to Clause 1, Article 15 of the Law on Investment 2020, the forms of investment incentives 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.

2. Entities eligible for investment incentives in Vietnam

According to Clause 2, Article 15 of the Law on Investment 2020, entities eligible for investment incentives:

- Investment projects in business lines eligible for investment incentives specified in Clause 1 Article 16 of Law on Investment 2020;

- Investment projects located in the areas eligible for investment incentives specified in Clause 2 Article 16 of Law on Investment 2020;

- 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;

- 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.

- 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;

- Start-up projects, national innovation centers and research and development centers;

- 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.

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

Note: The investment incentives applied to the objects mentioned in Points b, c and d Clause 2 of Article 15 of Law on Investment 2020 do not apply to:

- Projects on investment in mineral mining;

- 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.

- Projects on investment in commercial housing construction prescribed by the Law on Housing.

- 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.

- An investment project that is eligible for various levels of investment incentive, including investment incentive specified in Article 20 of Law on Investment 2020 may apply the highest level.

3.  Procedures for applying investment incentives in Vietnam

Article 23 of Decree 31/2021/ND-CP stipulates the procedures for applying investment incentives as follows:

- The decision on approval for investment guidelines, investment registration certificate and decision on investor approval shall provide for the forms, bases and conditions for application of investment incentives as prescribed in Articles 15 and 16 of the Law on Investment 2020 and Article 19 of Decree 31/2021/ND-CP.

- According to the investment incentives specified in the decision on approval for investment guidelines, investment registration certificate or decision on investor approval, the investor shall follow receiving investment incentives at incentive-applying authorities corresponding to each type of incentive.

- The bases for application of investment incentives to several enterprises and investment projects specified in Clause 5 Article 19 of Decree 31/2021/ND-CP include:

+ The certificate of science and technology enterprise, regarding a science and technology enterprise;

+ The certificate of hi-tech agricultural enterprise, regarding a hi-tech agricultural enterprise;

+ The certificate of hi-tech project, regarding a hi-tech project;

+ The incentive certificate of manufacture of supporting industry products, regarding a supporting industry project;

+ The certificate of transfer of technology the transfer of which is encouraged under the Prime Minister’s regulations, regarding a project involving transfer of technology on the List of technologies the transfer of which is encouraged.

- Investors in projects other than those specified in Clauses 2 and 3 of Article 23 of Decree 31/2021/ND-CP shall determine their investment incentives and follow procedures for receiving investment incentives at incentive-applying authorities corresponding to each type of incentive according to the objects entitled to investment incentives in Article 19 of Decree 31/2021/ND-CP and relevant regulations of law.

Ngoc Nhi

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