Preferential policies for investment support are always of interest to investors who want to make investments in Vietnam. To attract investment, the State always improves and applies various policies and forms of incentives. According to these policies, new points on preferential policies to support investment in Investment Law 2020 , effective January 01, 2021 is noteworthy.
Article table of contents
Incentives to support investment in Vietnam in 2021: new points to know (Illustration)
1. Addition of new beneficiaries in Vietnam who are entitled to investment incentives
Specifically, Clause 2, Article 15 of the Investment Law 2020 adds the following beneficiaries:
- Projects on investment in social housing construction. Investment projects that employ persons with disabilities in accordance with regulations of law on persons with disabilities in Vietnam.
- 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 in Vietnam.
- 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 in Vietnam.
Previously, these subjects were not regulated in the Law on Investment 2014 (expired on January 1, 2021).
2. Investment incentives in Vietnam do not apply to commercial housing construction
In addition to the projects that are not entitled to investment incentives previously provided for in the Investment Law 2014, at Point c, Clause 5, Article 15 of the Investment Law 2020, the following investment incentives shall not apply to investment projects in construction of commercial houses in accordance with the housing law:
- Investment projects in the area of investment incentives in Vietnam.
- 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 in Vietnam.
3. Supplementing incentives and special investment support in Vietnam
According to Article 20 of the Investment Law 2020, the beneficiaries of preferential treatment and special investment support include:
- Projects on investment in establishment (including the expansion of such establishment project) of innovation centers and research and development centers with a total investment capital of at least VND 3,000 and disbursing at least VND 1,000 billion within 03 years from the issuance date of the investment registration certificate or the approval for investment guidelines; the National Innovation Center established under the Prime Minister's decision.
- Investment projects in the business line eligible for special investment incentives with an investment capital of at least VND 30,000 billion and disbursing at least VND 10,000 billion within 03 years from the issuance date of the investment registration certificate or the approval for investment guidelines in Vietnam.
Note:
- Special investment incentives and supports in Vietnam do not apply to the following cases:
Investment projects have been granted investment certificates, investment registration certificates or investment policy decisions before January 1, 2021;
Projects are not entitled to investment incentives under the provisions of Article 15 of the Investment Law 2020.
- The preferential rate and time limit for application of special incentives in Vietnam shall comply with the provisions of the Law on Corporate Income Tax and the law on land in Vietnam.
- In case it is necessary to encourage the development of a particularly important investment project or a special administrative-economic unit, the Government shall submit to the National Assembly a decision on the application of investment incentives other than those prescribed in this Law and other laws in Vietnam.
Bao Ngoc
