Top 14 business lines and areas eligible for investment incentives according to the Law on Investment 2020 of Vietnam

According to Article 16 of the Law on Investment 2020 of Vietnam, 14 business lines eligible for investment incentives include:

1. 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;

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

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

4. Manufacturing of products on the List of prioritized supporting industry products;

5. Manufacturing of IT products, software products, digital contents;

6. Breeding, growing and processing of agricultural 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;

7. Collection, treatment, recycling or re-use of waste;

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

9. Pre-school education, general education, vocational education, higher education;

10. 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;

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

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

13. People's credit funds, microfinance institutions;

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

Areas eligible for investment incentives include:

- Disadvantaged areas and extremely disadvantaged areas;

- Industrial parks, export-processing zones, hi-tech zones and economic zones.

According to the business lines and areas eligible for investment incentives mentioned above, the Government of Vietnam shall compile and amend the List of business lines eligible for investment incentives and the List of areas eligible for investment incentives; determine business lines eligible for special investment incentives to be included in the List of business lines eligible for investment incentives.

It can be seen that 14 business lines and areas eligible for investment incentives are:

Firstly, business lines with complex nature, considerable scale, requiring large capital resources, etc. that not everyone has the ability to invest. More importantly, these business lines have great significance and are essential for the country's socio-economic development, especially for a developing country like Vietnam.

Secondly, useful and meaningful business lines for the community and society. For example, collection, treatment, recycling or re-use of waste.

Thirdly, areas eligible for investment incentives are usually those with difficult or extremely difficult socio-economic conditions. It is obvious that conducting investment in remote areas, mountainous areas and islands will often face more obstacles than other locations. Because, not to mention the limited transportation system, in these areas the foundation of infrastructure is very underdeveloped. The lack of human and material resources requires investors to "pour" more capital than when investing in areas where infrastructure is already available. The fact that the State has an investment incentive policy in these areas is to create a balance in investment conditions between the regions, encouraging investors to invest in these areas to create economic development evenly.

Fourthly, the State encourages investment in industrial parks, export processing zones, high-tech zones and economic zones for two main reasons: One is, the concentration of businesses and investors in one area will be easier to manage; Two is, industry plays a key role in the economy, but parallel with its development is a huge impact on the natural environment. Directing businesses and investors to separate industrial parks, export processing zones, high-tech zones and economic zones will minimize its impact on the environment and people's lives.

In short, the State has created policies for business lines and areas eligible for investment incentives to create a balance that inherently the actual conditions to conduct investment are somewhat limited than other industries, occupations and locations.

Thuy Tram

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