Which entities are eligible for investment incentives in Vietnam?

Forms for application of investment incentives in Vietnam

Pursuant to the provisions of Clause 1, Article 15 of the Law on Investment 2020, the forms and objects for application 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.

Which entities are eligible for investment incentives in Vietnam? (Internet image)

Which entities are eligible for investment incentives in Vietnam?

Pursuant to the provisions of Clause 2, Article 15 of the Law on Investment 2020 and Article 19 of Decree 31/2021/ND-CP, the entities eligible for investment incentives: include:

(1)  Investment projects in business lines eligible for investment incentives or business lines eligible for special investment incentives specified in Appendix II of Decree 31/2021/ND-CP.

(2) Investment projects located in disadvantaged or extremely disadvantaged areas specified in the Appendix III of Decree 31/2021/ND-CP.

(3) Any investment project whose capital is at least VND 6,000 billion eligible for investment incentives as prescribed in Point c Clause 2 Article 15 of the Law on Investment 2020 if the following conditions are met:

- At least VND 6,000 billion is disbursed within 03 years from the issuance date of the investment registration certificate or the decision on approval for both investment guidelines and investor (for the project not required to obtain the investment registration certificate) or the decision on investor approval (for the project not required to obtain the investment registration certificate);

- 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 an annual average number of at least 3,000 employees in accordance with regulations of law on labor 03 years within 03 years from the year in which the revenue is earned;

(4) The investment projects eligible for investment incentives specified in Point d Clause 2 Article 15 of the Law on Investment 2020 include:

- Projects on investment in construction of social housing in accordance with regulations of law on housing;

- Investment projects located in rural areas and employing at least 500 employees per year in accordance with regulations of law on labor (excluding employees who work on a part-time basis and employees who sign employment contracts with a fixed term of under 12 months);

- Investment projects employing persons with disabilities accounting for at least 30% of the annual average number of employees in accordance with regulations of law on persons with disabilities and on labor.

(5) 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; science and technology enterprise incubators;

Enterprises manufacturing and providing technologies, equipment, products and services with a view to satisfaction of environment protection requirements which are eligible for investment incentives as prescribed in Point dd Clause 2 Article 15 of the Law on Investment 2020 are enterprises, organizations, facilities and investment projects that satisfy the conditions prescribed by the law on science and technology;

High technology; technology transfer; environmental protection.

(6) Objects eligible for investment incentives specified in Point e Clause 2 Article 15 of the Law on Investment 2020 include:

- The National Innovation Center established under the Prime Minister's decision;

- Other innovation centers established by agencies, organizations and individuals so as to assist in executing start-up projects, establishing startups and promoting innovation, research and development in the centers which satisfy the conditions set forth in Clause 7 of Article 19 of Decree 31/2021/ND-CP;

- Start-up projects specified in Clause 8 of Article 19 of Decree 31/2021/ND-CP;

- Projects on establishment of research and development centers.

(7) An innovation center specified in Point b Clause 6 of Article 19 of Decree 31/2021/ND-CP will be eligible for investment incentives if it:

- Exercises the functions of supporting, developing and connecting startups with the startup ecosystem;

- Has several technical infrastructure items to serve the support, development and connection of the startup ecosystem, including laboratories, trial production and technology commercialization laboratories assisting enterprises in development of sample products;

Has infrastructure serving technical equipment installation to ensure one or more activities for enterprises to design, test, measure, analyze, inspect and test products, goods and materials; has information technology infrastructure assisting enterprises and space for organizing events, exhibiting and demonstrating start-up technologies and products;

- Has managerial professionals to provide assistance, development and connection services for enterprises operating in the center; has a network of experts and providers of assistance, development and connection services.

(8) The start-up project specified in Point c Clause 6 of Article 19 of Decree 31/2021/ND-CP is one of the following projects:

- Projects on manufacturing of products created from inventions, utility solutions, industrial designs, semiconductor integrated circuits layout-designs, computer software, applications on mobile phones, cloud computing; production of new livestock breed or line, new plant varieties, new aquatic breeds, new forest tree cultivars;

Technological advances which have been granted protection certificates in accordance with regulations of law on intellectual property or copyrights or international registration certificates in accordance with regulations of international treaties to which Vietnam is a signatory or recognized by competent authorities;

- Projects on manufacturing of products obtained from projects on trial production, sample products and technology completion; manufacturing of products given awards at start-up competitions, national start-up competitions, scientific and technological awards in accordance with regulations of law on scientific and technological awards;

- Projects of enterprises operating in innovation centers and research and development centers;

- Projects on manufacturing of culture industry products formed from copyrights or copyright-related rights that have been granted protection certificates in accordance with regulations of law on intellectual property or international registration certificates in accordance with regulations of international treaties to which Vietnam is a signatory.

(9) Small and medium-sized enterprises’ product distribution chain eligible for investment incentives as specified in Point g Clause 2 Article 15 of the Law on Investment 2020 means a network of intermediaries that distribute products of such small and medium-sized enterprises (SMEs) to consumers and meet the following conditions:

- At least 80% of enterprises joining the chain are small and medium-sized enterprises;

- There are at least 10 places for distribution of goods to consumers;

- At least 50% of revenue of the chain are generated by SMEs joining the chain.

(10) SME incubators; technical establishments supporting SMEs; co-working spaces supporting start-up SMEs eligible for investment incentives as specified in Point g Clause 2 Article 15 of the Law on Investment 2020 are those established in accordance with regulations of law on provision of assistance for SMEs.

Mai Thanh Loi

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