Financial - Commercial Policies Effective from Mid-February 2018

1. Lunch money for preschool children depends on the statutory pay rate

Decree 06/2018/ND-CP stipulates the policy of lunch support for preschool children in the following cases:

- Having parents or either parent or child caretakers or children residing permanently in extremely disadvantaged communes, ethnic minority regions, and mountainous areas, extremely disadvantaged coastal communes, and islands;- Having no source of support as specified in Clause 1, Article 5 of Decree 136/2013/ND-CP;- Being members of families classified as poor or near-poor households.

Children belonging to the above-mentioned categories are entitled to lunch support equivalent to 10% of the statutory pay rate per child per month.

The current statutory pay rate is 1.3 million VND/month, corresponding to 130,000 VND/month/child. As of July 1, 2018, the statutory pay rate increases to 1.39 million VND/month, thus, the lunch money for children also increases to 139,000 VND.

The support period for children is calculated according to the actual number of school months, but not exceeding 9 months per school year.

For more details, please refer to Decree 06/2018/ND-CP, which takes effect from February 20, 2018.

2. Increase support for building schools and hospitals in the Defense Economic Zone

Circular 02/2018/TT-BTC guides financial support mechanisms for the Defense Economic Zone issued by the Minister of Finance on January 2, 2018.

Defense enterprises involved in the construction of the Defense Economic Zone receive financial support as follows:

In the field of education:

- New construction of schools, purchase of tables, chairs, and teaching materials: Support not exceeding 200 million VND/class (currently not exceeding 100 million VND/class);- Replacement and supplementation of classrooms and teaching materials due to damage: Support not exceeding 30 million VND/class/year (currently not exceeding 10 million VND);

In the field of healthcare:

Initial investment and equipment for hospitals and clinics: Support not exceeding:

- 300 million VND/clinic with less than 10 beds;- 400 million VND/clinic with 10 to less than 20 beds;- 500 million VND/clinic with 20 or more beds.

(Current regulations generally support not exceeding 150 million VND/hospital).

For more details, refer to Circular 02/2018/TT-BTC, which takes effect from February 17, 2018, replacing Circular 97/2005/TT-BTC and Circular 126/2009/TT-BTC.

3. Conditions for foreign investors to contribute capital to logistics business

On December 30, 2017, the Government of Vietnam issued Decree 163/2017/ND-CP regulating logistics service business. Notably, regulations on logistics service business for foreign investors.

Apart from general conditions, foreign investors from WTO member countries or territories can contribute capital to logistics services business under the following conditions:

- In the case of freight transportation services (sea transport): Allowed to contribute capital, purchase shares, or invest in enterprises with a capital contribution ratio not exceeding 49%;- In the case of container handling services: Allowed to contribute capital, purchase shares with a capital contribution ratio not exceeding 50%;- In the case of customs clearance services: Allowed to contribute capital, purchase shares, or invest in enterprises but must have domestic investors’ capital contribution.

For more details, refer to Decree 163/2017/ND-CP, which takes effect from February 20, 2018, replacing Decree 140/2007/ND-CP.

4. Exemption of all land rent for investment projects in Da Nang High-Tech Park

This notable content is mentioned in Decree 04/2018/ND-CP on mechanisms and preferential policies for the Da Nang High-Tech Park.

The Government of Vietnam exempts all land rent for the entire project duration in the following cases:

- Land for building transportation and technical infrastructure works, green spaces, water surface land, and public parks as per general and subdivision planning approved;- Land for building non-business works of public non-business organizations;- Land for building high-tech workforce training facilities as per high-tech law regulations;- Land for implementing housing projects for experts and workers to rent while working at the High-Tech Park as per state-approved planning;- Projects under the list of specially encouraged investment sectors (excluding projects for building, trading High-Tech Park infrastructure).

Projects not in the above categories will enjoy land rent exemption and reduction for a certain period.

For more details on other preferential policies, please refer to Decree 04/2018/ND-CP, which takes effect from February 20, 2018.

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