Viet Nam - A Guide for Business and Investment - asean-korea centre

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PART III. BUSINESS AND FOREIGN INVESTMENT ENVIRONMENTcontract so that the investor can recover capital andreasonable profits.Under the BT form, the project is transferred to theState on completion of construction and the Statepays the investor by way of the right to implementanother project or making payment as agreed in theBT contract.According to the most recent draft of the new BOT Decree(“Draft BOT Decree”), the Government of Vietnamwill encourage investors of both public and privatesectors to participate in BOT, BTO and BT projects (i)for construction, operation of brand new, renovated orexpanded infrastructure facilities, and (ii) for modernisation,operation and management of existing projectworks listed below:• Roads, bridges, tunnels, and other associated utilities;• Railway and tramp-way;• Airports, sea-ports, river-ports, and ferries;• Water supply plants, waste sewerage and treatmentsystems;• Power plants, power transmission lines; and• Other projects as may be decided by the PrimeMinister.Preferential treatments for BOT, BTO, BT projects• Corporate Income Tax (CIT): Under the laws currentlyin force in Vietnam, BOT, BT and BT Enterprisesare (i) entitled to an applicable CIT rate of10% for the whole term of their projects, (ii) a CITexemption for 4 years as from the first profit-makingyear; and (iii) a 50% CIT reduction for subsequent9 years. Questionably, under the Draft BOTDecree, these incentives are not made available toBT Enterprises.• Import Duties: BOT, BTO and BT Enterprises andtheir sub-contractors may be entitled to importduty exemptions for the purpose of project implementationin accordance with the laws on importduties.• Industrial property objects which are under protectionduration, know-how, technological processand technical assistance for the project implementationmay be exempted from all types of tax applicableto technology transfer and revenue earnedfrom royalties.• Land Use:o BOT, BTO and BT Enterprises are exempted from paymentof land use fees for the land area allocated tothem by the State (in the case of land allocation), orThe North Thang Long Industrial Zone - Hanoi32 Viet Nam - A Guide for Business and Investment
exempted from payment of land rental (in the case ofleasing land) for the whole span of their projects.“EPZ Enterprises”, respectively) are granted with thefollowing preferential treatments:o During the term of the projects, the BOT, BTO and BTenterprises are, subject to approval of the competentState bodies, permitted to pledge or mortgage assetsand land use rights (“LURs”) in accordance with thelaws on land of Vietnam.Government Guarantee Undertaking: The Governmentof Vietnam will, depending on the nature of each ofBOT, BTO and BT projects, appoint an authorised bodyto issue, on behalf of the Government, guarantees forloans, provision of raw materials, consumption of products,and any other contractual obligations in favourof the investors, the BOT, BTO and BT Enterprises, andother enterprise participating in these projects if aGovernment guarantee undertaking is required underthe relevant BOT, BTO or BT contract.Industrial Zones/ Export Processing Zones/HighTech Zones (“Industrial Zones”) /Economic ZonesIn 1991 the Vietnamese Government introduced a policyto develop these special administrative zones in aneffort to geographically diversify investment locations,to accelerate export, and to create more jobs.Industrial Zone & Export Processing ZoneIndustrial Zone (“IZ”) is a zone in which enterprisesspecialising in the production of industrial goods andthe provision of services for industrial production areconcentrated.Export Processing Zone (“EPZ”) is an industrial zonespecialising in the production of goods for exports andthe provision of services for such production and exportactivities.Investment in IZs and EPZs is generally regulated byDecree No. 108/2006/ND-CP of the Government dated22 September 2006 implementing the Law on Investment(“Decree 108”).Developers of IZs and EPZs and iinvestors operatingand doing business in these zones (collectively referredto herein as “IZs Developers” and “IZ Enterprises” and• Corporate Income Tax (“CIT”):Depending on certain criteria, investment in IZ/EPZwill be entitled to 10%, 15%, or 20% CIT rate, andup to 4 years of CIT exemption from the first profitmakingyear, and 9 years of 50% reduction of theCIT rate from the subsequent year;• Import Duties and Value Added Tax: IZ Developers,IZ Enterprises and EPZs Enterprises may be exemptedfrom payment of import duties and valueadded tax on goods imported for the purposes ofestablishment and implementation of their investmentprojects.• Land Use:Incentives include preferential land rental rate, exemptionfrom payment of land use fees for the landarea allocated to the investor by the State , or exemptedfrom payment of land rental (in the case ofleasing land) for the whole span of their projects.o Where IZ Developers, IZ Enterprises and EPZ Enterprisespay their land rental on an annual basis, theyhave the rights to (i) mortgage or use as guarantee assetsattached to land, (ii) sell or contribute as capitalassets attached to land, (iii) sell or lease out factories,offices and warehouse built in the IZ; and (iv) sub-leasethe land area on which infrastructure facilities havebeen completed (please note that the right mentionedin (iv) is only applicable to IZ Developers). Those IZDevelopers, IZ Enterprises and EPZ Enterprises whopay the land rental for the entire term of their leaseone-off, are entitled to additional rights. In particular,during the term of their land lease or sub-lease, theyare permitted to (i) assign the value of their LURsProduction line of a motor part in Tan Thuan Export Processing Zone- Ho Chi Minh cityViet Nam - A Guide for Business and Investment 33PART III. BUSINESS AND FOREIGN INVESTMENT ENVIRONMENT
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Page 4 and 5: Viet Nam - A Guide for Business and
Page 6 and 7: PART V. INVESTMENT COSTS IN VIET NA
Page 8 and 9: PART I. VIET NAM: COUNTRY AND PEOPL
Page 16 and 17: Production of Electronic parts of H
Page 18 and 19: PART II. THE ECONOMYThe industrial
Page 20 and 21: PART II. THE ECONOMYExport, Import
Page 22 and 23: PART II. THE ECONOMY4. Official Dev
Page 24 and 25: PART II. THE ECONOMYFDI Distributio
Page 26 and 27: The center of Hanoi CapitalPART III
Page 28 and 29: PART III. BUSINESS AND FOREIGN INVE
Page 46 and 47: Ground Breaking Ceremony of Saigon
Page 48 and 49: PART IV. INVESTMENT PROCEDURE3. Lic
Page 50 and 51: PART IV. INVESTMENT PROCEDUREFDI pr
Page 52 and 53: Song Than Industrial Zone in Binh D
Page 54 and 55: PART V. INVESTMENT COSTS IN VIETNAM
Page 56 and 57: PART V. INVESTMENT COSTS IN VIETNAM
Page 58 and 59: APPENDIX Imediately 100% (for examp
Page 60 and 61: Labour11 Labour Code dated 23/6/199
Page 62 and 63: Real Estate Business34Law No. 63/20
Page 64 and 65: APPENDIX IIIV. Construction and dev
Page 66 and 67: APPENDIX IIIstruction of private an
Page 68 and 69: 14 Yen Bai Luc Yen, Mu Cang Chai an
Page 70 and 71: 52 Bac Lieu All districts Bac Lieu
Page 72 and 73: APPENDIX VIUseful contacts and addr
Page 74 and 75: APPENDIX VIHoa Binh DPINo. 3 Tran H
Page 76 and 77: Dak Lak DPINo. 17 Le Duan str, Buon
Page 78 and 79: Bac Giang IZs MBNo 48 Ngo Gia Tu st
Page 80 and 81: Vietnam - Singapore IZs MBNo. 8 Huy
Page 82 and 83:
Germany, 29 Tran Phu St., HanoiTel:
Page 84 and 85:
KPMG in VietnamHanoiHo Chi Minh Cit
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