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

• Credit Assistance: The Development AssistanceFund of Vietnam is ready to extend medium orlong-term credits with soft interest rates, and issueloan guarantees to Vietnamese manufacturers inHTZs. In addition, all investors directly exportingtheir products may be entitled to an export creditassistance and export award.• Additional incentives may be granted to the investorsin “especially important projects”.Economic ZoneAn Economic Zone is a zone which has an economicarea separated from the general investment and businessenvironment and with especially favourable conditionsfor investors.An Economic Zone (“EZ”) is an identified geographicalzone with privileges on investment environment, preferentialstable policies, flexible management, givingbest condition to business activities of the domesticand foreign investor.Investment in EZs is currently regulated by Decree108.Developers of EZs and investors operating and doingbusiness in these zones (collectively referred to hereinas “EZs Developers” and “EZ Enterprises”) are grantedwith the following preferential treatments:• CIT:- EZ Developers and EZ Enterprises are entitled to(i) an applicable CIT rate of 10% of their annual taxableprofits for a term of 15 years as from the firstprofit-making year, (ii) an exemption from CIT for4 years from the first profit-making year, and a reductionof 50% of the CIT rate for a further 9 yearsfrom the 5th profit-making year.- A preferential CIT rate of 10% is applicable for thewhole term of a high-tech project, where:(i) the high- tech project satisfies the requirementsset out in Article 5.2 of Decree 99; and(ii) it is the large- scale project playing a significantrole in the commercial development and the socioeconomicdevelopment of the location.• PIT: A 50% PIT reduction may be granted to bothVietnamese and foreigner working in the EZ.• Import Duties and Value Added Tax: EZ Developersand EZ Enterprises are entitled, for a term of 55years as from their commencement of operation,to (i) an exemption from payment of import dutieson materials, equipment, components and semiproductswhich have not yet been produced domesticallyand which are required to be importedfor the purpose of production within the EZ.Import and export duties are not levied upon thefollowing imports and exports:(i) Goods imported from overseas to a non-tariffarea;(ii) Goods exported from a non- tariff area to overseas;(iii) Goods transferred from or sold by a non- tariffarea to an EPZ or any enterprise; and(iv) Goods not subject to export duty, with Vietnamorigin, and transported into a non- tariff area.• VAT: Goods produced and services provided innon- tariff areas, and goods imported and servicesprovided from overseas to non- tariff areas are exemptedfrom VAT.• Special Sales Tax (“SST”): Goods produced andservices provided in non- tariff areas, and goodsimported and services provided from overseas tonon- tariff areas are exempted from SST (exceptfor certain types goods or services).• Land Use:EZ Developers and EZ Enterprises are permitted to- Assign LURs, lease, sub- lease land on which infrastructurefacilities have been constructed;- Lease -or buy factories, offices and warehouses inthe EZ;- Lease land or to be allocated with land with orwithout payment of land use fee in order to constructand trade all or part of the infrastructure facilitiesin the EZ;Viet Nam - A Guide for Business and Investment 35PART III. BUSINESS AND FOREIGN INVESTMENT ENVIRONMENT