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Kien Giang - Investment incentive policies

INVESTMENT INCENTIVE POLICIES

A. LIST OF INVESTMENT INCENTIVE SECTORS AND INVESTMENT

INCENTIVE AREAS

B. INVESTMENT INCENTIVE POLICIES

INVESTMENT INCENTIVE POLICIES

A. LIST OF INVESTMENT INCENTIVE SECTORS AND INVESTMENT

INCENTIVE AREAS

I. List of investment incentive sectors: (Appendix I, issued in attachment with

Decree No. 118/2015/ND-CP dated 12/11/2015).

a) Special investment incentive sectors

1. Production of supporting industrial products according to decisions of the

Prime Minister.

2. Production of renewable energy, clean energy, energy from waste disposal.

3. Production of composite materials, light construction materials and rare and

precious materials.

4. Planting, tending, nurturing, protecting and developing forests.

5. Farming, processing and preserving agricultural, forestry and aquatic products.

6. Production, multiplication and hybridization of plant varieties, livestock breeds,

forestry tree seeds and aquatic breeds.

7. Off-shore fishing combined with application of advanced fishing methods and

tools; Fishery logistic services; constructing ship-building facilities.

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8. Construction and trading of infrastructure of industrial zones, export-processing

zones, hi-tech parks and functional areas in economic zones.

9. Investment in the development of water plants, power plants, water supply and

drainage systems; Bridge, road, railway; aviation port, seaport, river port;

airports, railway stations and other infrastructure works of special importance as

decided by the Prime Minister.

10. Development of public passenger transportation in urban areas.

11. Investment in construction, management and operation of markets in rural

areas.

12. Construction of social housing, resettlement areas.

13. Collection, treatment, recycling and reuse of concentrated waste.

....

b) Investment incentive sectors

1. Production of products on the list of key mechanical products under the Prime

Minister’s decisions.

2. Production of energy-saving products.

3. Production of products with a value added of 30% or more (according to the

guidance of the Ministry of Planning and Investment).

4. Production of machinery tools, machines, equipment, spare parts, machines for

agricultural, forestry, fishery, salt production, food processing machines and

irrigation equipment which are not listed in the list of sectors with special

investment preferences.

5. Production and refining of feed for animal, poultry and aquatic products.

6. New construction, renovation and upgrading of slaughter facilities; preservation

and processing of centralized poultry and cattle industry.

7. Construction and development of centralized raw material areas to serve for

processing industry.

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8. Seafood exploitation.

9. Construction and development of infrastructure for industrial clusters.

10. Construction of apartment buildings for workers in industrial zones, export

processing zones, hi-tech parks and economic zones; construction of student

dormitories and dwelling houses for social policy beneficiaries; investment in the

construction of functional urban centers (including kindergartens, schools,

hospitals) for workers.

11. Investment in trade fair centers, logistics centers, warehouses, supermarkets,

trading centers.

12. Investment in construction of cemeteries, cremation services, electrical

cremation services.

II. List of investment incentive locations: (Appendix II, issued in attachment with

Decree No. 118/2015/ND-CP dated 12/11/2015).

1. Locations with specially-difficult socio-economic conditions including districts

of Kien Luong, Hon Dat, Tan Hiep, Chau Thanh, Giong Rieng, Go Guao, An Bien,

An Minh, Vinh Thuan, Kien Hai, U Minh Thuong, Giang Thanh, Phu Quoc and Ha

Tien Town.

2. Locations with difficult socio-economic conditions: Rach Gia City.

B. INVESTMENT INCENTIVE POLICIES

I. INDUSTRIAL ZONES (IZs)

Incentive Policies

Contents

1. Preferences on land leasing fee

1.1. Exempting the land leasing fee for the whole land leasing duration

For investment projects in the list of sectors, industries with special investment

preferences according to the regulations of the law.

1.2. Exempting the land leasing fee for basic construction duration

For not exceeding 3 years from the date of having decision on land leasing

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1.3. Exempting the land leasing fee

- Exempting the leasing fee of land, water surface for the whole leasing duration

for projects in the list of sectors with special investment preferences;

- 15 (fifteen) years for projects in the list of investment preference sectors;

- 11 (eleven) years for the remaining projects.

2. Preferences on tax rate, corporation income tax

2.1. To have corporation income tax exempted according to the regulations of the

law on tax

Income of enterprises from new investment projects in agricultural, aquatic product

processing sectors.

2.2. Preferential tax rate of 10% applied for 15 years

Income of enterprises from implementing the new investment projects shall be

given with the preferential corporation income tax rate.

2.3. Tax exemption for 04 years and reduction of 50% of tax for the next 09 years.

Income of enterprises implementing new projects shall be given with preferential

corporation income tax rate.

3. Preferences on import tax

3.1. Exemption of import tax

For import goods to create fixed assets of the project according to the regulations

of law on investment.

4. Support for labor training

4.1. Maximum support of 03 million VND/person/training course

Rural labor shall be supported for short-term vocational training cost (preliminary

vocational training and vocational training for less than 3 months).

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II. SUPPORT FOR EXPORT AGRICULTURAL, AQUATIC PRODUCT

PROCESSING INDUSTRY

Conditions for receiving support

- New investment projects, expansion, changes of advanced technologies, modern

equipments;...

- Project investments must have advanced, modern, energy-saving and

environmentally-friendly technologies.

List of projects with investment priorities, encouragements

- Processing rice for export; processing vegetables, fruits and vegetables for

export; processing canned fruits; processing starch.

- Processing frozen aquatic products for export; canned products of all kinds;

processing dry products for export.

Support duration and limitation

- Interest support duration for 3 (three) years from the date that the project is

completed and put into official operation.

- Support of 50% of interest in the first year; 40% of interest for second year; 30%

of interest for third year.

- Loan support limit at maximum shall not exceed 50 billion VND/project.

- Supporting policies will be provided until 2020.

III. PREFERENCES ON TAX

Preferential tax rate

Contents

1. Corporation income tax preferences

1.1. Preferential tax rate

a) Preferential tax rate of 10% for 15 (fifteen) years.

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- Income from implementing new investment projects in areas with especially-

difficult socio-economic conditions; economic zones established under the

Decision of the Prime Minister.

- Income from implementing new investment projects in the fields of: Scientific

research and technology development; high technology applications given with

priorities for development and investment; environmental protection; production of

products in the list of industrial products given with priorities for development;....

b) Preferential tax rate of 17% for 10 (ten) years.

- Income from implementing new investment projects in locations with difficult

socio-economic conditions.

- Income from implementing new investment projects: high-ranking steel

production; energy-saving product production; production and processing of feed

for poultries, livestock, aquatic products etc.

c) Preferential tax rate of 10% during operation duration

- Income from socialization activities in education-training, vocational training,

health, culture, sports and environment.

- Income from implementing social housing investment-trading products for

selling, leasing to objects as regulated in Article 53 of Housing Law.

- Income from planting, tending and protecting forests; Income from cultivation,

husbandry, production and processing of agricultural, aquatic products in locations

with difficult socio-economic conditions etc.

d) Time for applying the preferential tax rate

To be calculated continuously from the first year that the enterprise has income

from new investment project that receives the tax preferences.

1.2. Preferences on time for tax exemption, tax reduction

a) Tax exemption for four years, tax reduction of 50% for the next nine years.

- Corporation income from implementing investment project as regulated in point

a, part 1.1 above.

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- Corporation income from implementing new investment project in socialization

sector in locations with difficult or especially-difficult socio-economic conditions.

b) Tax exemption for two years, tax reduction of 50% for the next four years.

Corporation income from implementing new investment project as regulated in

point b, part 1.1 mentioned above and corporation income from implementing new

investments into industrial zone (except industrial zone located in location with

favourable socio-economic conditions).

c) Duration for tax exemption, tax reduction

To be calculated continuously from the first year that the enterprise has income

from new investment project that receives the tax preferences.

2. Import tax, export tax

Goods imported for creating fixed assets of the project with investment

encouragement shall have import tax exempted.

IV. PREFERENCES ON LAND

Supporting policies

Contents

1. Unit price for land rental, unit price for hiring land for constructing underground

works and unit price for hiring water surface.

1.1.Land rental unit price (Including land with coastal surface within the scope of

1,000 meters from existing shore forward).

a)

- Locations with difficult socio-economic conditions (except industrial zones,

industrial complexes), land rental price for:

+ Market land: 1.5%;

+ Commercial, service land: 1.25%;

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+ Land for non-agricultural business and production: 1% (which is not market land

and commercial, service land) .

- Locations with especially-difficult socio-economic conditions and industrial

zones, industrial complexes, then the land rental price is as follows:

+ Market land: 1.25%;

+ Commercial, service land: 1.0%;

+ Land for non-agricultural production and business: 0.75% (which is not market

land and commercial, service land) .

Non-agricultural land group

b)

- For locations with difficult socio-economic conditions, the land rental price is

0.75% (except industrial zones, industrial complexes);

- For locations with especially-difficult socio-economic conditions and industrial

complexes, industrial zones, the land rental price is 0.5%.

Agricultural land group

1.2. Unit price for hiring land for constructing underground works.

a)

- For annual payment of land rental price, the land rental price shall be defined of

15% of land rental unit price for space with annual rental price payment for the

same using purpose;

- For one-time payment of land rental price, the land rental price shall be defined

of 15% of land rental unit price for space with one-time payment method of land

rental price for the whole rental duration for the same using purpose and land using

duration.

Land rental for constructing underground works (which are not underground parts

of works constructed on ground).

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b)

Land rental amount to be paid for the exceeding area shall be according to the

regulations for land leased by the State for constructing underground works (which

are not underground parts of works constructed on ground).

Land rental for constructing underground works which are closely linked to

underground part of the works constructed on ground

1.3. Rental unit price for water surface

- For projects using fixed water surface: VND 30/m2/year;

- For projects using unfixed water surface: VND 100/m2/year.

Water surface rental unit price (including land with coastal water surface

exceeding the scope of 1,000 m from existing coast forward).

1.4. Modified duration

Modification of land rental unit price, water surface rental unit price is for a stable

duration of 05 years.

2. Exemption of land rental price, water surface rental price

2.1. Exemption of land rental price, water surface rental price for the whole rental

duration.

- Investment projects in sectors with special investment preferences invested in

locations with especially-difficult socio-economic conditions;

- Projects using the land fund to construct the houses for workers of industrial

parks;

- Land for constructing water supply works; land for constructing infrastructure to

be shared in industrial park, industrial cluster etc;...

2.2.Exemption of land rental price, water surface rental price for basic construction

duration

At maximum, not exceeding 3 years since the date of having decision on leasing

land, water surface.

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2.3. Exemption of land rental price, water surface rental price after duration with

land rental price, water surface rental price exemption in basic construction

duration.

- 3 (three) years for projects in the List of sectors with investment preferences; for

new production and business facilities of economic organizations to be dislocated

according to the plan, dislocated due to environmental pollution;

- 7 (seven) years for projects invested into locations with difficult socio-economic

conditions;

- 11 (eleven) years for projects invested in locations with especially-difficult socio-

economic conditions; projects in the list of sectors with special investment

preferences; projects in the list of sectors with investment preferences invested in

locations with difficult socio-economic conditions;

- 15 (fifteen) years for projects in the List of sectors with investment preferences

invested in locations with especially-difficult socio-economic conditions; projects

in the list of sectors with special investment preferences invested in locations with

difficult socio-economic conditions.

V. POLICIES ENCOURAGING ENTERPRISES TO INVEST INTO

AGRICULTURE AND RURAL DEVELOPMENT

Incentive policies

Contents

I. PREFERENCES ON LAND

1. Exemption, reduction of land use

1.1. Exemption of land use fee

Investor having agricultural project with special investment preferences if having

land handed over by the state.

1.2. Reduction of 70% of land use fee to be paid to State Budget.

Investor having agricultural project with investment preferences if having land

handed over by the state.

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1.3. Reduction of 50% of land use fee to be paid to State Budget.

Investor having agricultural project with investment encouragements if having land

handed over by the state.

2. Exemption, reduction of land rental fee, water surface rental fee

2.1. Being entitled to rent with lowest price according to the land rental price frame

regulated by Provincial People’s Committee.

Investor having agricultural project with investment preferences, agricultural

project with investment encouragement if hiring land, water surface from the State.

2.2. Exemption of land rental fee, water surface rental fee from the date of

construction completion to put the project into operation

Investor having agricultural project with special investment preferences.

2.3. Exemption of land rental fee, water surface rental fee for 15 years since the

construction completion date to put the project into operation.

Investor having agricultural project with investment preferences.

2.4. Exemption of land rental fee, water surface rental fee for 11 years since the

construction completion date to put the project into operation.

Investor having agricultural project with investment encouragements.

3. Support for hiring land, water surface

3.1. Support of 20% of land, water surface rental fee according to the land, water

surface price frame issued by local government for the first 5 years from the date

of basic construction completion.

Investor having agricultural project with special investment preferences if hiring

land, water surface from households, individuals to carry out investment project.

Capital contribution by land use right for projects without land recovery.

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Encouraging enterprise having agricultural project with special investment

preferences, agricultural project with investment preferences, agricultural project

with investment encouragement to accumulate land to form material zone through

household, individual form.

4. Land use fee exemption, reduction when changing land use purpose

4.1. Exemption of land use fee when changing the land use purpose to implement

the project.

The investor having agricultural project with special investment preferences

located in the plan approved by the State competent authority.

4.2. Reduction of 50% of land use fee when changing the land use purpose to

implement the project.

The investor having agricultural project with investment preferences located in the

plan approved by the State competent authority.

II. INVESTMENT SUPPORT

1. Support in human resource training, market development and application of

science and technology

1.1. Support of 70% of domestic vocational training cost

- Each labor shall be supported for one time for training course and training

duration for receiving support shall not exceed 6 months.

- In case the investor employs full-time labour who has not had vocational training

and is living in specialized forest for training and employing shall be supported for

direct training cost for one time at the enterprise with the amount of 3 million

VND/3 months/labour.

1.2

- Supporting 50% of enterprise cost for enterprise and product on means of media;

- Supporting 50% of cost for participating in domestic fairs, exhibitions;

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- Reducing 50% of costs for accessing market information and service fee from

trade promotion agencies of the State.

Supporting for costs for advertisement, participation of domestic fairs, exhibitions,

accessing market information and service cost.

1.3

- Supporting 70% of costs for implementing the research project to create new

technology.

- Supporting 30% of cost for new investment to implement trial production project.

Supporting cost for implementing research topics; new investments for

implementing trial production project.

1.4

Total support amount for one project shall not exceed 10% of total investment

capital of project and shall not exceed 1 billion VND.

Supports shall be provided according to the investment project.

2. Support for investment and aquaculture of seafood on sea

Conditions for receiving supports

Support limitation

- Located in the plan approved by the state competent authority or approved for

investment by provincial people’s committee if such plan has not yet been

approved.

- Project with scale of at least 5 ha or more than 10 cages of more than 100

m3/cage or more.

- Ensuring requirements on environmental protection according to the regulations

of law on environmental protection.

- The investor is required to use at least 30% of local labour.

- Support of 100 million VND for 100 m3 of aquaculture cage;

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- Support of 40 million VND for 100 m3 of cage.

3. Investment support for facilities to dry rice, maize, potato, cassava, aquatic by-

products, coffee processing

Conditions for support

Support limitation

- Capacity of rice, maize, potato, cassava drying facilities must reach at least 150

tons of product/day; and the capacity of aquatic by-product drying must be at least

50 tons of product/day; coffee processing following wet method must reach at least

5,000 tons of product/year.

- Project located in the plan approved by the state competent authority or approved

for investment by provincial people’s committee if such plan has not yet been

approved.

- Ensuring requirements on environmental protection according to the regulations

of law on environmental protection.

- The investor is required to use at least 30% of local labour and 60% of local rice,

maize, potato, cassava, aquatic by-product material.

- Supporting 2 billion VND/project for rice, maize, potato, cassava drying; aquatic

by-product drying for constructing infrastructure in terms of traffic, power, water,

workshop and equipment purchasing.

- Supporting 3 billion VND/project of coffee processing following wet method for

constructing infrastructure in terms of traffic, power, water, workshop, solid waste

treatment and equipment purchasing.

VI. MECHANISM FOR SUPPORTS, INVESTMENT PREFERENCES FOR

HOUSE CONSTRUCTION

Incentive policies

Contents

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1. Exemption of land use fee, land rental fee

To be exempted from land use fee, land rental fee.

For the land area handed over, leased by the state, including land fund for

constructing commercial trading works approved by the competent authorities

within the scope of social housing construction project.

2. Exemption, reduction of VAT, Corporation Income Tax

Reduction of 70% of VAT rate, corporation income tax rate.

In case of investing in constructing social housing project for lease only.

3. Borrowing investment preference capital

Entitled to borrow investment preference capital for the minimum duration of 15

years and not exceeding 20 years.

In case of investing in constructing social housing project for lease only.

3.2. Lending Limit

- Maximum lending limit of 80% of total investment capital of project or

borrowing method and not exceeding 80% of guarantee asset value for the loan;

- Maximum lending limit of 70% of total investment capital of project or

borrowing method and not exceeding 70% of guarantee asset value for the loan.

- For constructing social housing project for lease only.

- For constructing social housing project selling.

3.3. Lending duration

- Minimum lending duration is 15 years and not exceeding 20 years from the date

of first disbursement.

- Minimum lending duration is 10 years and not exceeding 15 years from the date

of first disbursement.

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- Minimum lending duration is 05 years and not exceeding 10 years from the date

of first disbursement.

- For constructing social housing project for lease only.

- For constructing social housing project for lease and sale.

- For constructing social housing project for sale.

VII. INCENTIVE, SUPPORT POLICIES FOR ENVIRONMENTAL

PROTECTION ACTIVITIES

Incentive Policies

Contents

I. PREFERENCES, SUPPORTS IN INFRASTRUCTURE AND LAND

1. Support in investing and constructing infrastructure works

State supports the investment and construction of works, components of technical

infrastructure works (traffic road, power, water supply, drainage) out of scope of

project to connect with the combined technical infrastructure system in the region.

2. Preferences on land use fee, land rental fee

2.1. Exemption of land use fee, land rental fee

Land area used for constructing environmental protection works shall be given

with special preferences, supports for constructing centralized domestic wastewater

treatment system; solid waste treatment; waste treatment etc.

2.2. Reduction of 50% of land use fee, land rental fee and entitled to delay in

payment of land use fee, land rental fee but delayed time must not exceed 5 years

from the land handover date.

The land area used for constructing the environmental protection works shall be

given with preferences, supports for constructing the environmental protection

infrastructure system in traditional trade industrial areas, clusters; constructing

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vocational training centre for training environmental protection human resources

etc.

II. PREFERENCES, SUPPORTS IN TAX, CHARGES

1. Preferences on corporation income tax

Enterprise operating in environmental protection, technology transfer to serve for

solid waste treatment, environmentally-friend technology; import of machines,

equipment, means, materials directly used for collection, storage, transportation,

recycling, treatment of solid waste; centralized domestic wastewater treatment;

clean energy, renewable energy production; etc.

2. Preferences on import tax, export tax

2.1. Exemption of import tax.

Machines, equipment, means, tools, materials imported for collection, storage,

transportation, recycling, treatment of solid waste and also applied for cases of

project scale expansion, replacement and innovation of technology.

2.2. Exemption of export tax.

Products from solid waste recycling activities; energy collected from solid waste

disposal etc. if for export.

3. Exemption of environmental protection fee

Enterprise that implements the environmental protection project with special

preferences, supports for hazardous solid waste; treatment and improvement of

storage lake; etc. and shall be given with preferences, support for centralized

domestic wastewater treatment; production of clean energy, renewable energy; etc.

VIII. OTHER INVESTMENT INCENTIVE POLICIES

1. Reducing 50% of income tax for people with taxable income, including

Vietnamese and foreigners who are working in economic zones.

2. Cost for investment, construction, operation or leasing apartments and social

infrastructure structure works to serve for workers working at industrial zones,

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economic zones is reasonable cost deducted for calculating taxable income of

enterprise with investment project in industrial zones, economic zones.

3. Foreigners and Vietnamese people settled in foreign country who work, invest

and do business in Phu Quoc and their family members shall be granted with visa

with validity for many times and time suitable for working duration in economic

zones; entitled for definite residence, temporary residence.

4. Given with priorities by the State to borrow capital for investing or given with

support in interest rate after investment, guarantee for receiving investment credit

from investment credit capital of the State.