I. General Provisions on Incentives for Foreign Investors in Vietnam

Vietnam’s Investment Law 2020 clearly outlines the incentives available to foreign investors, aiming to attract investment and promote economic development. According to the law, foreign investors can enjoy tax incentives, including preferential corporate income tax rates and exemptions or reductions for a specific period. These incentives apply to prioritized investment sectors, such as high technology, research and development, or other industries encouraged by the State.

Additionally, the Investment Law 2020 provides land-related incentives, allowing investors to receive exemptions or reductions in land rental fees during the initial stages of a project or throughout its operation. Projects located in socio-economically disadvantaged areas or industrial zones are eligible for specific incentives to reduce investment costs and foster development in these regions.

The law also protects foreign investors’ rights, clearly defining ownership rights, profit repatriation, and measures to safeguard investments from administrative decisions by the State. These provisions ensure not only a favorable investment environment but also affirm Vietnam’s commitment to protecting the legitimate rights of foreign investors.

II. Forms of Investment Incentives

The Investment Law 2020 stipulates several forms of incentives to encourage projects in priority sectors and regions, including:

Corporate Income Tax Incentives: Investors may benefit from reduced corporate income tax rates compared to the standard rate, either for a defined period or throughout the project’s implementation. In addition, businesses can enjoy tax exemptions, reductions, and other benefits as per the corporate income tax regulations.

Import Duty Exemptions: Import duties may be waived for goods used to create fixed assets, including machinery, equipment, and technologies essential for production. Materials, supplies, and components imported for production may also be exempt from taxes, facilitating cost reduction and improving production efficiency.

Land Use and Rental Incentives: Exemptions or reductions in land use fees, land rental fees, and land use taxes are offered for projects in priority development areas or economically disadvantaged regions.

Accelerated Depreciation and Deductible Expenses: Businesses may apply accelerated depreciation methods for fixed assets, reducing asset value over a shorter period and lowering taxable income. Investors can also increase deductible expenses when calculating taxable income, optimizing profitability and enabling reinvestment into new projects.

These incentives aim to create an attractive and competitive investment environment for foreign investors in Vietnam.

III. Additional Support for Foreign Investors

Beyond tax and land incentives, foreign investors receive support in accessing credit with preferential interest rates, particularly for projects using loans in priority development sectors. Easier access to low-cost funding reduces financial burdens during the project’s initial stages. Moreover, investors are supported in workforce training and recruitment to ensure access to a skilled labor pool, meeting technical and professional requirements for project success.

IV. Eligible Beneficiaries of Investment Incentives

Foreign investors may qualify for investment incentives if:

• Projects Belong to Prioritized Sectors: These include industries such as high technology, new material production, and waste collection and treatment. Such sectors utilize advanced technologies, contribute to sustainable development, and protect the environment.
• Projects Located in Priority Regions: Projects in socio-economically disadvantaged areas, including industrial zones, export-processing zones, and high-tech zones, are eligible for various government incentives. Investments in these areas promote local economic development while offering tax and other benefits.
• Large-Scale Projects: Projects with a total investment capital of 6,000 billion VND or more, meeting minimum revenue or employment criteria, are entitled to special incentives to ensure their sustainability and long-term growth.
• Social Housing, Rural Development, and Inclusive Employment Projects: Projects such as social housing construction, rural investments, and initiatives employing disabled workers also qualify for incentives. These projects not only enhance social welfare but also improve human resources in underdeveloped areas.
• High-Tech and R&D Enterprises: High-tech enterprises, scientific and technological organizations, and projects focused on technology transfer, business incubation, or environmental protection are encouraged with specific incentives.
• Innovation and Entrepreneurship: Foreign investors in innovative startups, innovation centers, and research and development hubs are supported to build a dynamic business environment in Vietnam.
• Supply Chain Integration: Investments in the distribution chains of small and medium-sized enterprises (SMEs), as well as incubation facilities for SMEs, are incentivized to promote SME growth and integration into global supply chains.

V. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

The goal of the legal services provided by HANKUK LAW FIRM is to support businesses, investors, and people. Our organization employs skilled Korean lawyers, partners, and professionals to provide legal services to businesses related to corporations and litigation.

To support the startup process, our lawyers and staff provide a wide range of services, including business law consulting, tax and immigration law consulting, real estate services, business consulting, marketing and communications, human resources, product distribution, franchise options, etc. We provide expert advice on every aspect of your business needs.

To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.

■ Contact us now

For reliable and effective legal advice, please contact HANKUK LAW FIRM now. We are committed to providing you with the best possible answers and our team of experienced lawyers has extensive knowledge in many legal fields. We are always here to provide the most competent and dedicated support, whether you are dealing with contractual issues, commercial disputes or need guidance on foreign investment. HANKUK LAW FIRM is honored to have assisted hundreds of domestic and international clients in skillfully resolving complex legal issues as their trusted legal partner. Do not let legal issues hinder your success. Let us accompany you towards legal achievement and comfort. For prompt guidance and support to ensure your rights are always maintained at the highest standards, contact HANKUK LAW FIRM now.

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