WHAT INCENTIVES CAN FOREIGN INVESTORS RECEIVE IF INVESTING IN VIETNAM?

Legal basis:

– Law on Investment 2020.

Vietnam is considered one of the potential investment environments that many foreign investors are aiming for. Therefore, the Vietnamese Government has created many preferential investment policies for foreign investors to bring the Vietnamese economy to the international market.

1. Forms of investment incentives

– Corporate income tax incentives, including application of a lower rate of corporate income tax for a certain period of time or throughout the investment project execution; exemption from and reduction of tax and other incentives prescribed by the Law on Corporate Income Tax.

– Exemption from import tax on goods imported to form fixed assets; raw materials, supplies and components for manufacturing purposes in accordance with regulations of law on import and export tax;

– Exemption from and reduction of land levy and land rents;

– Accelerated depreciation, increasing the deductible expenses upon calculation of taxable income.

2. Entities eligible for investment incentives

Foreign investors can receive incentives when they invest in such projects:

– Investment projects in business lines eligible for investment incentives: Hi-tech activities; Manufacturing of new materials; Collection, treatment, recycling or re-use of waste;…

– Investment projects located in the areas eligible for investment incentives: Disadvantaged areas and extremely disadvantaged areas; Industrial parks, export-processing zones, hi-tech zones and economic zones.

– Any investment project whose capital is at least VND 6.000 billion of which at least VND 6.000 billion of is disbursed within 03 years from the issuance date of the investment registration certificate or the approval for investment guidelines and which satisfies any of the following criteria: the total revenue is at least VND 10.000 billion per year within 03 years from the year in which the revenue is earned or the project has more than 3.000 employees;

– Social housing construction projects; investment projects located in rural areas and employing at least 500 employees; investment projects that employ persons with disabilities in accordance with regulations of law on persons with disabilities;

– Hi-technology enterprises, science and technology enterprises and science and technology organizations; projects involving transfer of technologies; science and technology enterprise incubators; enterprises manufacturing and providing technologies, equipment, products and services with a view to satisfaction of environment protection requirements n;

– Start-up projects, national innovation centers and research and development centers;

– Business investment in small and medium-sized enterprises’ product distribution chain; business investment in technical establishments supporting small and medium-sized enterprises, small and medium-sized enterprise incubators; business investment in coworking spaces serving small and medium-sized enterprises and startups.

Generally, the Vietnamese market has many attractive investment policies to attract foreign investment. Foreign investors should grasp these preferential policies to seek profits in the most effective way.