There are 03 new regulations on investment incentive policies in Vietnam: Additional investment incentives; New regulations on entities eligible for investment incentives; More business lines eligible for investment incentives:
Additional investment incentives
Pursuant to Clause 1, Article 15 of the 2020 Investment Law, from January 1, 2021, the following investment incentives will be available:
- Corporate income tax incentives, including the application of corporate income tax rates lower than the normal tax rate for a period of time or the entire implementation period of the investment project; tax exemption, reduction and other incentives according to the provisions of the law on corporate income tax;
- Import tax exemption for goods imported to create fixed assets; raw materials, supplies and components imported for production in accordance with the law on import tax and export tax;
- Exemption or reduction of land use levy, land rent, land use tax;
- Rapid depreciation, increase in deductible expenses when calculating taxable income (currently not regulated this form).
New regulations on entities eligible for investment incentives
According to Clause 2, Article 15 of the 2020 Investment Law, beneficiaries of investment incentives from January 1, 2021 include:
- The investment project is in the industry or business subject to investment incentives according to regulations.
- Investment projects located in areas eligible for investment incentives according to regulations.
- Investment projects capitalized at VND 6,000 billion or more, disbursing at least VND 6,000 billion within 3 years from the date of being granted investment registration certificates or investment policy approval, concurrently has one of the following criteria: to have a minimum total turnover of VND 10,000 billion per year for the latest 3 years after the year of turnover or employ more than 3,000 employees;
- Social housing construction investment project.
- An investment project in a rural area that employs 500 people or more.
- Investment projects employing disabled workers in accordance with the law on People with disabilities.
- High-tech enterprises, science and technology enterprises, science and technology organizations.
- Projects involving technology transfer on the List of technologies encouraged to be transferred according to the provisions of law on technology transfer.
- Technology incubators, science and technology business incubators in accordance with the law on high technologies and law on science and technology; enterprises producing and supplying technologies, equipment, products and services to satisfy the environmental protection requirements in accordance with the law on environmental protection.
- Investment projects for creative startups, innovation centers, research and development centers.
- Investment in and trading in the product distribution chain of small and medium enterprises.
- Investment in and commercial operation of technical facilities to support small and medium enterprises, small and medium-sized enterprise incubators.
- Investment in and commercial operation of co-working areas to support small and medium-sized enterprises to start a creative start-up in accordance with the law on SME support.
More business lines eligible for investment incentives
The Law on Investment 2020 adds a number of industries and occupations eligible for investment incentives, including:
- University education;
- Production of products formed from scientific and technological results in accordance with the law on science and technology;
- Manufacturing products on the list of supporting industry products prioritized for development;
- Preservation of drugs, manufacture of medical equipment;
- Producing goods and providing services to create or join value chains or industry clusters.