Conditions and procedures for investment incentives application

1. Forms of incentives

According to the provisions of Clause 1, Article 15 of Law on Investment 2020, the following forms of investment incentives are available:

• 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

- Investment projects in business lines eligible for investment incentives.

- Investment projects located in the areas eligible for investment incentives.

- Any investment project whose capital is at least VND 6,000 billion may be eligible for investment incentives specified at Point c, Clause 2, Article 15 of the Law on Investment when fully meeting the following conditions:

• At least VND 6,000 billion is disbursed within 03 years from the issuance date of the investment registration certificate or the approval for investment guidelines.

• 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.

- Investment projects eligible for investment incentives as prescribed at Point d Clause 2 Article 15 of the Law on Investment include:

• Investment projects on construction of social housing in accordance with the law on housing.

• Investment projects in rural areas employing 500 or more regular employees annually in accordance with the law on labor (excluding part-time workers and laborers who have the contracts under 12 months).

• Investment projects employing 30% or more of the annual average regular employees who are disabled people according to the provisions of the law on people with disabilities and the law on labor.

- High technology enterprises, science and technology enterprises and science and technology organizations; projects involving transfer of technologies on the List of technologies the transfer of which is encouraged in accordance with regulations of the Law on Technology Transfer, science and technology enterprise incubators prescribed by the Law on High Technologies and Law on Science and Technology; enterprises manufacturing and providing technologies, equipment, products and services with a view to satisfaction of environment protection requirements prescribed by the Law on Environment Protection.

- The subjects entitled to investment incentives as prescribed at Point e Clause 2 Article 15 of the Law on Investment 2020 include:

• The National Innovation Center was established under the Prime Minister's decision;

• Other innovation centers established by agencies, organizations and individuals to support the implementation of innovative start-up investment projects, the establishment of innovative enterprises, and the implementation of innovation promotion activities and development at the center satisfying the conditions specified in Clause 7 Article 19 of Decree 31.

• Innovative start-up investment projects specified in Clause 8, Article 19 of Decree 31.

• Project to establish a research and development center.

- Innovation centers specified at Point b Clause 6 Article 19 of Decree 31 are entitled to investment incentives when meeting the following conditions:

• Having the function of supporting, developing and connecting innovative businesses with the startup and innovation ecosystem.

• There are a number of technical infrastructure items to support, develop and connect the startup and innovation ecosystem, including: laboratories, labs, test production and technology commercialization, support supporting enterprises to develop sample products; infrastructure for installation of technical equipment to ensure the provision of one or more activities for enterprises to design, test, measure, analyze, inspect and verify products, goods and materials; having information technology infrastructure to support businesses and space for organizing events, displaying and demonstrating innovative technologies and products.

• Having a professional management team to provide support, development and connection services for businesses operating in the center; has a network of experts and provides business support, development and networking services.

- Eighth, innovative start-up investment project specified at point c, clause 6 19 of Decree 31, one of the following projects:

• Producing products formed from inventions, utility solutions, industrial designs, design and layout of semiconductor integrated circuits, computer software, mobile phone applications, and cloud computing; production of new livestock strains and breeds, new plant varieties, new aquatic varieties, new forestry plant varieties; technical progress has been granted a protection title in accordance with the law on intellectual property and copyright or has been recognized for international registration under the provisions of an international treaty to which Vietnam is a contracting party or has signed. recognized by a competent state agency.

• Producing products created from pilot production projects, sample products and perfecting technology; produce products that win prizes at national startup and innovation competitions, science and technology awards in accordance with the law on science and technology awards.

• Projects of enterprises operating in innovation centers, research and development centers.

• Producing cultural industrial products formed from copyright or copyright-related rights which have been granted protection titles in accordance with the provisions of the law on intellectual property or recognized for international registration under the provisions of the international treaties which Vietnam is a signatory.

- The product distribution chain of small and medium-sized enterprises entitled to investment incentives as prescribed at Point g Clause 2 Article 15 of the Law on Investment 2020 is a network of intermediaries that distribute products of small and medium-sized enterprises to consumers and satisfy the following conditions:

• At least 80% of participating enterprises are small and medium enterprises.

• Having at least 10 locations to distribute goods to consumers.

• At least 50% of the chain's revenue is generated by the small and medium enterprises participating in the chain.

- Small and medium-sized business incubators; technical facilities to support small and medium enterprises; a co-working area to support small and medium-sized enterprises to start and enjoy investment incentives under the provisions of Point g Clause 2 Article 15 of Law on Investment 2020.

3. Procedures for investment incentives application

- For investment projects subject to issuance of Investment Registration Certificate or decision on investment policy:

Investors shall base themselves on the contents of investment incentives specified in the Investment Registration Certificate or the written decision on investment policies to enjoy investment incentives. The basis for application of investment incentives to science and technology enterprises is the certificate of science and technology enterprise. Investment incentives are stated in the Investment Registration Certificate, the investment policy decision document.

- For investment projects that are not subject to the issuance of an Investment Registration Certificate:

Investors are entitled to investment incentives if they meet the conditions for enjoying investment incentives without having to carry out procedures for issuance of an Investment Registration Certificate. In this case, the investor shall base himself on the conditions for enjoying investment incentives to determine the investment incentives and carry out the procedures for enjoying investment incentives at the appropriate tax, financial and customs authorities corresponding to each type of investment incentives.

- Bases for application of investment incentives to a number of enterprises and investment projects specified in Clause 5 Article 19 of Decree 31/2021/ND-CP include:

• For science and technology enterprises, it is the Certificate of Science and Technology Enterprise.

• For agricultural enterprises applying high technology, it is the Certificate of agricultural enterprise applying high technology.

• For hi-tech application projects, it is the certificate of high-tech application projects.

• For supporting industry projects, it is the Certificate of Incentives for the production of supporting industry products.

• For projects with technology transfer on the list of technologies encouraged for transfer, it is the Certificate of technology transfer encouraged for transfer according to regulations of the Prime Minister.

- For investment projects that do not fall into the cases specified in the above cases, the investors shall base themselves on the beneficiaries of investment incentives and relevant regulations of law to determine investment incentives and implement procedures for enjoying investment incentives at agencies applying investment incentives corresponding to each type of incentives.