by Apra Law

Over a few years, foreign investment capital has always been a particularly important nucleus for growth and international economic integration, contributing to supplementing capital, technology, management capacity, business ability, and capacity. organization and participation in the global supply chain of Vietnam. Recognizing the importance of that, Law on Investment 2020 has added many new regulations on the priority and consulting support for domestic and foreign investors, taking advantage of domestic resources as well as promoting the attracting FDI capital into Vietnam. Among these new points, the provision on policy incentives and support for special consultants is a prominent one.

  • Subjects entitled to special investment incentives and support

First, the group that enjoys investment incentives and support, especially investment projects that have a great impact on socio-economic development. These projects are specified in Clauses 2 and 6, Article 20 of the Law on Investment 2020, including:

– New establishment projects (expanding that newly established project) of innovation centers, research and development centers with total investment capital of 3,000 billion VND or more, disbursed at least 1,000 billion dong within 03 years from the date of issuance of investment registration certificate or approval of investment policy;

– The National Innovation Center is established under the Prime Minister’s decision and all affiliated establishments are located outside the Center’s head office;

– Investment projects in industries or trades with special investment incentives with an investment capital of VND 30,000 billion or more, disbursed at least VND 10,000 billion within 3 years from the date of issuance of the Certificate. investment registration or approval of investment policy;

– A particularly important investment project or a special administrative-economic unit.

It can be seen that the Investment Law 2020 has set out criteria for investment industries and fields; total registered investment capital and time limit for disbursement of investment capital to distinguish projects receiving special incentives and support from projects enjoying other investment incentives. In particular, projects of innovation centers, research centers or projects in industries with special investment incentives are on the list of beneficiaries of incentives under Clause 2, Article 15 of the Investment Law 2020 and Article 15 of this Law. 19 Decree 31/2021/ND-CP.

The list of industries and trades with special investment incentives in Appendix II of Decree 31/2021/ND-CP focuses mainly on four industries: High technology, information technology, and supporting industries; Agriculture; Environmental protection, infrastructure construction; Culture, society, sports, health, and at the same time supplement and concretize a number of related professions such as training high-tech human resources, providing high-tech services, manufacturing products using technology, etc. These are all necessary additions, contributing to promoting high-quality investment in fields to develop the quality of life of Vietnamese people.

Second, the group that is not entitled to special investment incentives and support includes the projects mentioned in Clause 5, Article 20 of the Investment Law 2020:

– Projects from before January 1, 2021;

– Mining projects;

– Projects subject to Special Consumption Tax (except for the production of cars, aircraft, and yachts);

– Commercial housing project.

According to the provisions of Article 13 of the Investment Law 2014 and 2020, higher investment incentives are always applied to investors to ensure a stable legal environment and incentives for investors to invest in industries. new, beneficial to society or implemented in areas with difficult/especially difficult socio-economic conditions. However, the current Investment Law has added exceptions to this principle, namely projects that have been granted an Investment Certificate, an Investment Registration Certificate or an investment policy decision before On the effective date of the Investment Law 2020, they are not entitled to special investment incentives and support.

  • Special investment incentives and support

Regarding incentives, projects are entitled to special investment incentives in accordance with the Law on Corporate Income Tax and the law on land. Consists of:

(i) Corporate income tax incentives:

– Tax rate: 5% reduction in tax rate, up to 37.5 years

– Tax exemption/reduction period: 6 years of exemption, 13 years of reduction (50% of payable tax)

(ii) Preferential rent for land and water surface:

– The period of exemption from land rent and water surface rent does not exceed 22.5 years

– The reduction does not exceed 75% of the land rent

Regarding investment support, projects entitled to special investment support are similar to enterprises enjoying other investment support, including the forms specified in Clause 1, Article 18 of the Law on Investment 2020 and Clause 6. Article 20 of Decree 31/2021/ND-CP, specifically:

– Support the development of technical and social infrastructure systems inside and outside the fence of investment projects;

– Support in training and developing human resources;

– Credit support;

– Support access to production and business premises; support production and business establishments to relocate under decisions of state agencies;

– Scientific and technical support, technology transfer;

– Supporting market development, providing information;

– Research and development support.

  • Competence to decide on application of special investment incentives and support

As the agency that directly implements and comprehensively administers all areas of social life, the Government is tasked with deciding on the application of special investment incentives and support. In addition, the Prime Minister also decides the level and duration of special investment incentives according to the criteria of high technology, technology transfer, Vietnamese enterprises participating in the chain, and the value of domestic production for foreign investors. investment projects specified in Clause 2, Article 20 of the Law on Investment 2020.

However, the Government may not decide on this application in all cases but in the cases specified in Clause 6, Article 20 of the Law on Investment 2020, it means when other forms of incentives and support may be applied. or projects other than those mentioned in the Law on Investment 2020 are considered for application, the Government must submit them to the National Assembly for decision.

This is a regulation in line with international practices and the actual situation in Vietnam. With the rapid economic development, the application of special investment incentives and support only in a group of projects predetermined in the Investment Law 2020 may lead to the omission of other projects. In addition, the Government’s pilot application of new forms of investment and economic organizations is also being applied in countries in the region such as Thailand, Myanmar, and Indonesia to increase competitiveness and attract foreigner investment.

Above is the consulting article on “New points on policies of investment policies and special investment support in Law on Investment 2020″ of Apra Lawfirm. If you still have questions about the above issues and need to be answered, please contact the hotline for advice and support.


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