INVESTMENT INCENTIVES

Question 1: Who are the beneficiaries of investment incentives?

Gattaca Law attorney answers:

Beneficiaries of investment incentives include:

(1) Investment projects in sectors or industries eligible for investment incentives or special investment incentives as specified in Appendix II of Decree 31/2021/NĐ-CP;

(2) Investment projects located in areas with difficult or particularly difficult socio-economic conditions as specified in Appendix III of this Decree.

(3) Investment projects with a capital scale of VND 6,000 billion or more are eligible for investment incentives when meeting the following conditions:

• Disburse a minimum of VND 6,000 billion within 3 years from the date of receiving the Investment Registration Certificate, Investment Policy Approval Decision along with investor approval (for projects not subject to the issuance of an Investment Registration Certificate) or the Investor Approval Decision (for projects not subject to the issuance of an Investment Registration Certificate);

• Achieve a minimum annual revenue of VND 10,000 billion within no later than 3 years from the year revenue is generated, or employ an average of 3,000 regular workers per year according to labor law regulations within no later than 3 years from the year revenue is generated.

(4) Investment projects for building social housing; investment projects in rural areas employing 500 or more workers; investment projects employing people with disabilities, as specified by the law on people with disabilities, including:

• Investment projects for building social housing as regulated by housing law;

• Investment projects in rural areas employing an average of 500 or more regular workers per year according to labor law (excluding part-time workers and workers on contracts of less than 12 months);

• Investment projects employing 30% or more of the average regular workforce per year as people with disabilities, in accordance with laws on people with disabilities and labor law.

(5) High-tech enterprises, science and technology enterprises, scientific and technological organizations; projects involving technology transfer in the list of technologies encouraged for transfer; technology incubators and science and technology enterprise incubators; enterprises producing and supplying technologies, equipment, products, and services for environmental protection, meeting conditions stipulated by laws on science and technology, high technology, technology transfer, and environmental protection.

(6) Investment projects for innovative start-ups, innovation centers, and research and development centers, including:

• The National Innovation Center, established by decision of the Prime Minister;

• Other innovation centers established by agencies, organizations, or individuals to support the implementation of innovative start-up projects, the establishment of innovative start-up enterprises, and promoting innovation and R&D activities at centers meeting the conditions outlined in point (7);

• Investment projects for innovative start-ups as specified in Clause 8 of this Article;

• Projects to establish research and development centers.

(7) Innovation centers are eligible for investment incentives when meeting the following conditions:

• Have the function of supporting, developing, and connecting innovative start-up enterprises with the start-up and innovation ecosystem;

• Include technical infrastructure components to support, develop, and connect the start-up and innovation ecosystem, including: laboratories, pilot production and technology commercialization facilities, support for enterprises to develop prototype products; infrastructure for installing technical equipment to provide one or more activities for enterprises to design, test, measure, analyze, inspect, and certify products, goods, and materials; information technology infrastructure to support enterprises, and event venues for displaying and showcasing innovative technology products;

• Have a professional management team to provide support, development, and connection services for enterprises operating in the center; have a network of experts and provide support services to connect enterprises.

(8) Innovative start-up investment projects include the following types of projects:

• Production of products resulting from inventions, utility solutions, industrial designs, integrated circuit layout designs, computer software, mobile applications, cloud computing; production of new livestock breeds, plant varieties, aquatic breeds, and forest tree varieties; technical advancements that have been granted protection certificates under intellectual property laws, copyright laws, or recognized by international registration according to treaties to which Vietnam is a party or have been recognized by competent state agencies;

• Production of products generated from pilot production projects, sample products, and completed technologies; production of products awarded in national start-up competitions, innovation start-up competitions, or awards related to science and technology, as stipulated by law on science and technology awards;

• Projects of enterprises operating in innovation centers and research and development centers;

• Production of cultural industrial products formed from copyrighted works or related rights granted protection certificates under intellectual property law or recognized international registrations according to treaties to which Vietnam is a party.

(9) Product distribution chains of small and medium-sized enterprises eligible for investment incentives are networks of intermediaries distributing products from small and medium-sized enterprises to consumers, meeting the following conditions:

• At least 80% of the participating enterprises must be small and medium-sized enterprises;

• There must be at least 10 distribution points for goods to consumers;

• At least 50% of the revenue of the chain must be generated by small and medium-sized enterprises participating in the chain.

(10) Incubators for small and medium-sized enterprises; technical support facilities for small and medium-sized enterprises; co-working spaces supporting innovative start-up SMEs, eligible for investment incentives as established under the law on support for small and medium-sized enterprises.

Question 2: What sectors are eligible for investment incentives?

Gattaca Law attorney answers:

The State encourages investment in priority sectors depending on the economic development phase. Below are the sectors eligible for investment incentives according to the 2020 Investment Law:

(i) High-tech activities, high-tech supporting industrial products, research and development activities, production of products derived from scientific and technological results as regulated by laws on science and technology;

(ii) Production of new materials, renewable energy, clean energy, energy-saving products with added value of 30% or more;

(iii) Production of electronic products, key mechanical products, agricultural machinery, automobiles, automobile parts, and shipbuilding;

(iv) Production of products in the list of prioritized supporting industrial products;

(v) Production of information technology products, software, and digital content;

(vi) Aquaculture, agricultural processing, forest product processing, salt production, marine resource exploitation, and fisheries logistics services; cultivation and forest protection; production of new plant and animal varieties, biotechnology products;

(vii) Collection, treatment, recycling, or reuse of waste;

(viii) Investment in developing, operating, and managing infrastructure projects; public passenger transport development in urban areas;

(ix) Preschool, primary, secondary, vocational, and higher education;

(x) Medical examination, treatment, production of medicines, drug ingredients, drug storage; scientific research on pharmaceutical technology and biotechnology for producing new drugs; production of medical equipment;

(xi) Investment in facilities for exercise and competition for people with disabilities or professionals; protecting and promoting cultural heritage values;

(xii) Investment in geriatric, mental health centers, treating patients exposed to Agent Orange; care centers for the elderly, people with disabilities, orphans, and homeless children;

(xiii) People's credit funds, microfinance organizations;

Production of goods or provision of services creating or participating in value chains, industrial cluster linkages.
 

Question 3: What areas are eligible for investment incentives?

Gattaca Law attorney answers:

The Vietnamese government encourages and provides incentives for investment projects in the following areas:

(i) Areas with difficult or particularly difficult socio-economic conditions (usually rural areas with difficulties, mountainous areas, remote regions, islands, etc.).

(ii) Industrial parks, export processing zones, high-tech parks, and economic zones.

(Source: Vietnam Investment Guidebook)