CONDITIONS ON LOCATION OF INVESTMENT PROJECTS IN VIETNAM THAT FOREIGN INVESTORS NEED TO KNOW

The location of the investment projects can be understood as the place where the investor conducts investment activities. Depending on the location of the investment project, the Investor may receive incentives or not. In this article, OTIS LAWYERS will refer to readers with the content: "Conditions on the location of investment projects".

CONCEPT RELATED TO LOCATION OF INVESTMENT PROJECTS

– Export processing zone is an industrial park specializing in producing export goods, providing services for export production and export activities.

– Industrial park is an area with defined geographical boundaries, specializing in producing industrial goods and providing services for industrial production.

– Economic zone is an area with defined geographical boundaries, including many functional areas, established to achieve the goals of attracting investment, socio-economic development and protecting national defense and security.

LOCATIONS FOR INVESTORS TO IMPLEMENT INVESTMENT PROJECTS

Investors can implement investment projects at the following locations:

- An export processing zone is an industrial park for the purpose of specializing in the production of export goods, providing services for export production and export activities.

– An industrial park is an area with a defined geographical boundary, with the purpose of specializing in the production of industrial goods and providing services for industrial production.

An economic zone is an area with a defined geographical boundary, including many functional zones, established for the purpose of implementing the objectives of attracting investment, developing socio-economic and national defense. room, security.

– Other locations outside the above zones are allowed by the state in accordance with current law.

DIVISION TYPE OF INVESTMENT PROJECT LOCATION

Based on state policies, investment project locations can be divided into two types:

+ Location of investment projects eligible for investment incentives;

+ The location of the investment project is not eligible for investment incentives.

Regulations on locations for implementing investment projects eligible for investment incentives

– For locations where investment projects are implemented that are eligible for investment incentives, they will enjoy the following forms of incentives:

+ Corporate income tax incentives, including applying a corporate income tax rate lower than the normal tax rate for a term or the entire duration of investment project implementation; Tax exemptions, tax reductions and other incentives according to the provisions of law on corporate income tax;

+ Incentives on import tax exemption for imported goods to create fixed assets; raw materials, supplies and components imported for production in accordance with the law on import and export tax;

+ Incentives on exemption and reduction of land use fees, land rent, and land use tax;

+ Incentives for accelerated depreciation, increased deductible expenses when calculating taxable income.

– Areas serving as locations for implementing investment projects that enjoy investment incentives include:

+ Areas used to implement investment projects with difficult socio-economic conditions, areas with particularly difficult socio-economic conditions;

+ The area where the investment project will be carried out is: Industrial park, export processing zone, high-tech park, economic zone.

– The list of areas eligible for investment incentives is specified in Appendix III of Decree No. 31/2021/ND-CP.

Regulations on locations to implement investment projects that are not eligible for investment incentives

Except for the locations specified in the above section, other locations that investors choose to implement investment projects will not receive investment incentives.

FORMS OF INVESTMENT INCENTIVES APPLYING TO INVESTMENT INCENTIVE LOCATIONS

According to the provisions of Clause 1, Article 15 of the Investment Law 2020, projects located in locations eligible for investment incentives will be eligible for the following incentives:

– Corporate income tax incentives, including applying corporate income tax rates lower than normal tax rates for a term or the entire duration of investment project implementation; Tax exemption, tax reduction and other incentives according to the provisions of law on corporate income tax;

– Exemption from import tax for goods imported to create fixed assets; raw materials, supplies and components imported for production in accordance with the law on import and export tax;

– Exemption or reduction of land use fees, land rent, land use tax;

– Accelerated depreciation, increasing deductible expenses when calculating taxable income.

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