MANY PREFERENTIAL POLICIES AND SUPPORT FOR THE DEVELOPMENT OF INDUSTRIAL CLUSTERS - OTIS LAWYERS

In order to continue perfecting policies and laws on the management and sustainable development of industrial clusters, effectively meeting the socio-economic development requirements of localities and promptly addressing emerging issues in practice, recently, the Government issued Decree No. 32/2024/ND-CP (dated March 15, 2024), which took effect from May 1, 2024. Accordingly, the Decree introduces several new points regarding preferential policies and support for the development of industrial clusters.

Numerous preferential policies and support measures

The application of incentives for investment projects in the construction of technical infrastructure for industrial clusters, investment projects in production and business within industrial clusters shall be carried out in accordance with the provisions of land laws, tax laws, credit laws, and other relevant legal regulations. In cases where the law stipulates different levels of incentives, the highest level of incentives shall apply.

- The Decree stipulates that the local budget (including additional revenue from the central budget to local budgets) shall balance and support investment, develop technical infrastructure systems within and outside industrial clusters in the area (prioritizing support for the construction of environmental protection infrastructure for operational industrial clusters; support for investment in essential common technical infrastructure of industrial clusters in economically and socially difficult, especially difficult areas, industrial clusters developed towards sectoral, specialized, supportive, ecological, and traditional craft preservation linkages) as prescribed by the Law on Public Investment and the State Budget Law.

- Provincial People's Committees report to Provincial People's Councils at the same level to decide or decide according to authority, regulations of legal provisions on supporting investment in the construction of technical infrastructure for industrial clusters in the area.

"According to the Decree, the State supports up to 30% of the total investment capital of investment projects in the construction of technical infrastructure for industrial clusters. The support funds are not included in the total investment capital of the project for calculating land leasing fees, infrastructure usage fees for investment projects within industrial clusters. Investors in the construction of technical infrastructure for industrial clusters are responsible for managing, repairing, and regularly operating the supported technical infrastructure facilities to serve the collective activities of the industrial clusters."

- Article 27 of the Decree also stipulates that the central budget ensures funding for the operation of industrial cluster development activities carried out by the Ministry of Industry and Trade including: Surveying, building, operating industrial cluster databases; organizing conferences, seminars, coordinating investment promotion in industrial clusters; disseminating information, printing, publishing documents, training, legal, and policy workshops on industrial clusters; Surveying, evaluating, building policies, management models, experiences in industrial cluster development domestically and internationally; building, disseminating policies and laws on industrial cluster management and development.

- Researching, developing criteria for identifying effective, environmentally friendly industrial cluster development models (such as specialized industrial clusters, supportive industrial clusters, ecological industrial clusters, etc.); organizing guidance, recognition for industrial cluster development models; organizing commendations, summaries, and building development direction reports for industrial clusters.

- In addition, the Decree also stipulates that local budgets ensure funding for the operation of industrial cluster development activities carried out by localities including: Development activities of industrial clusters specified in points a and b of clause 1.

- Organizing investment promotion activities for industrial clusters; surveying, researching organizations, individuals with relocation, investment needs in industrial clusters; establishing, appraising the establishment, expansion of industrial clusters; detailed planning of industrial clusters; supporting administrative procedures related to industrial clusters. Supporting funding for investment project development proposals, transportation costs, installation of machinery, equipment for enterprises, cooperatives, cooperative groups, households in craft villages, relocated residential areas into industrial clusters, craft village industrial clusters. The specific support level is decided by the provincial People's Committees.

"Decree No. 32/2024/ND-CP dated March 15, 2024 issued by the Government stipulates investment incentives for: Industrial clusters in economically and socially difficult areas; investment in the construction of technical infrastructure for industrial clusters as sectors, industries with particularly preferential investment. The decree specifies that the funds for the operation of industrial cluster development activities are the fund source for the cause; managed and used in accordance with the provisions of the State Budget Law and guiding documents."

Important new points on preferential policies, support for industrial cluster development

Decree No. 32/2024/ND-CP, which takes effect from May 1, 2024, introduces some prominent new points and some notable changes compared to previous decrees on the management and development of industrial clusters as follows:

- To comply with the current Land Law provisions (Article 149, paragraph 2) on mechanisms for leasing land for investment in business infrastructure of industrial clusters and to enhance the effectiveness of the operations of industrial clusters where enterprises have been investing in infrastructure development, Decree No. 32/2024/ND-CP specifies the model of investors in constructing technical infrastructure for industrial clusters as enterprises, cooperatives, organizations established and operating in accordance with Vietnamese law to carry out investment and business activities in technical infrastructure of industrial clusters.

For units assigned as investors in constructing technical infrastructure for industrial clusters specified in Article 15, paragraph 2 of Decree No. 68/2017/ND-CP, they shall continue to operate until there is a decision on rearrangement, handling by the competent authority; perform the rights, obligations of investors in constructing technical infrastructure for industrial clusters specified in Decree No. 32/2024/ND-CP and related laws.

- Decree No. 32/2024/ND-CP continues to stipulate procedures for the establishment, expansion of industrial clusters (including the choice of investors in constructing technical infrastructure for industrial clusters) and at the same time assigns the Ministry of Planning and Investment to study, propose competent authorities to regulate investment projects on construction of technical infrastructure for industrial clusters suitable to the content of approved reports on investment establishment, expansion of industrial clusters without having to implement procedures for investment policy approval according to investment laws.

- Delegating provincial People's Committees to decide (in the Decision on establishment, expansion of industrial clusters) the adjustment of names, position changes within the administrative boundaries of districts, the area increase of no more than 05 hectares compared to the approved planning, in accordance with district land use planning and other planning on the area; simultaneously updating the changed content to report to the Prime Minister at the next provincial planning approval session.

- Assigning provincial People's Committees to base on their authority, legal regulations to decide on adjusting or abolishing the Decision on establishment, expansion of industrial clusters to suit the actual conditions of the locality.

Regarding the adjustment of investors in constructing technical infrastructure for industrial clusters, if the industrial cluster has technical infrastructure formed from the state budget, the provincial People's Committee shall assign the selected investor in constructing technical infrastructure to manage, repair, and operate to serve the collective activities of the industrial cluster. Funds for construction of technical infrastructure for industrial clusters from the state budget shall not be included in the land leasing price, the price of using common technical infrastructure of industrial clusters; management, repair, operation costs of technical infrastructure facilities shall be included in the price of using common technical infrastructure of industrial clusters. In case specialized laws regulate this content, it shall be implemented according to specialized laws.

- Decree No. 32/2024/ND-CP continues to regulate the transfer of handling the establishment of industrial clusters formed before Decision No. 105/2009/QD-TTg dated August 19, 2009, of the Prime Minister. Accordingly, the Decree assigns provincial People's Committees to, based on the actual situation, the effectiveness of industrial cluster activities, review the current status of investment in technical infrastructure, related legal documents of industrial clusters to clarify the necessity, compliance with legal provisions, feasibility, and decide on the establishment of industrial clusters.

"Decree No. 32/2024/ND-CP dated March 15, 2024 stipulates the conditions for the establishment, expansion of industrial clusters must meet the following conditions:

Included in the list of industrial clusters in the provincial area already approved by the competent authority; have suitable land funds according to land use planning in the district;

Have enterprises, cooperatives, organizations with legal status, and investment capacity to construct technical infrastructure proposed to be investors in constructing technical infrastructure for industrial clusters;

In case the district has established industrial clusters, the average occupancy rate of industrial clusters reaches over 50% or the total unused industrial land fund of industrial clusters does not exceed 100 hectares

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