VIETNAM: Three Special Investment Project Incentive Schemes Confirmed

Three new incentive schemes relating to a number of the country’s special investment projects have been announced. All of the schemes in question are said to apply to both new and existing investment projects. 

The first scheme offers a corporate income tax (CIT) rate of 5% for 37 years, with an initial exemption for six years followed by a 50% reduction for 13 years. It also provides for land and water surface rent exemptions for 22 years, followed by a 75% reduction for the project’s remaining period. Projects eligible for this scheme are national innovation centres and level 2 projects in preferential sectors with not less than VND30 trillion (US$1.3 billion) in total investment capital, with one third disbursed within three years. Among the projects covered are high-tech, supply chains with local partners and technology transfer; as well as projects where the local value-added exceeds 40% of the total product cost. 

The second scheme offers a CIT rate of 7% for 33 years, with an initial exemption for six years followed by a 50% reduction for 12 years. It also extends to an exemption from land and water surface rents for 20 years, followed by a 65% reduction for any project’s remaining period. This scheme covers level 1 projects with a total investment capital of at least VND3 trillion, of which one third is disbursed within three years. High-tech, supply chain or technology transfer projects; projects where local value-added accounts for between 30% and 40% of the final product cost; innovation centres; and R&D centres are eligible. National innovation centre projects, however, are not eligible. 

The third scheme offers a CIT rate of 9% for 30 years, with an initial CIT exemption for five years followed by a 50% reduction for a further 10 years. Projects also get a land and water surface rent exemption for 18 years, followed by a 55% reduction for the remaining project period. Those projects in preferential sectors not covered by scheme one or two are eligible.