Incentives: What kinds of investment can investors receive incentives from the government? What type of incentives?

Updated: 21/11/2024 l 16:54

Tax Incentives

Preferential tax rate: Generally, preferential tax rate is applicable from the first revenue-generation year; except high-tech enterprises or projects.

Tax holiday: Generally, tax holiday is available from the first profit-making year for the fourth revenue-generation year; where applicable, except high-tech enterprises.

By Location

ACTIVITIES	CIT INCENTIVES
ACTIVITIES	PREFERENTIAL TAX RATE	TAX HOLIDAY
- With especially difficult socio-economic conditions - Economic Zones - High-tech Zones, including concentrated information technology parks established under the Prime Minister's decision	10% for 15 years	4 years of tax exemption; and 50% reduction for the next 9 years
- With difficult socio-economic conditions	17% for 10 years	2 years of tax exemption; and 50% reduction for the next 4 years
- Industrial Parks (which are not located in the favorable socio-economic locations)	Not applicable	2 years of tax exemption; and 50% reduction for the next 4 years

By Sector

The current incentive scheme is applicable for sectors that are prioritized for investment under the Government's development policies.

ACTIVITIES (for example)	CIT INCENTIVES
ACTIVITIES (for example)	PREFERENTIAL TAX RATE	TAX HOLIDAY
- High-tech enterprises (including science and technology enterprises); research, application, and incubation of hi-technology projects. - Environmental protection. - Investment for infrustructure development (water plant, power, road, port, etc.) - Software production. - Supporting industries	10% for 15 years	4 years of tax exemption; and 50% reduction for the next 9 years
Socialised projects in regions with difficult/especially difficult socio-economic regions	10% for whole project's duration	4 years of tax exemption; and 50% reduction for the next 9 years
Socialised project not located in difficult or especially difficult socio-economic regions	10% for whole project's duration	4 years of tax exemption; and 50% reduction for the next 5 years
Farming, husbandry, processing of agriculture and aquaculture in difficult regions; forestry in difficult regions; production of salt; preservation of agriculture products, aquaculture products and foods, etc.	10% for whole project's duration	Tax exemption and reduction under incentives for location (if applicable)
Farming, husbandry, processing of agriculture and aquaculture products not located in difficult and especially difficult regions	15% for whole project's duration
Manufacturing of steel, energy saving products, machinery and equipment serving agriculture, forestry, fisheries and salt production, traditional crafts, etc.	17% for 10 years

By Business Scale

Investment incentives are granted to large projects, manufaturing projects (excluding those in product manufacture subject to special sales tax or those in mineral resources exploitation) having either:

1. Total capital of VND 6,000 billion or more, disbursed within 3 years since being licensed with

Minimum annual revenue of VND 10,000 billion by the 4^th year of revenue generation at the latest; or
Regularly employing more than 3,000 employees by the 4^th year of operation at the latest.

2. Total capital of VND 12,000 billion or more, disbursed within 5 years since being licensed and using technologies being evaluated under the Law on Hi-technology, and the Law on Science and Technology.

ACTIVITIES	CIT INCENTIVES
	PREFERENTIAL TAX RATE	TAX HOLIDAY
VND 6,000 billion capital project (1)	10% for 15 years	4 years of tax exemption; and 50% reduction for the next 9 years
VND 12,000 billion capital project (2)

Land Rental Incentives

Land rental incentives are mostly governed by the Land Law 2013, and implementing regulations (including Decree No. 46/2014/ND-CP, Decree No. 123/2017/ND-CP, List of encouraged field and sectors in Decree No. 118/2015/ND-CP and other specific regulations).

PROJECT CONDITION	LAND RENTAL EXEMPTION PERIOD
1. PROJECT ENJOYING EXEMPTION OF LAND RENTAL FEE FOR WHOLE RENTAL PERIOD
- Project invest in specially encouraged investment sectors and in specially difficult socio-economic condition locations - Mega-project having total capital of at least VND 6,000 billion (*) in specially encouraged investment sectors.	The whole rental period
2. PROJECT ENJOYING EXEMPTION OF LAND RENTAL FEE FOR DEFINITE PERIOD
During the fundamental construction period of projects approved by the competent authorities After this 03-year-exemption time, subject to certain conditions, the investment project could enjoy the land rental fee exemption for further period as below:	Up to 3 years in the fundamental construction period
Project invest in encouraged investment sectors	3 years
Project invest in difficult socio-economic condition locations *Labor-intensive projects in rural areas using at least 500 labors ()**	7 years
Project invest in: - Specially encouraged sectors; or - Specially diffcult socio-economic condition locations; or - Encouraged sectors in difficult socio-economic location *Labor-intensive projects in rural areas using at least 500 labor () in encoured investment sectors Mega-project having total capital of at least VND 6,000 billion ()	11 years
Project invest in: - Specially encouraged sectors in difficult socio-economic locations; or - Encouraged sectors in specially difficult socio-economic location. *Labour-intensive projects in rural areas using at least 500 labors () in specially encouraged investment sectors Mega-projects having total capital of at least VND 6,000 billion () in encouraged investment sectors	15 years
3. OTHER SPECIFIC PROJECTS
Projects located in economic zones and hi-tech zones	Specific guidance of Government or the Prime Minister (***)
Other cases which are requested by the Minister of Finance according to the proposals of the Ministers, Heads of ministerial-level agencies, Government agencies and Presidents of the People's Committees of provinces	The Prime Minister shall condider and decide to grant the land rental exemption

(*) Labor-intensive projects located in the rural areas using at least 500 full-time employees signing labor contract of more than one year since official operation (excluding those doing commercial housing business or those manufaturing products subject to special sales tax (except automotive) or those exploiting mineral resources).

(**) Mega-projects (excluding those doing commercial housing business, or those manufacturing products subject to special sales tax (except automotive) or those exploiting mineral resources), having total capital of VND 6,000 billion or more, disbursed within 3 years since being licensed.

(***) Of note, the land rental fee exemption period for the projects located in economic zones and hi-tech zones could be 11 years, 13 years, 15 years, 17 years, 19 years or the whole rental period, which is regulated separately by Decree No.35/2017/ND-CP dated 03 April 2017 of the Government (effective from 20 June 2017).