Forms of investment incentives are applied to investors

Forms of investment incentives play an important role in attracting investment capital and promoting socio-economic development. The Law on Investment 2020 clearly stipulates forms of investment incentives to create favorable conditions for domestic and foreign investors. In the article below, we will provide detailed information about the forms of investment incentives, the conditions for receiving incentives, and the process of applying for incentives.

Forms of investment incentives

Pursuant to Clause 1, Article 15 of the Law on Investment 2020 regulates forms of investment incentives to create favorable conditions for investors, including:

1. Corporate income tax incentives, including:

• Apply a lower corporate income tax rate than the normal tax rate for a term or the entire duration of the investment project;
• Tax exemption, tax reduction and other incentives according to the provisions of law on corporate income tax;

2. Import tax exemption for goods imported to create fixed assets; raw materials, supplies, and components imported for production according to the provisions of law on export tax and import tax;
3. Exemption or reduction of land use fees, land rent, land use tax;
4. Accelerated depreciation, increasing deductible expenses when calculating taxable income.

Conditions for enjoying investment incentives

To enjoy investment incentives, projects and investors must meet specific conditions regarding subjects, industries and investment areas.

Subjects of investment incentives

Clause 2, Article 15 of the Law on Investment 2020 stipulates subjects eligible for investment incentives, including:

1. Investment projects in sectors and occupations eligible for investment incentives (Clause 1, Article 16 of the Law on Investment 2020).
2. Investment projects in investment incentive areas (Clause 2, Article 16 of the Law on Investment 2020).
3. Investment projects with capital of 6,000 billion VND or more, disbursement of at least 6,000 billion VND within 3 years, and at the same time have a total revenue of at least 10,000 billion VND per year or employ more than 3,000 workers.
4. Social housing construction investment project; Investment projects in rural areas employing 500 workers or more; Investment projects using disabled workers.
5. High-tech enterprises, science and technology enterprises; projects involving technology transfer; technology incubators; Enterprises that produce environmental protection products and services.
6. Creative startup investment projects, innovation centers, research and development centers.
7. Investment in product distribution chains of small and medium-sized enterprises; Investing in the business of technical facilities, incubators, and common working areas to support innovative small and medium-sized businesses.

Industry with investment incentives

Clause 1, Article 16 of the Law on Investment 2020 details the sectors and occupations eligible for investment incentives, including:

• High-tech activities, high-tech supporting industrial products, research and development, production of products from scientific and technological results.
• Producing new materials, new energy, clean energy, renewable energy; products with added value of 30% or more, energy saving products.
• Producing key electronic and mechanical products, agricultural machines, cars, and auto parts; shipbuilding.
• Production of supporting industrial products is a priority for development.
• Producing information technology products, software, and digital content.
• Cultivation and processing of agricultural, forestry and aquatic products; plant and protect forests; make salt; seafood exploitation and fisheries logistics services; production of plant varieties, livestock, and biotechnology products.
• Collect, treat, recycle or reuse waste.
• Investment in development, operation, and management of infrastructure projects; develop public passenger transport in urban areas.
• Preschool education, general education, vocational education, university education.
• Medical examination and treatment; production of drugs, medicinal ingredients, and drug preservation; Scientific research on preparation technology and biotechnology to produce new drugs; medical equipment production.
• Invest in facilities for practicing and competing in physical education and sports for people with disabilities or professionals; protect and promote cultural heritage values.
• Invest in centers for geriatrics, psychiatry, and treatment of patients infected with Agent Orange; Care centers for the elderly, people with disabilities, orphans, and homeless children.
• People’s credit funds, microfinance institutions.
• Producing goods, providing services, creating or participating in value chains or industry clusters.

Investment incentive areas

According to the provisions of Clause 2, Article 16 of the Law on Investment 2020, areas eligible for investment incentives include:

• Areas with difficult socio-economic conditions, areas with particularly difficult socio-economic conditions;
• Industrial parks, export processing zones, high-tech zones, economic zones.

Process for applying for investment incentives

The process of applying for investment incentives is carried out according to the following steps:

Step 1: Prepare documents to request investment incentives. Profile includes:

• Application for investment incentives;
• Investment registration certificate or Investment policy approval decision or Investor approval decision;
• Documents proving the project meets the conditions for investment incentives.

Step 2: Submit application for investment incentives. Documents can be submitted directly to the competent authority applying investment incentives or sent by post.

Step 3: Competent authority to receive and process documents.

Depending on the type of investment incentives, the competent authority can be a tax authority, a financial authority, a customs authority, or a land management authority. If all conditions are met, investment incentives will be applied.

Processing time also varies depending on the type of incentive.

Professional investment incentive consulting service in Long Phan

With a team of experienced experts in the investment field, Long Phan provides professional investment incentive consulting services, including:

• Consulting on choosing appropriate investment incentives;
• Consulting on conditions to enjoy investment incentives;
• Support in preparing documents to request investment incentives;
• Instructions on submission and procedures for applying for investment incentives;
• Representing customers in working with competent authorities;
• Consulting and answering questions related to investment incentives.

Investment incentives play an important role in attracting investment capital and promoting economic development. Understanding the forms, conditions and procedures for applying for investment incentives will help investors make the most of development opportunities. For detailed advice on investment incentives and other related issues, please contact the hotline: 0906735386.