Subjects applying investment incentives when investing in Vietnam

Article overview

Subjects applying investment incentives and investment incentives in Vietnam are creating favorable conditions for investors to expand business activities. Investment incentive policies act as a lever to promote the country’s socio-economic development by attracting high-quality investment projects. Please follow Long Phan’s following article to better understand the subjects and forms of investment incentives that can be applied to your business.

The regulations on applying investment incentives in Vietnam
The regulations on applying investment incentives in Vietnam

Forms of investment incentives according to current regulations

Pursuant to Article 15 of the Law on Investment 2020, there are 4 main forms of investment incentives. Specifically, they are:

  • 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 according to the provisions of law on export tax and import tax;
  • Exemption or reduction of land use fees, land rent, land use tax;
  • Accelerated depreciation increases deductible expenses when calculating taxable income.

Subjects applying investment incentives in Vietnam

According to Clause 2, Article 15 of the Law on Investment 2020, there are 7 groups of subjects eligible for investment incentives. However, there are important notes to help investors clearly understand and comply with the necessary conditions. Specifically:

  1. Investment incentives apply to new investment projects and expansion investment projects.
  2. Specific incentive levels for each type of investment incentives are applied according to the provisions of tax, accounting and land laws.
  3. Investment incentives specified in Points b, c and d, Clause 2 of this Article do not apply to the following investment projects:
  • Mineral exploitation investment projects;
  • Investment projects to produce and trade goods and services subject to special consumption tax according to the provisions of the Law on Special Consumption Tax, except for projects to produce cars, aircraft, and yachts;
  • Commercial housing construction investment projects according to the provisions of housing law.
  1. Investment incentives are applied for a limited time and are based on the investor’s project implementation results. Investors must meet the conditions for enjoying incentives according to the provisions of law during the investment incentive period.
  2. Investment projects that meet the conditions for various levels of investment incentives, including investment incentives as prescribed in Article 20 of the Law on Investment 2020, will be eligible for the highest level of investment incentives.
The subjects applying investment incentives currently
The subjects applying investment incentives currently

Legal regulations on industries and areas eligible for investment incentives

Industries, occupations and areas eligible for investment incentives are detailed in Article 16 of the Law on Investment 2020. Specifically:

  • Industries and occupations with investment incentives: Including the fields of high technology, clean energy, supporting industries, research and development, education, health, environment, and other sectors with sustainable development implications. In particular, activities related to waste treatment, recycling, and water source recovery have been added according to Point a, Clause 3, Article 84 of the Law on Water Resources 2023.
  • Investment incentive areas: Including areas with difficult and extremely difficult socio-economic conditions, and industrial zones, export processing zones, high-tech zones, and economic zones.

Procedures for applying investment incentives

Investors determine their own investment incentives and carry out procedures to enjoy them at the tax authority, financial authority, customs authority and other competent authorities corresponding to each type of investment incentive according to the following process:

Step 1: Determine the basis for applying investment incentives

  • For projects that are granted an Investment Registration Certificate, Investment Policy Decision or Science and Technology Certificate, the investor shall base on the content of the Investment Registration Certificate to decide on investment policy. Investment or Science and Technology Certificate to carry out procedures for enjoying investment incentives.
  • For projects that are not granted an Investment Registration Certificate, Investment Policy Decision or Science and Technology Certificate, the investor will base on the beneficiaries of investment incentives specified in Clause 2, Article 15 of the Law on Investment 2020 to carry out procedures for enjoying investment incentives.

Step 2: Submit application for investment incentives via post/directly at the headquarters of the agency applying investment incentives

Specifically, the dossier includes:

  • Declare/recommend application of investment incentives.
  • Investment registration certificate, Investment policy decision; Certificate of science and technology enterprise… in case one of these documents is issued.

Step 3: The agency applying investment incentives applies incentives to investors

  1. Investment incentives are adjusted in the following cases:
  • In case the investment project meets the conditions to receive additional investment incentives, the investor will enjoy that investment incentive for the remaining incentive period;
  • Investors are not entitled to incentives as prescribed in the Investment Registration Certificate or investment policy decision document in case the investment project does not meet the conditions for investment incentives specified in the Certificate. Receive investment registration and decide on investment policies. In case the investment project meets the conditions for other investment incentives, the investor will enjoy incentives according to those conditions;
  • In case an investment project has a period of time that does not meet the conditions for investment incentives, the investor is not entitled to receive investment incentives for the period of time that does not meet the conditions for investment incentives.
  1. A newly established economic organization or an investment project from the conversion of the type of economic organization, ownership conversion, division, separation, merger, consolidation, or transfer of an investment project shall inherit the investment incentives of the investment project before the conversion, division, separation, merger, consolidation, or transfer.

Legal basis: Article 17 of the  Law on Investment 2020, Article 23 of Decree 31/2021/ND-CP and Decision No. 701/QD-BKHDT.

>>> See more: Investment incentives are applied to investors.

The steps for applying investment incentives
The steps for applying investment incentives

Consulting services and instructions on how to apply investment incentives

Long Phan provides in-depth consulting services and detailed instructions on how to apply investment incentives, supporting businesses to optimize benefits during the implementation of investment projects. Our services include:

  • Consulting on determining investment incentives to identify industries, occupations and investment areas eligible for incentives according to legal regulations.
  • Consulting on conditions for applying incentives based on Investment Registration Certificate, investment policy decision, or other legal bases.
  • Consulting and support in preparing necessary documents such as application, declaration of incentive application, and related documents to ensure the validity and completeness of the application before submission.
  • Support customer representatives with application procedures at state agencies.
  • Consulting and guidance on adjusting incentives when there are changes in project conditions, ensuring businesses continue to enjoy benefits.

With the motto of focusing on customer benefits, Long Phan commits to accompanying customers in every process from the stage of determining preferential conditions, supporting application procedures, and representing working with agencies. The government comes to advise on compliance and provide the most effective solution for your project. Please contact us immediately via the hotline 0906735386 for detailed advice and the most complete support on investment incentives in Vietnam.