What is the investor’s new investment projects?

New investment projects are an important aspect in distinguishing investment projects in Vietnam. Domestic investors have the opportunity to expand scale through these types of projects. However, to invest in this project, investors need to carefully calculate capital, profits and financial risks, while also considering economic benefits and potential risks. This article will clarify the necessary factors related to new investment projects.

Conditions for a project to be considered a new investment

A new investment project is an investment project implemented for the first time or an investment project independent of an ongoing project. It includes the construction of new facilities, the purchase of fixed assets, machinery and equipment to create new products and services. New investment projects often require large capital, detailed planning and thorough risk assessment.

Distinguishing new investment projects from expansion projects is very important, especially in determining investment incentives. Expansion projects are often increasing production scale, increasing capacity or innovating technology of an existing project, while new investment projects create a completely new business unit.

Legal basis: Clause 6, Article 3 of the Law on Investment 2020.

Popular new forms of investment projects

New investment projects can appear in many different forms, depending on the goals, scale and investment field. Each form has its own characteristics and requires a different approach from investors. Choosing the appropriate form will affect the effectiveness and success of the project.

New forms of investment projects are popular in areas such as:

• Greenfield project: This is a completely new form of investment, in which the investor builds facilities from scratch on an empty land. Greenfield projects often require large capital investments but allow investors to have full control and design the project as desired. For example: building a new factory or a tourist resort.
• Acquisition and new investment projects: Investors buy an existing business or asset, then make new investments to renovate, upgrade or change the purpose of use. This form helps save time and initial costs compared to greenfield projects. For example, buying an old hotel and renovating it into a modern commercial complex.
• New joint venture project: Two or more investors cooperate to carry out a new investment project. Each party contributes capital, technology or management experience. This form helps share risks and take advantage of the strengths of participating parties. For example, a domestic company enters into a joint venture with a foreign partner to build an electronic components factory.
• BOT project (Build – Operate – Transfer): The investor builds and operates the project for a certain period of time, then transfers it back to the state. This form is often applied to large infrastructure projects. For example: building and operating a highway.
• New investment projects in the field of technology: Includes the development of new products, services or technology platforms. These projects often require large investments in research and development. For example, developing a new fintech application or an artificial intelligence platform.

Each new form of investment project has its own advantages and disadvantages. Investors need to consider carefully based on their financial capacity, management experience and long-term goals to choose the most suitable form.

Investment incentives for new investment projects

Forms of incentives for new investment projects

Tax incentives are the most common form of investment incentive policies. For new investment projects, the main types of tax incentives include:

1. Corporate income tax (CIT) incentives:

• Preferential tax rates: New investment projects can enjoy corporate income tax rates of 10% or 17% for a period of 15 years or throughout the project implementation period, instead of the normal tax rate of 20%;
• Corporate income tax exemption: Projects can be exempted from corporate income tax for 2 to 4 years from the date of taxable income;
• Corporate income tax reduction: After the tax exemption period, the project can receive a 50% reduction in tax payable for the next 4 to 9 years.

Legal basis: Article 19 of Circular 78/2014/TT-BTC (supplemented by Clause 5, Article 1 of Circular 96/2015/TT-BTC).

1. Import tax incentives:

• Exemption from import tax for imported goods to create project fixed assets;
• Import tax exemption for a period of 5 years from the start of production for raw materials, supplies and components that cannot be produced domestically.

Legal basis: Article 16, Article 18 of the Law on Export Tax and Import Tax 2016.

1. Value added tax (VAT) incentives:

• Some new investment projects in the fields of agriculture, health care, and education may be exempt from VAT or apply a low tax rate of 5% instead of the normal rate of 10%.

Legal basis: Article 8, Article 13 of the 2008 Law on Value Added Tax amending and supplementing the 2013 Law on Value Added Tax.

1. Land use tax incentives:

• Exemption or reduction of land rent and land use fees for new investment projects in areas with difficult or extremely difficult socio-economic conditions.

Legal basis: Article 18, Article 19 of Decree 103/2024/ND-CP.

These tax incentives help significantly reduce the financial burden for investors in the early stages of the project, when costs are high but revenue is not stable.

Conditions for enjoying preferential investment policies

To enjoy investment incentives, new investment projects must meet certain conditions. Specifically:

• Investment incentive fields: Projects in investment-encouraged fields such as high technology, environmental protection, renewable energy, high-tech agriculture, etc.
• Investment incentive areas: Investment projects in areas with difficult or extremely difficult socio-economic conditions.
• Investment capital scale: Some incentives only apply to projects with investment capital scale of a certain level or more.
• Number of workers employed: Projects that create many jobs for local workers may receive special incentives.
• Socio-economic efficiency: The project must demonstrate economic efficiency and contribute to local social development.

Investors need to carefully study the legal regulations on investment incentives and consult experts to ensure the project meets the conditions for incentives.

Legal basis: Clause 1, Article 18, Circular 78/2014/TT-BTC.

Consulting services for setting up new investment projects in Long Phan

In the modern economic context, establishing a new investment project requires careful and strategic preparation. Long Phan’s consulting service for setting up new investment projects provides comprehensive support for businesses and investors to design, implement and manage effective investment projects. Categories that Long Phan can support customers in this process include:

• Support investors in complying with legal regulations related to investment, preparing licensing applications and necessary legal procedures.
• Consulting on financial planning, analyzing investment capital, profits and financial risks of the project.
• Consulting and analyzing the environmental impact of the project and preparing an environmental impact assessment report according to regulations.
• Consulting on conditions for enjoying investment incentives, tax incentives and support from the state.
• Support in negotiating investment and cooperation terms
• Support in resolving problems that arise during project implementation

Implementing investment projects is an important activity when establishing and has strategic significance to the development of the enterprise. To ensure economic benefits and limit financial risks, Long Phan provides professional consulting services for new investment projects. A team of consulting experts will support businesses in analyzing potential for new investment projects, contributing to improving opportunities for investors. Customers can contact Long Phan via Hotline 0906.735.386 for detailed advice.