Foreign investment (FDI) is important for all countries in the world. For developing countries, FDI inflows are especially important for international economic growth and integration, as it is an additional force of capital, technology, management capacity, business capability, ability to organize and participate in the global supply chain. Therefore, the Government of Vietnam also has preferential policies for foreign investors in Vietnam.
Forms of investment incentives
Based on the Law on Investment in 2020, the Government of Vietnam has the following forms of investment incentives for foreign investors:
1. . Corporate income tax incentives
This offer includes the application of:
- The corporate income tax rate is lower than the normal tax rate with a term or the entire duration of the investment project:
The corporate income tax rate is 20%, especially for foreign investment projects, the tax rate can be 10% for 15 years or during the operating period, the tax rate is 15%, the tax rate is 17% for 15 years or during the operating period depending on the case specified in Circular No. 78/2014/TT-BTC.
- Tax exemption and reduction
According to Circular No. 78/2014/TT-BTC, the tax exemption is divided into three categories depending on the case:
- 4-year tax exemption, 50% reduction in payable tax over the next 9 years
- 4-year tax exemption, 50% reduction in payable tax over the next 5 years
- 4-year tax exemption, 50% reduction in payable tax in the next 4 years
- Other incentives in accordance with the law on corporate income tax.
2. Import duty exemption
For goods imported for the creation of fixed assets; raw materials, supplies and components imported for production in accordance with the law on export duty and import tax.
3. Exemption and reduction of land use levy, land rent, land use tax
- Exemption of land use levy for enterprises with agricultural projects as prescribed in Decree No. 57/2018/ND-CP and the Land Law 2013.
- Exemption of land rent for investment projects in specially preferential fields invested in socio-economic areas is particularly difficult as prescribed in Decree No. 46/2014/ND-CP.
- Exemption and reduction of non-agricultural land use tax on investment projects in the field of investment incentive and investment projects in difficult areas according to Circular No. 153/2011/TT-BTC.
4. Rapid depreciation, increased cost is deductible when taxable income is calculated.
Forms of investment support
Based on the Investment Law 2020, the Government of Vietnam has the following forms of investment support for foreign investors:
1. . Supporting the development of technical and social infrastructure systems in and out of investment project fences
2. Supporting training and human resource development
3. Credit support
4. Supporting access to production and business premises; supporting relocated production and business establishments at the decision of state agencies
5. Scientific, technical and technology transfer support
6. Support market development, provide information
7. Support research and development.
See also: – Factors attracting FDI in Vietnam.
– Considerations when foreigners want to invest in Vietnam
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