Viet Australia's business update: investment incentives in Phú Yên's industrial zones

Since 1986 the Vietnamese Government is making a lot efforts in order to attract foreign investments in Vietnam. One of the pillars that governs foreign investments in Vietnam is the Law on Investment No. 67-2014-QH13 which defines the conditions and the concepts related to investments in Vietnam. This law defines different types of zones which are eligible for investments such as Industrial zones, Export Processing Zones, High-Tech zones and Economic zones.

Each of these zones will have different preferences in terms of sector of investment and will encourage investors in those sectors by providing them with specific incentives, especially in terms of taxes and preferential prices. The conclusion is that investment incentives in Vietnam will vary according to their sector of investment and to the location of the investment, therefore in order to know more about incentives for investors, and foreign investors in particular, one needs to focus on a particular province and at the applicable incentives determined by the local administration. Hence Viet Australia would like to introduce three industrial zones in Phú Yên province in Central Vietnam to our readers as this area of Vietnam still remains relatively unknown to many foreign investors.

In Phú Yên province, there are three industrial zones:

• Hòa Hi?p Industrial Zone in the South – with preferred investments in: forest and aquatic products processing, garment & textile, food processing, construction materials manufacture, electronics, mechanics, beverage, plastic, wood paper.
• An Phú Industrial Zone in the Center – with preferred investments in: food processing, canned food, mechanics, home appliances, carpentry, beverages.
• Northeast S?ng C?u Industrial Zone in the North – with preferred investments in: forest and aquatic products processing, garment & textile, food processing, construction materials manufacture, electronics, mechanics, beverage, plastic, wood paper.

Land lease incentives

Each of those industrial zones has different incentives, and as a first point we shall see what kind of incentives are offered for land leases. There are two different kinds of incentives of land lease for land with developed infrastructure.

The first type of incentive for lease of land with developed infrastructure is a low fixed price for the first five (05) years after the investment:

Hòa Hi?p Industrial Zone: 0,2 USD/m2/year

An Phú Industrial Zone: 0,35 USD /m2/ year.

Northeast S?ng C?u Industrial Zone: 0,2 USD/m2/year.

The second type of incentive for lease of land with developed infrastructure is a discounted price during the initial period of the investment:

Hòa Hi?p Industrial Zone: the land lease is reduced by 50% within six (06) years from the date the investor is assigned a site for the building of his own infrastructure.

An Phú Industrial Zone: the land lease is reduced by 50% within four (04) years from the date the investor is assigned a site for the building of his own infrastructure.

Northeast S?ng C?u Industrial Zone: the land lease is reduced by 50% within six (06) years from the date the investor is assigned a site for the building of his own infrastructure.

Preferential rates for the use of the industrial zone's infrastructure:

The first incentive for the price for the use the infrastructure (does not yet include VAT) is a low fixed price for the first three (03) years after the investment:

Hòa Hi?p Industrial Zone: 0,1 USD/m2/year.

An Phú Industrial Zone: 0,15 USD/m2/year.

Northeast S?ng C?u Industrial Zone: 0,1 USD/m2/year.

The second incentive is a deposit for use the industrial zone's infrastructure reduced by 50% for the first six (06) years from the date the investor is assigned a site for the building of his own infrastructure.

Besides those incentives, investors in Phú Yên province still have the possibility to apply additional and more personalized incentives by submitting their applications to the People's Committee of the province that will review it and take a decision whether the investor can be granted additional investment incentives or not.

If you have any questions concerning Vietnamese laws, business in Vietnam or any other related topic, and/or if you are interested in our Company's services, feel free to contact us by email: [email protected], or you can reach us by phone at (+84) 0903770777.

Viet Australia's Auditing Ltd. team