Tiếng Việt| THE NATIONAL ASSEMBLY | SOCIALIST REPUBLIC OF VIET NAM |
| No. 03/1998/QH10 | Hanoi, May 20, 1998 |
ON DOMESTIC INVESTMENT PROMOTION (AMENDED)
With a view to mobilizing and using effectively all sources of capital, natural resources, labor and other potentials of the country, to contribute to socio-economic development for a prosperous people, a strong country and an equal and civilized society;
Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam;
This Law prescribes the promotion of domestic investment.
Article 2.- In this Law, the following terms are construed as follows:
1. "Domestic investment" means the use of capital for production and business in Vietnam by organizations and individuals defined in Article 5 of this Law.
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3. A "build-operate-transfer (BOT) contract" is a document signed between a competent State agency and an investor to build and do business with an infrastructure project within a given duration agreed upon by the two sides; when such time-limit expires, the investor shall transfer without indemnity such project to the State.
4. A "build-transfer-operate (BTO) contract" is a document signed between a competent State agency and an investor to build an infrastructure project; upon the completion of the construction, the investor shall transfer such project to the State. The competent State agency that has signed the contract shall reserve for the investor the right to do business with such project for a given duration agreed upon by the two sides.
5. A "build-transfer (BT) contract" is a document signed between a competent State agency and an investor to build an infrastructure project; upon the completion of the construction, the investor shall transfer such project to the State. The competent State agency that has signed the contract shall create conditions for the investor to implement other project(s) in order to recover the capital and earn profits.
6. "Vietnamese residing overseas" are Vietnamese citizens and people of Vietnamese stock residing, working and/or living permanently in foreign countries.
7. "Foreigners permanently residing in Vietnam" are citizens of foreign countries and people without nationality, who reside, work and/or live permanently in Vietnam.
8. "Geographical areas with difficult socio-economic conditions" are areas inhabited by people of ethnic minorities; mountainous areas; areas with underdeveloped infrastructure; and areas with unfavorable natural conditions.
9. "Geographical areas with particularly difficult socio-economic conditions" are high-mountain areas inhabited by people of ethnic minorities; islands; areas with poor infrastructure; and areas with extremely unfavorable natural conditions.
1. Vietnamese currency, foreign currencies;
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3. Buildings and workshops, constructions, equipment, machinery and other production and/or business facilities;
4. Land use right value as prescribed by the land legislation;
5. The value of the intellectual property rights, technical secrets and/or technological process;
6. Other lawful assets.
Article 4.- Governed by this Law shall be the following investment activities:
1. Investing in setting up production and/or business establishments of all economic sectors;
2. Investing in the construction of production chain(s), scale expansion, technological renewal, the improvement of ecological environment, removal of production establishment(s) from urban areas, the raising of production and/or business capacity, production restructuring, diversification of production/business lines and/or trades as well as products;
3. Buying stocks of enterprises, contributing capital to enterprises of various economic sectors;
4. Investment in the form of "build-operate-transfer", "build-transfer-operate" or "build-transfer" contracts.
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1. Objects of application of this Law include:
a) Investors being Vietnamese organizations or individuals;
b) Investors being Vietnamese residing overseas;
c) Investors being foreigners permanently residing in Vietnam.
2. The Prime Minister shall decide specific cases where foreign investors shall be permitted to contribute capitals to or buy shares of Vietnamese enterprises at a level not exceeding 30% of the concerned enterprise's statutory capital.
INVESTMENT GUARANTY AND SUPPORT
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In case of utter necessity when, for the reason of national defense, security or national interests, the State decides to compulsorily purchase or requisition the property of investors, the latter shall be paid up or compensated according to the market prices at the time of the announcement of the decision on compulsory purchase or requisition and shall be given favorable conditions to invest in appropriate domains and/or areas.
3. In cases where any change in a legal provision that damages the interests of an investor, the State shall allow the investor to continue enjoying the prescribed privileges for the remaining period or the State shall settle satisfactorily the interests for the investor.
1. Assigning or leasing land according to the provisions of the land legislation and civil legislation;
2. Making public announcement on each locality's land use planning already approved and funds of land that have not been used and the land that needs to be assigned or leased;
3. The Government shall submit to the National Assembly Standing Committee specific provisions on cases where investors are entitled to transfer, assign, sublease, mortgage or inherit the allocated or leased land.
1. Building medium- and small-size industrial parks in geographical areas meeting with difficult socio-economic conditions and areas with particularly difficult socio-economic conditions so that investors may use them as their production and/or business grounds with preferential terms;
2. Building infrastructure projects outside the perimeters of industrial parks or export processing zones so as to create favorable conditions for investment, production and business activities;
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The operation of the investment support funds and the export support funds shall comply with the Law on Credit Institutions.
2. The State shall set up the scientific and technological development support fund from the sources of the State budget as well as contributions by credit institutions, enterprises, domestic and foreign organizations and individuals in order to provide loans for investors under favorable terms and at preferential interest rates to conduct scientific research, application of technical and technological advances as well as the transfer and renewal of technologies.
The regulation on organization and operation of the scientific and technological development support fund shall be prescribed by the Government.
Article 12.- The State encourages the following investment support activities:
1. Consultancy on legal matters, investment, business and enterprise administration;
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3. Providing information on markets, sciences, techniques and technologies; the protection of intellectual property rights and technology transfer;
4. Marketing and trade promotion;
5. Establishing associations of producers, traders, exporters.
Experts and technicians who are foreigners, overseas Vietnamese or foreigners permanently residing in Vietnam and work for domestic production and/or business establishments shall be entitled to transfer abroad their after-tax income according to Vietnamese law.
Article 15.- Projects of investment in the following fields shall be entitled to preferences:
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2. Building infrastructure and developing public transportation; developing education, training, public health, national culture;
3. The production of and trading in export goods;
4. Offshore fishing; processing of agricultural, forest and/or aquatic products; technical services directly serving agricultural production, forestry and fishery.
5. Scientific and technological research and development; scientific and technological services; consultancy on legal matters, investment, business, enterprise administration; the protection of intellectual property rights and technology transfer; job and technicians' training and fostering of business management knowhows;
6. Investment in the construction of production chains, scale expansion; improvement of ecological environment and urban hygiene; the removal of production establishments from urban areas, diversification of production/business lines and products; investment in branches and trades that intensively employ domestic labor, first of all labor at the investment localities;
7. Branches and trades that should be given priority in each period of socio-economic development.
1. Areas with difficult socio-economic conditions;
2. Areas with particularly difficult socio-economic conditions.
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2. Investors having investment projects in areas with difficult socio-economic conditions shall enjoy the 75% reduction of land use levy in case they are assigned land and have to pay levy for the use thereof.
3. Investors having investment projects in areas with particularly difficult socio-economic conditions or investment projects defined in Article 15 of this Law in areas with difficult socio-economic conditions shall be exempt from the land use levy in case they are assigned land and have to pay levy for the use thereof.
2. Investors having investment projects in areas with difficult socio-economic conditions shall be exempt from the land rent for seven to ten years from the signing of the land-renting contract.
Investors having investment projects defined in Article 15 of this Law in areas with difficult socio-economic conditions shall be exempt from the land rent for 11 to 15 years from the signing of the land-renting contract.
3. Investors having investment projects in areas with particularly difficult socio-economic conditions shall be exempt from the land rent for 11 to 15 years from the signing of the land-renting contract.
Investors having investment projects defined in Article 15 of this Law in areas with particularly difficult socio-economic conditions shall be exempt from the land rent for the whole duration of project implementation.
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Investors having investment projects defined in Clause 2, Article 15 of this Law shall be entitled to the 50% reduction of land use levy for seven to ten years from the time they are assigned land.
2. Investors having investment projects in areas with difficult socio-economic conditions shall be exempt from the land use levy for seven to ten years from the time they are assigned land.
Investors having investment projects in the fields defined in Article 15 of this Law in areas with difficult socio-economic conditions shall be exempt from the land use levy for 11 to 15 years from the time they are assigned land.
3. Investors having investment projects in areas with particularly difficult socio-economic conditions shall be exempt from the land use levy for 11 to 15 years from the time they are assigned land.
Investors having investment projects defined in Article 15 of this Law in areas with particularly difficult socio-economic conditions shall be exempt from land use levy for the whole duration of project implementation.
1. Investing in the fields defined in Article 15 of this Law or investing in areas with difficult socio-economic conditions shall enjoy the tax rate of 25%.
2. Investing in areas with particularly difficult socio-economic conditions or in the fields defined in Article 15 of this Law in areas with difficult socio-economic conditions shall be entitled to the tax rate of 20%.
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2. Investors having projects on setting up production and/or business establishments in areas defined in Article 16 of this Law or projects of investment in the form of build-operate-transfer or build-transfer-operate contracts shall be entitled to the exemption or reduction of enterprise income tax at the highest preferential level as defined in Point b, Clause 1, Article 17 of the Law on Enterprise Income Tax.
1. The 50% reduction of the enterprise income tax to be paid in two subsequent years on the additional income amount brought about by such investment;
2. The exemption of enterprise income tax for two more years and the 50% reduction of the enterprise income tax amount to be paid in three subsequent years on the additional income amount brought about by such investment, for production and/or business establishments located in areas with difficult socio-economic conditions.
3. The exemption of enterprise income tax for three more years and the 50% reduction of the enterprise income tax amount to be paid in five subsequent years on the additional income brought about by such investment, for production and/or business establishments located in areas with particularly difficult socio-economic conditions.
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2. Investors being individuals shall be exempt from the income tax on the income amounts earned from their capital contribution to and/or purchase of shares of enterprises in areas defined in Article 16 of this Law for a period of 10 years from the time the investors are obliged to pay tax according to the law on personal income tax.
3. Investors contributing capital with their intellectual property rights, technical secrets and/or technological process shall be exempt from income tax on the amounts of income earned from such capital contribution.
1. Equipment, machinery, specialized transport means included in the technological lines, which are imported to create the enterprise's fix assets or expand investment scale, or renew technology;
2. Specialized transport means for the transportation of workers.
1. The 50% reduction of the payable enterprise income tax on the income amount earned from the export in the fiscal year, for investors who export the goods for the first time, export new kinds of goods or export goods to new markets;
2. The 50% reduction of the payable enterprise income tax on the amount of additional income from the export in the fiscal year, for investors having export turnover higher and higher from year to year.
3. The 20% reduction of the payable enterprise income tax on the income amount earned from the export in the fiscal year, for investors having export turnover accounting for more than 50% of the total turnover or having export market stable for three consecutive years;
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2. Investors having investment projects for removing production establishments from urban areas, or for the improvement of ecological environment and urban hygiene shall be considered by the Investment Support Fund for medium- and long-term loans with preferential interest rates to meet up to 70% of their investment capital demand.
3. Investors having investment projects in areas with difficult socio-economic conditions shall be considered with priority by the State's Investment Support Fund for medium- and long-term credit loans with preferential interest rates to meet up to 50% of their investment capital or for the guaranty of up to 70% of the loans for investment.
4. Investors having investment projects in areas with particularly difficult socio-economic conditions shall be considered with priority by the State's Investment Support Fund for medium- and long-term credit loans with preferential interest rates to meet up to 70% of their investment capital or for a guaranty of up to 80% of the loans for investment.
5. Investors having investment projects for the production of and/or trading in export goods shall, apart from the investment credit preferences defined in Clauses 1 and 2 of this Article, be considered by the Export Support Fund for export credit loans with preferential interest rates, covering up to 80% of the export credit on the basis of the export contract already signed or considered by this Fund for a guaranty of up to 80% of the export credit.
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Article 30.- The investors shall have the following rights:
1. To select branches, trades and geographical areas for investment on the Vietnamese territory;
2. To select forms of investment; to change or transfer investment projects in accordance with the provisions of law;
3. To register preference forms and levels in accordance with the provisions of this Law;
4. To be self-determined in investment, production and business activities which have already been registered;
5. To hire labor without any limits on quantity; to pay remuneration based on agreement with the laborers in accordance with the provisions of labor legislation;
6. To directly export and/or import registered products, except for those banned or restricted from export and/or import;
7. To be on exit and entry for the implementation of investment projects;
8. To complain, denounce or initiate lawsuit to competent State agencies against acts of law offenses committed by State bodies, cadres or officials in accordance with the provisions of law.
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1. To conduct production and/or business activities in strict accordance with their registration; fully observe all law provisions on accountancy and statistics; and take responsibility before law for the truthfulness and accuracy of the registration of preference forms and levels;
2. To pay tax and fulfil other financial obligations according to law;
3. To abide by the law provisions on national defense, security, order and social security;
4. To abide by law provisions on political organizations and socio-political organizations at enterprises, create favorable conditions for such organizations to operate.
5. To fulfill all obligations prescribed by the labor legislation;
6. To abide by law provisions on the protection of environment, historical and cultural relics, scenic places.
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2. The principals and interests of foreign loans during the process of production and/or business activities;
3. Investment capital;
4. Monies and other property under their lawful ownership.
STATE MANAGEMENT OVER DOMESTIC INVESTMENT PROMOTION
Article 35.- The Government performs the uniform State management over the investment and investment promotion throughout the country. The Government shall promulgate regulations on the order, procedures and competence for granting investment preferences to investment projects under this Law.
1. To assume the main responsibility and coordinate with concerned ministries and branches in formulating, supplementing or altering specific lists of investment preferences provided for in Article 29 of this Law and submit them to the Government for decision;
2. To disseminate, guide, oversee and supervise the application of investment support measures and preference regimes;
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1. To perform the function of State management over the domestic investment promotion in their respective localities according to the provisions of law;
2. To grant or refuse to grant investment preference certificates to already set-up production and/or business establishments within 30 days from the date of receiving the application for investment preference registration; to decide measures of investment preferences for newly set up production and/or business establishments. The investment preference measures shall be at the same time stated in the business registration certificates.
1. The inspection of activities of production and/or business establishments must be conducted according to functions and competence and in compliance with the provisions of law.
The economic-financial investigation shall be conducted not more than once a year for an enterprise. The inspection duration shall not exceed 30 days; for exceptional cases the investigation duration may be prolonged under decisions of the competent higher-level agency, but must not exceed 30 days.
The extraordinary and specialized investigation shall be conducted only when there are grounds to believe that production and/or business establishments have violated laws.
2. When conducting an investigation there must be a decision of the competent person; upon the completion of an investigation there must be the conclusion and report thereon; the person in charge of the investigation team shall take responsibility for the investigation conclusion and report;
3. Persons who decide unlawful investigation or misuse the investigation to seek personal profits, to harass for bribes or cause troubles to activities of production and/or business establishments shall, depending on the nature and seriousness of their violations, be disciplined or examined for penal liability; if damage is caused, compensation must be made to investors according to the provisions of law.
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COMMENDATION AND HANDLING OF VIOLATIONS
2. Additional preferences on the exemption and/or reduction of land use levy or land rent, the enterprise income tax preferences, the preferences regarding the import tax, investment credit, export credit, the investment credit guaranty, the export credit guaranty as prescribed in this Law for investors who have the investment preference certificates granted before the effective date of this Law shall be readjusted for application in the remaining grace period.
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4. The State shall not return all tax amounts and other financial obligations which the investors have fulfilled during the period before this Law comes into force.
Article 43.- This Law takes effect from January 1st, 1999.
This Law shall replace the Law on Domestic Investment Promotion passed by the IXth National Assembly on June 22, 1994 at its fifth session.
The previous stipulations contrary to this Law are hereby annulled.
Article 44.- The Government shall stipulate in detail and guide the implementation of this Law.
This Law was passed by the Xth National Assembly of the Socialist Republic of Vietnam, on May 20, 1998 at its 3rd session.
THE NATIONAL ASSEMBLY
CHAIRMAN
Nong Duc Manh
- 1 Decision No. 161/2006/QD-TTg of July 10, 2006 approving the master plan on socio-economic development of Dak Nong province up to 2020
- 2 Circular no. 113/2005/TT-BTC of December 15, 2005 guiding the implementation of the import tax and export tax law
- 3 Circular No. 98/2002/TT-BTC of October 24, 2002, guiding the implementation of tax exemption and reduction for subjects entitled to investment preferences under the Government’s Decree No. 51/1999/ND-CP of July 8, 1999 detailing the implementation of Domestic Investment Promotion Law (amended) No. 03/1998/QH10.
- 4 Decree No. 51/1999/ND-CP of July 8, 1999, detailing the implementation of Law No. 03/1998/qh10 on domestic investment promotion (amended)
- 5 Law No. 57/1997/L-CTN of May 10, 1997 on enterprise income tax
- 6 1992 Constitution of the Socialist Republic of Vietnam
- 1 Decision No. 161/2006/QD-TTg of July 10, 2006 approving the master plan on socio-economic development of Dak Nong province up to 2020
- 2 Circular no. 113/2005/TT-BTC of December 15, 2005 guiding the implementation of the import tax and export tax law
- 3 Decision No. 144/2004/QD-TTg of August 12, 2004 supplementing a number of preferential policies for Moc Bai border-gate economic zone, Tay Ninh province
- 4 Circular No. 113/2003/TT-BTC of November 27, 2003, guiding supplements to The Finance Ministrys Circular No. 98/2002/TT-BTC of October 24, 2002 which guides the tax exemption and reduction for subjects entitled to investment preferences.
- 5 Circular No. 98/2002/TT-BTC of October 24, 2002, guiding the implementation of tax exemption and reduction for subjects entitled to investment preferences under the Government’s Decree No. 51/1999/ND-CP of July 8, 1999 detailing the implementation of Domestic Investment Promotion Law (amended) No. 03/1998/QH10.
- 6 Circular No. 84/2002/TT-BTC of September 26, 2002, guiding financial matters for promoting the development of rural production/business lines and crafts
- 7 Decision no. 166/2001/QD-TTg of October 26, 2001 on a number of measures and policies to develop pig farming for export in the 2001-2010 period