To woo investors and boost business development in industrial parks, Vinh Phuc province has applied tax incentives and financial solutions within its jurisdiction and in line with local conditions.
Specifically, Vinh Phuc applies a corporate income tax of 10% for 15 years for high-tech firms and corporate income taxes subject to new investment projects engaged in scientific and technological research and development; software manufacturing; composite material manufacturing; light construction material manufacturing; rare and precious material production; renewable energy production, waste-to-energy production; biotechnology development; manufacturing of environmental treatment equipment, environmental monitoring and analysis equipment; pollution treatment and environmental protection; collection and treatment of solid waste, wastewater and gas emissions; recycling and reuse of waste for new manufacturing investment projects with the minimum registered value of VND6,000 billion, disbursed within three years since the year of licensing and minimum total revenue of VND10,000 billion in three years from the first year with revenue; or projects with a minimum investment fund of VND6,000 billion, disbursed within three years of the date of investment licensing and hiring more than 3,000 employees within three years from the year with revenue.
Besides, Vinh Phuc levies a corporate income tax of 20% over 10 years, applicable to corporate income tax from new investment projects that make high-grade steel; manufacture energy-saving products; manufacture machinery and equipment for agriculture, forestry and fishery; manufacture irrigation equipment; manufacture and refine animal feeds; and develop cottage industries. Other companies will be subject to a corporate income tax of 22%, with an exemption/reduction in 2-4 years, a 50% reduction in the next 4-9 years, depending on their investment projects.
To boost importing and exporting activity of tenants in industrial parks, Vinh Phuc exempts import duty on goods used to create fixed assets of investment projects like equipment, machinery and special-use transport means that cannot be made locally; components, detachable parts, spare parts, fittings, molds and accessories for synchronous assembly of equipment, machinery, inputs and supplies that cannot be made locally and used to manufacture equipment and machinery of technological lines or to manufacture components, detachable parts, spare parts, fittings, molds and accessories for synchronous assembly of equipment, machinery and construction materials that cannot be produced locally.
Furthermore, Vinh Phuc also offers other incentives such as exemption or reduction of land rent and water surface rent. Investors are exempt from land rent and water surface rent for their whole leasing term of land commonly used for infrastructure construction in industrial parks according to the plan approved by competent authorities. They are free from land rent or water surface rent when the basic infrastructure is built according to projects approved by competent authorities (no more than three years from the date of issuing the decision on land lease or water surface lease). They are exempt from land rent and water surface rent in 11 years after the time they get exempted for building the basic infrastructure as mentioned above. The province provides support for site clearance but the value does not exceed 15% of the land compensation fund or 100% of the fund in case of coercive imposition.
If FDI projects invest in social sectors like education, health and culture, Vinh Phuc will use the budget to support land compensation and site clearance for them. After domestic investment projects obtain approval from the Prime Minister, the province will fund the cost of preparing documents for direct investment projects subject to investment priorities like supporting industries for automobile, motorcycle, electronics and telecommunications industries; high-tech agriculture; and ecotourism. The province has also set aside the support budget for some items in industrial parks, especially site clearance for industrial park construction and worker housing.
In addition to the above incentives, Vinh Phuc assists industrial parks to train workers and provides labor information for industrial parks; and helps farmers to get training for factory jobs. Every year, the province invests a lot of money to train workers for industrial parks both in the short term and in the long term.
By Nguyet Tham, Vietnam Business Forum