Reference situation:

A technology company would like to implement an investment project in a high-technology zone in Hanoi in the research and development sector. This company would like to consult lawyers about legal problems relating to investment incentives that the company is entitled to in this project.

Our legal advice:

Under Annex I, Decree No. 118/2015/ND-CP, research and development activity is subject to special conditional business, accordingly, the company will not only enjoy the general investment incentives under Circular 83/2016/TT-BTC and Circular No. 81/2018/TT-BTC, but also enjoy the special incentives in the high-tech zone under Decree No. 74/2017/ND-CP and Circular No. 32/2018/TT-BTC. In particular, the company will enjoy the following incentives:

1. Corporate income tax incentive

– If the company implement a new investment project with the investment capital less than VND 4 trillion, the company will be subject to the tax rate at 10% within 15 years, be exempted from tax no more than 4 years and be reduced by 50% of the paid tax within the 9 following years.

– If the company implement a new investment project with the investment capital from VND 4 trillion or higher, the company will be subject to the tax rate at 10% within 30 years, be exempted from tax no more than 4 years and be reduced by 50% of the paid tax within the 9 following years from the year on which the company have taxable income.

2. Non-agricultural land use tax incentive 

The company must sub-lease the land in the high-tech zone from a company developing the infrastructure in such zone. Therefore, in theory, the company must not pay the tax on non-agricultural land use, except for the company is obliged to do so in the contract between the company and the development company. However, as research and development activity is subject to special conditional business, the company must not pay the tax on non-agricultural land use under clause 1 Article 9 of Law on non-agricultural land use tax.

3. Import duties incentive 

– The company is exempted from import duties in respect of goods imported to form fixed assets

– If the raw materials, components, and supplies, which are not able to produce in Vietnam, are imported to implement the project on goods production of the company, the company will be exempted from import duties in respect of such raw materials, components and supplies within 5 years from the date on which such raw materials, components, and supplies are produced (except for the projects on production of cars, motorbikes, air conditioner, electric fan, dishwasher, player audio system, electric iron, kettle, hairdryer, hand dryer and other goods decided by the Prime Minister).

4. Immigration and management of foreign employees

– Investors, experts and employees who are Vietnamese residing abroad, foreigners and their relatives (their father, mother, spouse and children aged less than 18 years old) will be considered for receiving a visa for entry and exit of Vietnam. This visa will be used in many times with the appropriate time subject to their working time at the high-tech zone.

– The head of the management board of the high tech zone can decide on the issuance of APEC businessman card for the Vietnamese residing abroad, or foreign experts, who are working in the high-tech zone under Law on Enterprise and Law on Investment.

– The management board of the high-tech zone, at the authorization of the Ministry of Labour – War Invalids and Social Affairs, can issue the work permit for Vietnamese residing abroad, and foreign experts under simplified procedures.

– The head of the management board, under the authorization by the Chairman of Provincial People’s Committees, can approve the plan on the use of foreign employees of companies operating in the high tech zone, and can approve of the use of foreign employees doing the jobs that the contractors operating in the high-tech zone cannot recruit.

This is the preliminary legal advice of Bizlawyer & Partners. Please do not hesitate to contact us through the following address should you have the demand to use our service. Bizlawyer & Partners looks forward to our cooperation. 

Bizlawyer & Partners Law Firm

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