Investment Law 2020 takes effect from January 1, 2021, replaces the Law on Investment No. 67/2014 / QH13, increasing incentives to investors, especially FDI investors in Vietnam.
Addition of investment incentives trades
Compared with the old regulations, the Law on Investment (amended) adding many investment incentives trades: innovation activities, production of goods or service provision participating in value chains, industry clusters, high-tech enterprises …
Investment incentives trades are added in the direction of focusing more on the high-tech field, production of new materials, clean energy, information technology products, …
Supplement forms and beneficiaries of investment incentives
Additional investment incentives:
- – Import tax exemption for goods imported to create fixed assets;
- – Exemption or reduction of land use levy, land rent, land use tax
- – Preferential corporate income tax, …
Some additional beneficiaries of investment incentives, in particular:
- – Investment projects for creative startups, innovation centers, research and development centers;
- – Investing and trading in the product distribution chain of small and medium enterprises; investing and trading in technical facilities to support small and medium enterprises, small and medium-sized enterprise incubators; investing and trading in co-working areas to support small and medium enterprises to start-up creations in accordance with the law on SME support.
These additions bring positive signals for FDI investors to Vietnam, when the Industrial Revolution 4.0 is a global trend.
Photo: Power Plus Technology Factory – one of Taiwan-invested smart factories designed and built by Delco.
In particular, the amended Law allows the Prime Minister to apply special incentives, up to 50% more than the highest rate under the current law, supporting investment projects with great impact to social economic development. This will be an attractive and timely policy mechanism to attract the rapidly moving FDI inflows today.
Administrative reform
According to Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, the new Investment Law has solved many problems in construction investment procedures for investment projects with “land use”:
- – Investors are not required to deposit or have a bank guarantee in case “the investor is allocated or leased land by the State to implement an investment project on the basis of receiving transfer of land use rights, properties on land of other land users.
- – Abolishing unnecessary administrative procedures, such as “approval of investment policy” procedures for projects with capital size from VND 5,000 billion, and some investment projects of individuals and households.
- – Adding the Ministry of Planning and Investment as the dossier-receiving agency for projects where investment policy approval falls under the competence of the National Assembly and of the Prime Minister. Thus, the process has been reduced by one step compared to the old Law on Investment.
The amendment of the Investment Law will reduce the time to apply for a license in many stages, improve a transparent and open investment environment, facilitating FDI attraction and economic development of Vietnam.
Source: Customs online newspaper, World and Vietnam online newspaper
