Before conducting investment activities in Vietnam, investors need to learn about the special sectors that are eligible for investment incentives by the State of Vietnam such as tax rate incentives, and land use incentives to make decisions to ensure maximum benefits can be achieved, speed up the capital recovery process, shorten the time to market invasion.
Let’s find out with PLF the special preferential investment sectors following the current investment laws.
Special investment incentives sectors
According to the provisions of the Investment Law (2023) and Decree 31/2021/ND-CP, Vietnam currently has 32 sectors eligible for investment incentives divided into the following 4 main business groups:
|Sectors groups||Name of sectors|
|(I) High technology, Information technology, Supporting industries||1. Application of high technologies on the list of those prioritized for development investment according to decisions of the Prime Minister.|
|2. Manufacture of products on the list of hi-tech products encouraged for development under the decisions of the Prime Minister.|
|3. Manufacture of products on the list of supporting industry products prioritized for development according to the Government’s regulations on supporting industry development.|
|development; hi-tech application, research, and development by the law on high technologies; producti4. Hi-tech incubation or hi-tech enterprise incubation; venture capital for hi-tech on of biotechnology products; hi-tech human resource training; provision of hi-tech services.|
|5. Producing software products, digital information content products, key information technology products, and software services following the laws on information technology; producing cyberinformation security products and providing cyberinformation security services to meet the conditions prescribed by the law on cyberinformation security; Production of products formed from scientific and technological results by the law on science and technology|
|6. Producing renewable energy, clean energy, and energy from waste disposal.|
|7. Producing composite materials, light construction materials, and rare materials.|
|8. Manufacture of products on the list of key mechanical products under decisions of the Prime Minister.|
|(II) Agriculture||9. Planting, cultivation, protection, and development of forests, developing production forests in bare hilly and hilly lands, planting large timber forests and converting small timber plantations into large timber plantations; development of non-timber forest products, restoration of natural forests|
|10. Cultivation, treatment, and preservation of agriculture, forestry, and aquaculture products, processing non-timber forest products.|
|11. Production, propagation and crossbreeding of plant varieties, livestock breeds, forest plant varieties, and aquatic breeds, developing hi-tech forest plant varieties.|
|12. Production, extraction, and refining of salt.|
|13. Offshore fishing using advanced fishing gear methods; fisheries logistics services; construction of fishing shipbuilding and fishing shipbuilding facilities.|
|14. Marine rescue services.|
|15. Investing in research and manufacture of biotechnology products used for food.|
|16. Manufacture of wooden products; manufacture of artificial boards, including plywood, joinery planks, and MDF board.|
|(III) Environmental protection, Infrastructure construction||17. Collecting, treating, recycling, and reusing concentrated waste.|
|18. Construction and business of infrastructure of industrial parks, export processing zones, hi-tech parks, and functional areas in economic zones.|
|19. Investment in the development of water plants, power plants, water supply, and drainage systems; bridges, roads, infrastructure, transport and railway industry; airports, seaports, inland water ports; airports, terminals, railway stations, and other particularly important infrastructure works decided by the Prime Minister|
|20. Development of public passenger transport in urban areas.|
|21. Investment in construction, management, and operation of markets in rural areas.|
|22. Investment in the development, management and operation of technical infrastructure works of industrial complexes|
|(IV) Cultural, Social, Sporting And Medical||23. Construction of social housing, and resettlement housing.|
|24. Invest in business establishments implementing hygiene and disease prevention.|
|25. Scientific research on preparation technology, and biotechnology to produce new drugs, new veterinary drugs, vaccines, and biological products for veterinary use.|
|26. Production of medicinal materials and key drugs, essential drugs, drugs for the prevention and control of social diseases, vaccines, medical biological products, drugs from herbal ingredients, traditional medicines; the drug is about to have expired patents or related proprietary rights; applying advanced technology and biotechnology to produce medicines for human treatment meeting international GMP standards; manufacture of packaging directly in contact with the drug.|
|27. Investment in methadone production facilities.|
|28. Investing in the business of high-achieving sports training and coaching centers and sports training and coaching centers for people with disabilities; building sports facilities with training and competition equipment and facilities to meet the requirements for organizing international tournaments; training facilities, professional gymnastics, and sports competitions.|
|29. Invest in the business of geriatric and psychiatric centers, centers for treating patients infected with Agent Orange; care centers for the elderly, people with disabilities, orphans, and helpless homeless children.|
|30. investing in the business of centers for medical treatment – education – social labor; smoking cessation facilities; HIV/AIDS treatment facilities; public drug addiction treatment establishments; people-founded drug rehabilitation establishments; counseling and support points for community drug addiction treatment at the district level.|
|31. Investment in national museums and ethnic cultural houses; ethnic art performance troupes; theaters, studios, film production facilities, film-coated printing; fine arts – photography exhibition centers; manufacture and repair of ethnic musical instruments; maintenance and preservation of museums, houses of national culture and schools of culture and arts; base, craft villages to introduce and develop traditional industries and trades; investment in folk performing arts; investment in the National Library of Vietnam, public libraries of provinces and centrally-run cities and libraries play an important role.|
|32. Investment in facilities for community-based prevention and control of gender-based violence against sex workers|
Based on the above groups of business lines with special investment incentives, it can be seen that the State of Vietnam is focusing on economic development in the field of high technology to respond to the general trend of the world. In addition, the promotion of the development of traditional agricultural sectors, which are advantages of Vietnam but face many difficulties, above all, as well as ensuring infrastructure and living environment, and improving spiritual activities are also focused.
How to determine in detail the incentives of each sector
In addition to the provisions of the Investment Law (2020) and Decree 31/2021/ND-CP, to find out in detail investment incentives for each specific business line, investors, especially foreign investors, should note that investment incentives are also stipulated in bilateral or multilateral international treaties signed by Vietnam and the country of which the investor is a national.
Additionally, specialized laws will clarify the general policies on investment incentives stipulated in the Investment Law (2020), for example in the fields of tax laws, laws on land, or laws on the protection of environmental resources.
Whatever form investment takes, usually the ultimate goal is profit. Reducing costs and capturing investment incentives will help investors have more opportunities to shorten the payback period and promote business operations.
At PLF, we provide comprehensive and easy-to-understand advice for investors to easily access and properly understand investment incentives in each specific sector.