Investors undertaking investment projects in economic zones are eligible for various state-sponsored incentives. These incentives are designed to encourage investment projects and promote stable, long-term investment and business development, fostering a transparent management framework to provide favorable conditions for both domestic and foreign investors to confidently invest in the production, and trade of goods, and services.
1. Definition of economic zones
The term economic zone is defined in Clause 13, Article 2 of Decree No. 35/2022/ND-CP dated May 28, 2022, which regulates the management of industrial parks and economic zones. According to this decree, an economic zone is a defined geographical area with multiple functional zones established to achieve goals such as attracting investment, developing the economy and society, and ensuring national defense and security.
Economic zones receive investment incentives, and these incentives are applied similarly to areas with particularly difficult socio-economic conditions as stipulated by investment laws. Investment incentives for economic zones are effective from the date of the economic zone’s establishment.
2. Tax and land rental incentives for investment in economic zones
|
Tax Type |
Preferential Tax Rate |
Regular Tax Rate |
Notes |
|
Corporate Income Tax
|
Preferential tax rate of 10% for 15 years |
20% |
Calculated from the first year of the new investment project, generating revenue in accordance with Decree No. 218/2013/ND-CP. |
|
Calculated from the first year during which enterprise earns taxable profits from the investment project, as per Decree No. 218/2013/ND-CP. |
||
|
Value Added Tax |
Entities exempt from tax as per the provisions of:
|
10% |
Based on Decree No. 100/2016/ND-CP. |
|
Special Consumption Tax |
Entities exempt from special consumption tax as defined in Article 3 of the Law on Special Consumption Tax, and Clause 2 of Article 1 of the Law amending and supplementing several articles of the Law on Special Consumption Tax. | As specified in Decree No. 108/2015/ND-CP and Circular No. 195/2015/TT-BTC. | |
|
Land and Water Surface Rent |
|
Based on Decree No. 46/2014/ND-CP, Decree No. 31/2021/ND-CP, and Decree No. 35/2017/ND-CP. |
Based on the analyses presented above, leveraging the favorable policies, especially tax incentives, and aligning with their needs and objectives, foreign investors find it easier to choose investment activities within economic zones. By integrating various investment and business activities, they can maximize the benefits of their investments and establish a clear trajectory for business investment in Vietnam. Capitalizing on the full spectrum of investment incentives, including tax benefits, will contribute to the successful development of foreign investors’ businesses.
