Management boards of medium and small sized industrial parks in Vietnam are offering different preferences to attract investment to their IPs, concluded a survey by the planning ministry of 124 IPs in 19 provinces nationwide.
One of the preferences that received the greatest attention from investors to is procedures to register and charges for leasing land at IPs. In Hanoi, the city people’s committee has authorised the Department of Land and Housing Administration to sign land-use right contracts with businesses entering IPs and to grant the latter with land-use rights for a duration of 50 years.
However, the people’s committee will be responsible for issuing certificate of investment preferences to these businesses. Investors investing in IPs in Hanoi shall enjoy the preferential corporate income tax rate of 15%, be exempt from corporate income tax for four years, and a reduction of 50% for nine consecutive years after the exemption period ends.
They are also given export bonuses if attaining high export revenue. For instance, a business may be paid 1% for every US$1 million worth of goods exported to foreign markets and 3% of the export value if the exported amount exceeds US$3 million.
Meanwhile, in other localities including Bac Ninh province in the north and Ba Ria-Vung Tau province in the south, people’s committees are responsible for formulating preferential land lease levels. They also give some other priorities including exemption of lend lease fees from 6-10 years and a reduction of 50% of land rentals until the operation of investment projects ends.
Almost all provinces and cities have made their own regulations on preferences given to businesses, which invest in IPs in their localities.
The investment preferences have created a relatively open investment environment throughout the country, helping some localities like Hanoi, Bac Ninh, and Ba Ria-Vung Tau, to prove themselves as attractive places for foreign investment.
However, investment experts said it is high time the government creates a uniform legal framework on investment preferences, especially in terms of land lease charges and preferential tax treatment to avoid unhealthy competition among localities nationwide in their race to attract foreign investment, which can negatively affect the country’s investment in general.