Foreign investors channelled $19.12 billion into the country in January-August. Photo: VNA

Deputy Prime Minister Pham Binh Minh has signed Decision No. 29/2021/QD-TTg on special investment incentives in accordance with clause 2, article 20 of the Law on Investment, according to the government portal.

The special investment incentives cover corporate income tax, land rents and water surface rents.

A preferential tax rate of 9% for a period of 30 years shall be applicable to incomes earned by business entities which implement investment projects eligible for special investment incentives with an investment capital of at least VND30 trillion and disbursing at least VND10 trillion within three years from the date of issuance of investment registration certificate or approval for investment guidelines.

A preferential tax rate of 7% for a period of 33 years shall be applicable to incomes earned by investing in the following projects:

(i) Projects on establishment (including the expansion of such project) of innovation centers and research and development centers with a total investment capital of at least VND 3,000 billion and disbursing at least VND 1,000 billion within three years from the date of issuance of the investment registration certificate or the approval for investment guidelines; or the National Innovation Center established under the Prime Minister's decision;

(ii) Investment projects eligible for special investment incentives with an investment capital of at least VND30 trillion and disbursing at least VND10 trillion within three years from the date of issuance of investment registration certificate or approval for investment guidelines. These projects must meet one of the following four criteria: High-tech projects (level 1), Vietnamese businesses participate in the value chains (level 1); added value accounts from 30-40 percent of the market prices of final products; and meeting criteria on technology transfer (level 1).

Electronic component production at a foreign-invested company. Photo congthuong.vn

A preferential tax rate of 5% for a period of 37 years shall be applicable to incomes earned from investing in the following projects:

(i) National Innovation Centers established under the Prime Minister’s decisions.

(ii) Investment projects eligible for special investment incentives with an investment capital of at least VND30 trillion and disbursing at least VND10 trillion within three years from the date of issuance of investment registration certificate or approval for investment guidelines. These projects must meet one of the following four criteria: High-tech projects (level 2), Vietnamese businesses participate in the value chains (level 2); added value accounts from more than 40 percent of the market prices of final products; and meeting criteria on technology transfer (level 2).

Vietnam may attract $30 billion in FDI this year

Vietnam may attract about $30 billion in foreign direct investment (FDI) in 2021, posting a year-on-year rise of 2%, economists forecast, cited by VietnamPlus.

According to the Ministry of Planning and Investment, foreign investors channelled $19.12 billion into the country in January-August, equalling nearly 98% of the same period last year, with several multi-billion USD projects.

Singaporean investors poured over $3.1 billion into the Long An LNG power plants No 1 and 2 while the O Mon 2 thermal power plant in Can Tho city invested by Japan received $1.31 billion in the period. The LG Display project in Hai Phong city has received additional investment twice this year, with $750 million in February and $1.4 billion in August.

At an assembly workshop of Ford Vietnam CO., Ltd in Hai Duong province. Photo: VNA

Despite social distancing measures to curb the spread of Covid-19, the country’s FDI inflow in the first eight months only saw a slight decline of 2.1 percent against the same period last year, said Nguyen Van Toan, deputy head of the Vietnam’s Association of Foreign Invested Enterprises.

Of note, new registered capital surged 16.3% and disbursement of FDI capital hit $11.58 billion, up 2%.

Speaking with Cong Thuong (Industry and Trade) newspaper, Phan Huu Thang, former head of the Vietnam Trade Promotion Agency (Vietrade) at the Ministry of Industry and Trade, voiced his belief that FDI inflow into Vietnam may still reach about $30 billion this year.

To address current difficulties facing foreign investors when they want to enter the country to study investment possibilities or to implement investment projects, the Government and relevant ministries and agencies are urged to consider reducing quarantine period for those who have been fully vaccinated and hold a negative Covid-19 testing certificate.

In the first eight months of this year, Vietnam attracted investors from 92 countries and territories. Singapore was the leading investor with registered capital exceeding $6.2 billion, or 32.5% of the total FDI inflow./.

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