OVERVIEW OF DONG NAI PROVINCE
Dong Nai has an advantage of geographical position in the Southern key economic zone, pertaining to the region of not much flood, storm and natural calamities. The annual average temperature goes between 250 and 260 with one dry season and one rainy season. Its rainfall is quite high with 1.500mm – 2.700mm. The form of topography mainly consists of high hills of which land structure has good compressible hardness (more than 2kg/cm²), make leveling, processing work‘s foundations not cost much expense as well as make favorable conditions for investment, development of industry and work construction with little expense.
Due to above-mentioned advantages, by 2010, Dong Nai has planned and developed about 10.000 hectares of land for concentrated industrial zones exclusive of small-scale industrial clusters of small industry and handicraft, of which, the Prime Minister approved 15 industrial zones of 4.751 hectare area. The infrastructure of these industrial zones have been constructed synchronously, arranged 55% of land areas and ready to welcome domestic and foreign investors. Dong Nai has a lot of agricultural potentiality. Land for agricultural use mainly includes basalt red soils that are appropriate for industrial trees and fruit-trees. Main trees are rubbers-tree (41,000 ha), coffee-trees (25,000 ha), cashews (42,000 ha), soy-beans (7,000 ha), maize (67,000), fruit-trees (20,000 ha)…
Dong Nai is one of the leading provinces in the whole country in producing food for cattle and possessing many breeding farms with industry scale and total herd of 76,000 cattle, 970,000 pigs, and 11 million heads of poultry. These sources of raw materials are important for processing industry. The infrastructure in Dong Nai is quite favorable compared to many other provinces in the whole country. It is because that Dong Nai is about 25 km far from Ho Chi Minh city, the investors in Dong Nai localities can use work of technical infrastructure and available system of services which belong to Ho Chi Minh city such as airports, wharfs, telecommunication system, hotels and other services
Electricity supply: using common source of electricity in the national grid. Allocation system of 15 KV was covered in 171 hamlets, communes, towns of the whole province, meeting needs of electricity supply sufficiently for investors.
Water supply: capability to supply water in Dong Nai reached 290,000m3/day. By 2010, it reached 485.000m3/day which was enough to supply water for urban inhabitants and industrial projects in industrial zones
Communication: telephone and telecommunication network in Dong Nai province can be communicated directly with domestic provinces and nations in the world.
Traffic and transport:
Dong Nai is situated in the traffic hub of nation, therefore enterprises in Dong Nai are convenient to transfer to localities in the whole country and foreign nations. In development plan, the government is planning to invest key infrastructure works such as: new airport in Long Thanh district, system of liquefied petroleum gas pipelines, highways: Ho Chi Minh city – Dong Nai – Vung Tau…
Dong Nai has great potentiality of mineral resources: surface water is plentiful, especially from Dong Nai River, with density of 880m3/s. Tri An Lake with area of 323km2 and capacity of about 2.8 million m3. The reserve of underground water is about 3 million m3/day which are enough to supply for production and daily life.
Besides, Dong Nai is plentiful with forest resources, granite mine, construction stone mine, clay, kaolin, puzzolan, sand, gravel… which are favorable conditions to supply construction material for works. Local human resources are copious with urban population of 670.000 inhabitants (occupied 3% of provincial population). The population at working ages of 1,100,000 inhabitants (occupied 54% of provincial population) has moderately good education level, is used to industrial style of work, capable of acquisition, adapts technology transfer to incessantly to raise effect and competitive ability.
INVESTMENT PROCEDURE
Dong Nai implements on-site one-door management mechanism via Board of Management of Industrial Zone (for projects located inside industrial zones approved by Government) and Department of Planning and Investment (for projects located in other areas).
1. Agencies to assist investment
Dong Nai implements on-site one-stop management mechanism through Board of Management of Industrial Zone (for projects located inside industrial zones approved by Government) and Department of Planning and Investment (for projects located in other areas). Investors only need to contact these authorities for being guided and supported on relevant matters.
2. Authority to issue investment certificate
- Ministry of Planning and Investment: Projects of group A, projects over USD 40 million (in industrial zone, export processing zone), projects over USD 5 million (outside industrial zone, export processing zone) and various kinds of projects investing in construction of highways and railways; production of cement, metallurgy, electricity, sugar, alcohol and beer, tobacco; production and assembly of automobiles, bikes; projects of tourism and travelling; projects related to cultural, educational and training fields; projects of supermarket construction and business.
- People’s Committee of Dong Nai Province: projects under USD 5 million invested outside industrial zone, export processing zone and are not within the competence of Ministry of Planning and Investment.
- Board of Management of Industrial Zones: projects under USD 40 million operated inside industrial zones and are not within the competence of Ministry of Planning and Investment.
3. Time-line for issuance of investment certificate
Time-line for issuance of investment certificate depends on project scale and sector but should not be longer than 45 working days from the day of receiving a valid file for investment registration (for those projects subject to the evaluation process) and not longer than 15 working days (for those projects subject to registration process).
AREAS CALLING FOR INVESTMENT
Dong Nai encourages to investment in industrial zones, industrial clusters which have been planned
1. Industrial zones
Dong Nai province encourages investment in industrial zones and industrial clusters which have been planned and being planned, especially it focuses on industrial zones approved on their preparation of infrastructure by the Government and mountainous industrial zones based on northern districts of the province.
2. Areas with difficult economic and social conditions (List B)
- Communes, townlets in Long Khanh Town and 4 districts: Tan Phu, Dinh Quan, Xuan Loc, Cam My (excluding communes in the following List C)
- Communes of Tri An, Phu Ly; Vinh An Townlet in Vinh Cuu district
- Commune route 25 in Thong Nhat district
- An Vien Commune in Trang Bom district
3. Areas with extremely difficult economic and social conditions (List C)
- Communes of Thanh Son, Phu Lap, Ta Lai, Daklua, Nam Cat Tien in Tan Phu district
- Communes of Phu Tan, Thanh Son in Dinh Quan district
- Suoi Cao Commune in Xuan Loc district.
- Communes of Song Nhan, Nhan Nghia in Cam My district
- Communes of Xuan Thien, Xuan Thanh in Thong Nhat district
- Communes of Song Thao, Doi 61, Song Trau (excluding Bau Xeo Industrial Zone) in Trang Bom district.
LAND-RENT LEVY AND LAND-RENT LEVY PREFERENCES
1. Industrial zones where enterprises invest into infrastructure
Industrial Zone Area Price of land rent with infrastructure (USD/year)
First five year From the sixth year on
Land price Fee of infrastructure Land price Fee of infrastructure
Amata 361 Negotiated price Negotiated price
Loteco 100 Negotiated price Negotiated price
Bien Hoa 1 335 0,80 0,40 0,80 0,40
Bien Hoa 2 365 2,25 1,00 2,25 0,50
Long Thanh 510 0,05 22USD/50 years 0,05 22USD/50 years
Tam Phuoc 323 Negotiated price Negotiated price
An Phuoc 130 Negotiated price Negotiated price
Go Dau 184 1,00 1,00 1,00 0,75
Song May 227 0,09 1,45 0,09 1,01
Ho Nai 230 0,09 1,45 0,09 1,01
Nhon Trach 1 430 0,09 1,45 0,09 1,01
Nhon Trach 2 350 0,09 1,45 0,09 1,01
Nhon Trach 3 720 0,09 1,45 0,09 1,01
Nhon Trach 5 302 0,09 1,45 0,09 1,01
Nhon Trach Garments 184
Dinh Quan 54
Note: Depending on area of project, land price can be adjusted with agreement from the enterprises that are investing infrastructure into industrial zones.
2. Other areas
In cities and towns, the land price ranks from 0.09 to 9.6 USD/m2/year depending on location, the other areas, where there is no infrastructure, land price is from 0.01 to 0.09 USD/m2/year, in which the popular price from 0.030 to 0.045 USD/m2/year. In rocky mountainous areas, bare hills, poor land areas, land price is from 0.003 to 0.010 USD/m2/year for projects that do not belong to the fields of industrial production, service, tourism, trade, mineral exploitation.
3. Land-rent levy reduction/exemption
Enterprises are exempted from land-rent levy in the period of basic construction
Enterprises are exempted from land-rent levy reduction/exemption in case that the enterprises face difficulties and have to stop project.
After the period of basic construction, enterprises are exempted from land-rent levy for 7 years (for projects invested in regions with soco-economic difficulties – list B, projects in list of branches and trades promoted by Vietnamese Government or in occupational list that is specially encouraged to invest into), exempted from land-rent levy for 11 years (for projects in regions with special soco-economic difficulties – List C).
INCENTIVES OF ENTERPRISE INCOME TAX
According to Decree 164/2003/NĐ-CP dated Dec 22nd 2003, Decree 152/2004/NĐ-CP dated August 6th 2004 by Government and Decision 53/2004/QĐ.TTg dated April 5th 2004 by Prime Minister.
2.1. In industrial zones, export processing zones, high-tech zones
Investment Fields Enterprise income tax
Services of Industrial zones A tariff of 20% is applied in 10 years. To get full remission in 2 years and remission of 50% for the 6 following years. From the 11th year, a tariff of 28% is applied.
Production in Industrial zones A tariff of 15% is applied in 12 years. To get full remission in 3 years and remission of 50% for the 7 following years. From the 13th year, a tariff of 28% is applied.
Services in Export Processing Zones A tariff of 10% is applied in 15 years. To get full remission in 3 years and remission of 50% for the 7 following years. From the 16th year, a tariff of 28% is applied.
Export processing enterprises in Industrial Zone or EPZ A tariff of 10% is applied in 15 years. To get full remission in 4 years and remission of 50% for the 7 following years. From the 16th year, a tariff of 28% is applied.
Invested projects belonging to specially promoted fields A tariff of 10% is applied in 15 years. To get full remission in 4 years and remission of 50% for the 9 following years. From the 16th year, a tariff of 28% is applied.
High technology enterprises invested into High technology Park A tariff of 10% is applied during the time the projects are in operation. To get full remission in 4 years and remission of 50% for the 9 following years.
2.2. The rest of localities
2.2.1. Tariff of incentive enterprise tax
- A tariff of 20% is applied in 10 years from the beginning of operation for projects of the fields promoted by the Government, or in areas mentioned in List B.
- A tariff of 15% is applied in 12 years from the beginning of operation for projects of the fields both promoted by the Government and in areas mentioned in List B or only in areas mentioned in List B.
- A tariff of 10% is applied in 15 years from the beginning of the operation for projects invested in the infrastructure of the industrial zones, the exported processing zones; projects of the specially promoted fields; projects of sickness examination and treatment, education and training and scientific researches; projects of the fields promoted by the Government and in areas mentioned in List C.
Once higher promotion is needed, the Government decides to apply a tariff of 10% during the time the projects are in operation.
(After the time of the incentive tariff application, the enterprises pay their taxes at a tariff of 28%).
2.2.2. Duration for exemption, reduction from Enterprise Income tax:
- New invested projects (no discrimination of invested fields and areas) get a full remission in 02 years, (from the day having income under tax) and a remission of 50% tax for the 02 following years.
- Projects on infrastructure development in IZ and PEZ get a full remission in 04 years, and a remission of 50% tax for the 07 following years.
- Projects of the models of BOT, BTO, BT; projects of specially promoted fields; projects of sickness examination and treatment, education and training and scientific researches get a full remission in 04 years and a remission of 50% tax for the 09 following years.
- Other cases, depending on the projects on the fields that are promoted by the Government, investment areas appertaining to List B, List C, or using ethnic labor will get a full remission from 2 to 4 years and a remission of 50% from 3 to 9 years.
- In addition, the Government will consider to have favorable treatment for the projects on investment of scale expanding, technology renovation, environmental improving, production ability upgrading; projects to have exported productions and some special cases as regulation.
- When paying tax, if the projects are at loss, the loss will be transmitted into the income under tax of the following years. The time for loss transmission is not more than 5 years...
INCENTIVES OF IMPORTED TARIFF
According to article 57, 58 in Decree 24/2000/NĐCP dated July 31st 2000 and Decree 27/2003/NĐ-CP dated March 3rd 2000
3.1. The enterprises will be under no imported tax for goods to make fixed properties, including:
- Equipment, machines;
- Specially made means of transport in the lines of technologies and for worker carriage (car of 24 seats or more, transportation of waterway);
- Parts, spare parts, disconnected organs, supporting items, patterns, contrivance, extra objects of equipment, machines, means of transportation and the specially made means of transportation as mention in clause b.
- Imported materials and means to make equipment, machines in the technology lines or to make parts and spare parts, disconnected organs, supporting items, patterns, contrivance, extra objects of equipment, machines;
- Construction materials that haven’t been produced in our country.
3.2. Imported materials to carry out projects with the models of BOT, BTO, and BT: races of plants and animals, special agri-medicine imported to carry out projects of agriculture, forestry, and fishery are under no imported taxes.
3.3. Enterprises investing in fields of hotels, offices, houses, services, travel… get remission as ruled in clause 1, except that equipment gets free imported tax once as the regulation.
3.4.. Enterprises investing in the extremely difficult areas (List C), or projects belonging to the specially promoted fields are under no imported taxes for production materials, means, parts and spare parts in 5 years, calculating from the day of operation.
3.5. Enterprises investing in parts, mechanical spare parts, electricity, electronic are under no imported taxes for production materials, parts in 5 years, calculating from the day of operation.
3.6. Materials, disconnected parts, extra objects and means imported to manufacture exported goods are under no imported
3.7. Goods and other means used for the specially encouraged investment fields as the Prime Minister’s decision are under no imported taxes.
3.8. Enterprises are temporarily delayed imported taxes for the imported materials and means used to produce exported products in a defined period. When the products are exported, the taxes on the imported materials and means are refunded with a rate corresponding to the rate of exported products.
INCENTIVES OF ADDED VALUE TAX
According to article 60 in Decree 24/2000/NĐ-CP dated July 31st 2000, Decree 27/2003/NĐ-CP dated March 19th 2000, article 7 in Decree 158/2003/NĐ-CP dated Dec 10th 2003 and Decree 148/NĐ-CP dated July 23rd 2004.
1. Enterprises are temporarily delayed imported taxes for the imported materials and means used to produce exported products in the period of delaying imported tax as regulations.
2. Enterprises are under no imported taxes for:
- Equipment, machines, specially made means of transportation in the line of technologies which haven’t been manufactured in our country to build fixed properties of the enterprises.
In cases of the line of equipment, synchronous machines in the categories of no value added tax, among which there are kinds of equipment, machines manufactured in our country, no value added taxes are applied for the whole line of equipment, synchronous machines;
- Construction means that can’t be manufactured in our country to make fixed properties of the enterprises.
- Imported materials to manufacture products to provide for the enterprises directly make exported goods.
3. A tariff of 0% for the exported goods and services
- Exported services include: services directly provided to organizations, individuals over sea and services used outside the border of Vietnam; services provided to processing and exporting enterprises (except international transportation, goods, services directly provided to international transportation; services of over sea travel; services of re-assurance to abroad; credits, financial investment, investing stock to abroad).
- Exported goods include: goods exported to abroad, goods exported to the processing and exporting zones and other specific cases are considered as exported as the regulation of the government (except exported products are natural resources of crude minerals).
4. Others, depending on the fields of operation, VAT includes 2 scales: 5% and 10%.
The tariff of 5% is mainly applied for goods and services in fields:
- Pure water for household use and production.
- Agricultural products, manufacturing agricultural products, products served in agriculture.
- Products served for culture, health care and education.
- Scientific and technological services.
- Coal, soil, rock, sand, gravel, basic chemicals, mechanical products, products of metallurgy, lamination, pull of ferrous and nonferrous and precious metals.
- Machines of automatic processing of data and their spare parts (including computers and their spare parts).
(Other goods and services are under a tariff of 10%)
OTHER INVESTMENT INCENTIVES IN DONG NAI
5.1. Implementing special investment incentives (Land-use tax exemption/reduction , land rent exemption/ reduction, support of infrastructure construction investment) for projects invested in poor communes, mountainous areas, rural and remote areas, ethnic minority area, branches and trades need to be promoted investment in the provincial region. Namely:
- Projects invested in areas of above-mentioned List C (no discrimination of invested fields and areas) are exempted from land rent within the renting period.
- Projects into industrial zones in districts: Tan Phu, Dinh Quan, Xuan Loc, Cam My and Long Khanh Town: will be exempted from infrastructure fee in 5 years from the day of beginning operation. In addition, if projects belonging to the promoted and specially promoted fields as defined by Government, are exempted land-rent levy during the time of renting land. Projects of the other fields are exempted from land-rent levy in 15 years since signing of land-lease contract.
5.2. Enterprises which rent land to build houses for their workers (no trade) are exempted from land rent levy in the period of leasing land