In the context of economic development and attracting foreign investment, Vietnam continuously refines and updates its investment incentive policies, especially in the manufacturing sector within Industrial Parks (IPs). This article provides detailed information on the latest investment incentive policies for 2025.
I. Overview of Investment Incentive Policies
Investment incentive policies in industrial parks play a crucial role in attracting capital, promoting economic development, and enhancing the competitiveness of enterprises. These incentives are designed to create the most favourable conditions for investors, particularly in the manufacturing sector.
For example, the investment incentives in Hai Phong’s Nam Dinh Vu Industrial Park, Hai An, Hai Phong are applied as follows:
- A corporate income tax rate of 10% for 15 years, calculated continuously from the first year the enterprise has revenue from activities eligible for industrial park investment incentives and 20% in the subsequent years.
- Exemption from tax for 4 years, a 50% reduction in payable tax for the next 9 years, calculated continuously from the first year the enterprise has taxable income from the investment project; in cases where the enterprise does not have taxable income in the first 3 years from the time it has revenue from the investment project, the tax exemption and reduction period is calculated from the fourth year.
- Land use tax: 100% exemption of land tax throughout the project implementation period.
II. Tax Incentives in Industrial Parks
Clause 2, Article 16 of the 2020 Investment Law stipulates the sectors and regions eligible for investment incentives, including industrial parks. Accordingly, industrial parks are among the projects entitled to investment incentives as specified in Clause 1, Article 15 of the Investment Law.
Clause 1, Article 22 of Decree 35/2022/ND-CP also regulates investment incentives for industrial parks and economic zones, stating that industrial parks are areas eligible for investment incentives, enjoying the same incentives as regions with difficult socio-economic conditions as prescribed by investment laws.
1. Corporate Income Tax Incentives (Articles 15 and 16 of Decree 218/2013/ND-CP)
a. Preferential Tax Rates:
- Applicable Tax Rates: 10%-17%.
- Duration: 10 years.
- The applicable tax rate depends on the income generated from new investment projects in sectors specified in Clauses 1 and 3, Article 15 of Decree 218/2013/ND-CP.
b. Corporate Income Tax Exemption and Reduction:
- Tax Exemption Period: 2-4 years.
- 50% Tax Reduction: For the next 4-9 years.
- The application period depends on the income generated from new investment projects in sectors specified in Clauses 1 and 3, Article 16 of Decree 218/2013/ND-CP (as amended and supplemented by Clause 1, Article 16 of Decree 12/2015/ND-CP and Clause 6, Article 1 of Decree 91/2014/ND-CP).
2. Import Tax Exemption and Reduction (Point b, Clause 1, Article 15 of the Investment Law)
Import Tax Exemption: As prescribed by the laws on export and import taxes, applicable to:
a. Goods Imported to Create Fixed Assets (Article 14 of Decree 134/2016):
- Applicable Objects: Goods specified in Clause 11, Article 16 of the Law on Export and Import Taxes.
- Goods for project components eligible for investment incentives are exempt from import tax, provided they are allocated and accounted separately for direct use in the incentivized project components.
- Investment projects located in areas eligible for investment incentives but not in sectors eligible for investment incentives are exempt from import tax on goods imported to create fixed assets serving the production of the incentivized investment project.
b. Raw Materials, Supplies, and Components Imported for Production (Article 15 of Decree 134/2016):
- Application Period: 5 years from the start of production.
- The determination of products with a total value of resources, minerals, and energy costs below 51% of the production cost is based on Decree No. 100/2016/ND-CP and related guiding documents.
III. Land Policies
1. Land Rent Exemption and Reduction (Article 157 of the 2024 Land Law)
a. Land Rent Exemption (Article 39 of Decree 103/2024):
- During Construction: Exemption for up to 3 years from the date of the land lease decision.
- Post-Construction: Exemption for 3-15 years, depending on the production and business project as specified in Clause 3, Article 39 of Decree 103/2024.
b. Land Rent Reduction (Article 40 of Decree 103/2024):
- Reduction Rate: 50% of annual land rent throughout the lease term.
- Conditions: Applicable to investment projects under the public-private partnership method in sectors and areas eligible for investment incentives according to the list of sectors and areas eligible for investment incentives; sectors and areas with special investment incentives; and areas with difficult or especially difficult socio-economic conditions as prescribed by investment laws.
2. Preferential Land Lease Term (Clause 4, Article 202 of the 2024 Land Law)
- Land Use Term: Aligned with the investment project’s operation duration.
- If the project’s operation duration exceeds the remaining land use term:
- An adjustment of the land use term must be requested to align appropriately.
- The total land use term shall not exceed 70 years.
- Land use fees or land rent must be paid for the area with the adjusted land use term.
IV. Support for Manufacturing Investment
1. Labor Training Support
- Enhancing Professional Skills: Industrial parks often require a highly skilled workforce in fields such as mechanics, electronics, information technology, etc. Supporting labor training helps workers improve their professional skills, ensuring they can operate machinery, and equipment, and perform tasks efficiently.
- Training According to Business Needs: Training programs can be designed to meet the specific needs of businesses within the industrial park. This helps minimize the gap between theory and practice, creating a workforce capable of working immediately upon recruitment.
- Ensuring a Safe Working Environment: Training workers on labor safety rules and environmental protection is also an indispensable part. This training helps minimize workplace accidents and ensures compliance with safety regulations, protecting workers’ health.
- Creating Career Development Opportunities: Supporting labor training not only helps businesses have a competent workforce but also creates career development opportunities for workers, retaining talent, and reducing employee turnover.
2. Technology and R&D Support
Technology Support:
- Access to Advanced Technology: The government and organizations within industrial parks can support businesses by providing resources, technological infrastructure platforms, or support packages to apply technology in production.
- Technology Training and Consulting: Businesses in industrial parks can be provided with training programs on new technologies, helping them improve production and management capabilities.
- Improving Production Processes: Technology support helps businesses improve production processes, increase productivity and product quality, thereby enhancing market competitiveness.
R&D (Research and Development) Support:
- Encouraging Innovation: Industrial parks can promote R&D activities by providing research support funds, and collaboration programs between businesses and research institutes, and universities. This helps businesses research and develop new products or production processes.
- Creating a Collaborative Environment: Industrial parks often create a collaborative environment among businesses in the same industry, helping them share knowledge and experience, and thereby promoting R&D activities.
- Financial and Facility Support: Financial support or facilities (such as laboratories, and specialized equipment) can help businesses in industrial parks implement R&D projects, reducing risks and costs in developing new products.
3. Marketing and Trade Promotion Support
Marketing Support:
- Building the Industrial Park’s Brand: Industrial parks can assist businesses in building and promoting their brand through focused marketing strategies, thereby increasing recognition and attracting customers and partners.
- Promoting Products and Services: Industrial parks can coordinate events, seminars, and exhibitions for businesses in the area to showcase products, and connect with potential customers and business partners.
- Marketing Technology Transfer Support: Providing training and consulting services on marketing for businesses, helping them apply modern and effective marketing strategies, thereby enhancing competitiveness.
Trade Promotion:
- Creating Opportunities for International Cooperation: Industrial parks can help businesses participate in international trade promotion programs, creating favourable conditions to export products, access new markets, and expand customer networks.
- Building Support Networks: Providing services to connect businesses with partners domestically and internationally, such as trade organizations, and industry associations, to promote business opportunities.
- Supporting Participation in Fairs and Exhibitions: Industrial parks can assist businesses in participating in trade promotion events such as fairs, and exhibitions domestically and internationally, helping them enhance trade and showcase products.
V. Conclusion
The investment incentive policies in industrial parks in 2025 demonstrate the strong commitment of the Vietnamese government in attracting investment and developing the industry. Investors need to thoroughly understand and fully utilise these incentives to optimise investment efficiency.
Contact us for a detailed consultation on investment incentive policies:
Hotline: +84 93 7215585
Email: [email protected]
Website: luatminhnguyen.com or hmlf.vn