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Land incentives for foreign investors


(12:03:25 PM, 20/09/2017)

Not only paying efforts to create a clean land fund, Vietnam is continuing to simplify its administrative procedures and studying land incentives, in order to "spread the carpet" to attract the foreign investors.

* Clean Land Fund –the first priority

Callingthe French high-tech enterprises to invest in Da Nang Hi-tech Park,in Paris, about 30 French businesses took part in a workshop on introduction of potential and investment opportunities in Da Nang Hi-tech Park, organized by the French Business Federation (MEDEF). Through this forum, French businesses willreceiveinformation about preferential investment incentives and policies as well asa number of projects whichare calling for investment in this park.

The leaders of Danang city confirmed that this is the third high-tech zone of the country, with a total planning area of over 1,100 hectares. At present, Da Nang Hi-tech Park has more than 300 hectares of clean land with full technical infrastructure ready for investment. The Park is always ready to welcome businesses to come, live and work for long time. This also explains why from early 2017, Da Nang Hi-tech Park has attracted seven projects with its total investment of 158 million USD.

Highly appreciating goodwill of Da Nang City, Chairman of the International Committee under MEDEF Ile-de-France,Michel Jonqueres is very optimistic about the opportunities for cooperation between the two sides, especially when the city asserted that the projects will receivethe best incentives on tax and renting land.

To improve the quality of investment, Ho Chi Minh City also graduallycarries out transparency of land fund and public auction. Accordingly, the city allows the use of urban development investment funds to compensate for clearance, creating clean land fund. The city will also evaluate the efficiency of more than 2,000 foreign investment projects to figure out the most potential projects and at the same time supplement "open" policies to foreign investment. Mr. Su Ngoc Anh, Director of Department of Planning and Investment, said that the Department will study on solutions to conduct auctions and land use with the highest transparency and effectiveness.

Many other provinces such as Binh Duong, Ha Noi, Hai Phong, Soc Trang, Thua Thien Hue, Ba Ria - Vung Tau, etc. also determine that their first priority in attracting foreign investment is creating clean land fund; ensuring no negative signsin land management, etc. In addition, some localities provide preferentials to foreign enterprises such as exemption of land renting fee for construction of common infrastructure facilities, the renting fee for the remaining land area is exempted for the first 15 years after the construction period. Besides, they can borrow up to 70% of the total investment capital from credit agencies together with many preferences related to enterprise income tax and personal income tax.

* More incentives will be expected

Foreign direct investment in Vietnam is expected to increase significantly when the Trans-Pacific Partnership Agreement and a number of other FTAs are implemented. In order to attract foreign investment capital (ODA, FDI, NGO) as well as domestic capital, the Government and localities are continuing to review and supplement many preferential policies.

At the beginning of 2017, the Government issued the Decree No. 01 amending some articles relating to land, which stipulates that if the enterprise can only compensates 80%, the remaining will be supported by the Government. Thus, creating land funds for businesses, including foreign investors, will be much easier than before.

In the long run, when the special administrative-economic draft law is approved by the National Assembly, foreigners will also receive many incentives when investing in Vietnam. Regarding land, the land use term may be increased up to a maximum of 99 years for investment projects related to research and development, healthcare, education and prioritized sectors.

Minister of Planning and Investment Nguyen Chi Dung also affirmed that it will build the institutions for special zones in the direction of increasing competence, increasing responsibility with many preferential mechanisms. The domestic and foreign organizations will be mortgaged assets attached to land at foreign credit institutions. Foreigners are also allowed to own houses, real estate, resorts withsome certain conditions.

Khanh Anh