New regulations on investment incentives in the 2014 Investment Law, such as a list of sectors offering investment incentives and investment incentive procedures, which are guided by Decree No 118/2015/ND-CP, came into effect on December 27, 2015.

1. Procedures to verify investment incentives

According to the 2014 Investment Law, for projects obligated to apply for an investment certificate, the competent authorities shall confirm and record the incentives into the said certificate.

Projects obligated to apply for an investment certificate include:

1. Investment projects of foreign investors;

2. Investment projects of economic organisations having foreign investment in the following ratios:

a) Foreign investors holding 51 per cent or more of the charter capital or the majority of partnership members are foreign nationals for economic organisations being partnership companies;

b) The economic organisations regulated in Section A above holding 51 per cent or more of the charter capital;

c) The foreign investors and economic organisations regulated in Section A above holding 51 per cent or more of the charter capital.

On the contrary, for projects not obligated to apply for an investment certificate, the investors will independently decide the incentives and carry out the investment incentive procedures with the tax, financial and customs authorities.

Projects not obligated to apply for an investment certificate include:

1. Investment projects of domestic investors;

2. Investment in forms of capital contribution, share purchase and capital contribution of economic organisations;

3. Investment projects of economic organisations having foreign investment, but not included below:

a) Foreign investors holding 51 per cent or more of the charter capital, or the majority of partnership members are foreign nationals for economic organisations being partnership companies;

b) The economic organisation regulated in Section A above, holding 51 per cent or more of the charter capital;

c) The foreign investors and economic organisations regulated in Section A above, holding 51 per cent or more of the charter capital.

2. Subjects entitled to investment incentives

According to the 2014 Investment Law and Decree No 118/2015/ND-CP, apart from new and extended investment projects within the fields entitled to investment incentives and within investment incentive areas, the following projects will also receive investment incentives if:

– Investment projects have capital of VND6 trillion (US$266 million) or more and disburse at least VND6 trillion within three years from the date of receiving the certificate of investment registration or from the issue date of decision of investment policies with regard to projects not subject to the certificate of investment registration. The said projects will receive investment incentives as regulated, if they take place in areas with exceptional economic and social difficulties;

– Investment projects in rural areas employing 500 or more workers (not including part-time workers and workers with labour contracts of less than 12 months). The said projects are entitled to investment incentives as regulated, if they take place in areas with economic and social difficulties;

– High-tech enterprises, scientific and technological enterprises, scientific and technological organisations under high technology laws and science and technology laws.

3. Category of sectors offering investment incentives and investment incentive areas

Decree No 118/2015/ND-CP consists of the following changes in the category of sectors offering investment incentives and investment incentive areas:

1. Sectors with special incentives: expansion of high-tech products and high technologies entitled to incentives in accordance with the decision of the Prime Minister (Decision No 66/2014/QD – TTg effective from January 15, 2015); and new sectors are added into the category, such as those producing energy from waste materials, building social houses and resettlement houses and producing methadone.

2. Other sectors included in the fields entitled to incentives: only sectors of people's credit funds and microfinance institutions.

3. Investment incentive areas tend to expand. The following cities in the northern provinces, such as Bac Can, Cao Bang and Son La, are areas entitled to investment incentives.