June 29, 2018

Decree 82 Expands Benefits of Industrial and Economic Zones in Vietnam

On May 22, 2018, the government of Vietnam promulgated Decree No. 82/2018/ND-CP on industrial and economic zones (Decree 82) replacing Decree No. 29/2008/ND-CP dated March 14, 2008, as amended by Decree No. 164/2013/ND-CP and Decree No. 114/2015/ND-CP (Decree 29). Decree 82 will come into effect from July 10, 2018. Below are some key changes of Decree 82 in comparison to Decree 29:

Export-processing enterprises are allowed to conduct the purchase and sale of goods and related activities in Vietnam

Under Decree 29, an export-processing enterprise was only permitted to carry out the purchase and sale of goods and other related activities in Vietnam if it established a branch separate from the export-processing enterprise, located outside the export-processing zone. Decree 82 gives such enterprises another option, which is to open a separate accounting book for revenue and expenses related to these activities in Vietnam, and arrange areas for storage of goods for such purchase or sale that are separated from those for production activities.

Broader interpretation of “industrial zone”

Under Decree 82, an “industrial zone” is defined as an area that is enclosed by definite boundaries, specializes in the production of industrial goods and the provision of services satisfying the needs of industrial production, and is established in conformity with legal conditions, procedures and processes. Industrial zones comprise not only export-processing zones (as in Decree 29) but also the newly defined “supporting industry industrial zones” and “eco-industrial zones.”

Supporting industry industrial zones are set aside for enterprises in supporting industries; i.e., enterprises specializing in manufacturing parts, materials, and accessories to be provided to manufacturers of finished goods, or rendering services for manufacturing such products.

Eco-industrial zones are for enterprises involved in clean/green production processes, making effective use of natural resources, and entering into cooperative arrangements and partnerships for manufacturing to promote economic, environmental, and social efficiency in these enterprises.

Incentive policies applicable to supporting industry industrial zones and eco-industrial zones

Investment projects for manufacturing supporting industry products may enjoy tax incentives as prescribed in relevant laws and regulations. Moreover, the enterprises will have the priority to participate in training or assistance programs for start-ups and small and medium enterprises, and other programs organized by competent authorities. It is worth noting that the supporting industry products must fall in the list of prioritized supporting industry products attached to Decree No. 111/2015/ND-CP dated November 3, 2015, on the development of supporting industries.

For enterprises in eco-industrial zones which are categorized as eco-enterprises, they may enjoy preferential loans from the Vietnam Environment Protection Fund, Vietnam Development Bank, and/or other financial sources related to clean industry. Moreover, eco-enterprises will receive priority to participate in technical support or investment enhancement programs and receive information on the technology market and cooperation opportunities.

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