In recent years, Vietnam has become a magnet for high-tech investment, especially in the areas of mobile phones and mobile phone components, electronics, and software development. In step with the recent pronouncements of Vietnam’s leaders to continue promoting Vietnam as a leading destination for investment in this space, the government greeted the Year of the Pig by issuing a new decree setting forth strong incentives for investors in the science and high-tech sectors.
The new incentives were prescribed under Decree No. 13/2019/ND-CP (Decree 13). Under Decree 13, the incentives for investors include:
- Exemptions from and reductions of land rental;
- Corporate income tax incentives; and
- Preferential credit terms.
Specifically, the tax incentives may include up to four years of tax exemptions and a 50% tax break in the following nine years. Decree 13 also prescribes many credit incentives, and financial support from national science and technology development funds. By providing incentives for the commercialization of scientific and technological achievements, including incentives for import-export duties, free-of-charge use of equipment at national labs, and more, Decree 13 should help spur research and development activities.
Decree 13 provides detailed instructions on the process for obtaining a so-called “Scientific/Technology Enterprise Certification.” With this certification in hand, businesses can take advantage of the strong government incentives in Vietnam.
The new decree enters into effect on March 20, 2019. Decree 13 should encourage high-tech companies to consider relocating not only their manufacturing activities to Vietnam, but more research and development functions also.