You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

April 2, 2018

Vietnam’s Third High-Tech Park Offers Incentives to Investors

Subscribe to Updates
Tilleke & Gibbins

With technology playing an increasingly crucial role in modern life, many countries are turning to the high-tech park model to promote science and technology and attract domestic and overseas investment. High-tech parks are strategically planned hubs connecting research and development activities with high-tech manufacturing and information-based services like software development, and often provide additional amenities like training centers and housing. These parks typically offer many incentives to companies to attract investment projects.

Vietnam established its first high-tech park, Hoa Lac Hi-Tech Park, in Hanoi in 1998, followed by Saigon Hi-Tech Park in Ho Chi Minh City in 2002. To push the development of science and technology in the Central region, a third high-tech park was established in Da Nang in 2010. Earlier this year, the Government of Vietnam issued Decree No. 04/2018/ND-CP on incentive regulations and policies for Da Nang Hi-Tech Park, which took effect on February 20, 2018. The new decree provides the following incentives, among others:

  • Incentives on corporate income tax (CIT): Companies operating new projects will be exempt from CIT for the first four years, then will enjoy a 50% reduction of the payable tax for the next nine years. A CIT rate of 10% will be applicable for 15 years (the normal CIT rate for outside enterprises is 20%); large projects valued at more than VND 3 trillion (USD 133 million) will enjoy such 10% CIT rate for 30 years.
  • Incentives on import duty: An exemption from import duty will be applied for the first five years for raw materials and accessories that cannot be domestically produced.
  • Incentives on land rental: Many high-tech projects are eligible for free land rental for the entire term of the investment project, and will only be required to pay construction costs, utilities, and other disbursements. For other projects, such as those related to training and logistics, the land rental exemption will be applied for an initial infrastructure construction period of up to three years. After such time, the projects may continue enjoying land-rent exemption for the next 15 or 19 years. In addition, Danang Hi-Tech Park will offer certain special projects an exemption from or a 50% reduction of the infrastructure use fee for the first two years of operation.
  • Other incentives: Companies with projects in the park will be given assistance in immigration procedures, housing for foreign expats, connecting with high-quality labor resources from top universities in Vietnam, and loan funding from local banks. The management board also provides a transparent one-stop administrative procedure to the projects located in the park.

Currently, there are 10 projects operating in Da Nang Hi-Tech Park, three of which are Japanese wholly invested projects and seven of which are projects of domestic investors. The new decree is expected to attract both domestic and overseas investors in high-tech industries, aiming to improve the economic development in Central Vietnam as well as to promote the efficiency and competiveness of high-tech goods and services in Vietnam.

Related Professionals

Practices

Corporate/M&A

Real Estate

Location

RELATED INSIGHTS​ 

March 25, 2024
Tilleke & Gibbins has provided an updated Thailand chapter for Fashion Law 2024 from Global Legal Post. The guide covers 20 key jurisdictions in the global fashion industry, offering insights into local legal frameworks surrounding issues such as brand enforcement and protection, e-commerce and marketing, and sustainability considerations. The Thailand chapter of Fashion Law 2024 provides detailed information on the following topics: Main intellectual property rights for fashion products Contractual arrangements in manufacturing, distribution, and advertising Regulations and enforcement of online marketing Unfair competition rules and judicial interpretation Specific regulations on sustainability and ESG in fashion Special import and export rules for fashion products The full Thailand chapter is available for free through the button below and on the Global Legal Post website. Tilleke & Gibbins also contributed the Vietnam chapter to the guide.
Read More
March 22, 2024
Laos has returned its value-added tax rate to 10% from the 7% rate that had been observed for the last two years. The new rate was specified in Ordinance No. 003/PDT, dated March 19, 2024, and announced on the website of the Ministry of Trade and Commerce. Prior to this, the last announcement of an adjustment in the VAT rate came in the last week of December 2021, when the Ministry of Justice published the Law Amending Certain Provisions of the Laws on Tax No. 01/NA, dated August 7, 2021, in the Government Gazette. This law, which entered into force in January 2022, amended the VAT rate from 10% to 7%. Under Lao law, the ordinance is effective from its date of signing by the president of Laos (i.e., March 19, 2024). However, the tax authorities have indicated that the new rate will not be enforced immediately but will be implemented in the near future, such as when it is published in the Lao Official Gazette. This change of the VAT rate to 10% does not come as a surprise. Some international experts and organizations had been recommending that Laos adopt a 10% VAT rate given its current economic challenges, arguing that Laos should prioritize collecting tax and replenishing the state budget. This was, for instance, recommended by the World Bank in the November 2023 Lao PDR Economic Monitor. Tilleke & Gibbins will continue to monitor the situation to determine when the 10% VAT rate will be enforced. For more details on the rate changes, or on any aspect of tax law in Laos, please contact Tilleke & Gibbins at [email protected].
Read More
March 11, 2024
Tilleke & Gibbins is pleased to announce the release of Company Directors in Thailand: Guidelines and Q&A on Duties and Liability. This publication is a go-to resource for prospective and existing company directors who need to understand the duties and liabilities that come with assuming this important corporate role. Authored by Kobkit Thienpreecha, partner and director of the firm’s corporate and commercial department, Company Directors in Thailand provides key information topics essential for companies and their directors to know as they engage in the Thailand market. In the guide, Kobkit, who regularly leads training sessions on directors’ liability for directors at many of the top companies in Thailand, gives an overview of directors’ role and responsibilities as well as the civil and criminal liabilities they could potentially face. This is followed by a Q&A section that directors frequently ask regarding their liability and the legal actions that could be brought against them. The full guide can be downloaded as a PDF through the button below.
Read More
February 28, 2024
Experts on real estate law from Tilleke & Gibbins provided the chapter on Vietnam for Practical Law’s Commercial Real Estate Global Guide 2024, a comparative jurisdictional guide in Q&A format giving a a high-level overview of real estate investment structures, restrictions on foreign ownership, and other important issues of real estate law. The main topics include the following: Real estate investment Title to real estate Sale of real estate Real estate tax Real estate finance Real estate leases Planning and development controls To read the Vietnam chapter, please visit the Practical Law website and enroll in the free Practical Law trial to gain full access.
Read More