DECREE 82 ON NEW CONCEPTS OF INDUSTRIAL PARKS AND THEIR INCENTIVES

LEGAL UPDATE

Decree No. 82/2018/ND-CP on the management of industrial parks and economic zones (Decree 82) entered into force on 10 July 2018, and replaces Decree No. 29/2008/ND-CP, Decree No. 164/2013/ND-CP and Decree No. 114/2015/ND-CP (Decree 29).

The most interesting points of Decree 82 are the introduction of new concepts, such as the auxiliary industrial zone, or supporting industry zone, and the eco-industrial zone, and some provisions related to incentives.

Hereafter we will set out the most important changes.

1. Concept and Definitions

Decree 82 gives the following definitions:

Industrial Park (IP) is an an area enclosed by definite boundaries, specialises in the production of industrial goods and the provision of services satisfying the needs of industrial production, and established in conformity with legal conditions, procedures and processes.

Export Processing Zone (EPZ) is an IP intended for manufacturing of exported goods, rendering of services meeting the needs of the production of export goods.

Eco-industrial Zone (EIZ) is an IP in which enterprises are required to engage in cleaner production, make effective use of natural resources, and enter into manufacturing cooperation and affiliation to tighten industrial symbiosis to promote economic, environmental and social efficiency in these enterprises.

Auxiliary Industrial Zone (AIZ) is an IP specialising in manufacturing auxiliary industrial products and rendering services satisfying the needs of manufactures of these products.

2. Incentives

2.1 Economic Zone

Under Decree 82, economic zones (EZ) located in areas facing extreme socio-economic difficulties as defined in the Law on Investment can be granted incentives applicable to such areas. Investment projects on the development of the IP infrastructure in these areas may be entitled to receive financial support from the Vietnamese government.

2.2 AIZ

Projects on the infrastructure development of an AIZ, including subzones, may be entitled to tax exemption and reduction of land rent, a land lease term of up to 70 years, and priority access to loans from the Vietnamese State, ODA funds, foreign loans under Government’s guarantees and other kind of loans and will be offered to be on the list of national important projects for possible investment partnerships.

Investment projects located in the AIZ that are related to manufacturing supporting industry products, as listed in Decree No. 111/2015/ND-CP of 3 November 2015, may enjoy tax incentives related to CIT, export and import duties, and will have priority to participate in training or assistance programs for start-ups and small and medium enterprises, and relevant other programs of competent authorities.

2.3. Eco-enterprises

Eco-enterprises in EIZs may enjoy preferential loans from the Vietnam Environment Protection Fund, Vietnam Development Bank, and/or other financial sources related to clean industry. They will also have priority in participation in technical support or investment enhancement programs, and will be given priority in providing information related to the technology market and the possibility of cooperating in effecting industrial symbioses in the scope of production and business activities of these enterprises.

3. Exit, Entry, and Travel in Economic Zones

Under Decree 29, only commodities’ owners and owners of means of transport could carry their commodities and means to neighbouring countries for the loading and unloading of goods, by presenting border laissez-passers or other legitimate documents issued by competent Vietnamese authorities. However, Decree 82 allows drivers to do the same.

4. Export-Processing Enterprises

Under Decree 82, branches of an Export Processing Enterprise (EPE) are entitled to have the operational system as applied to the EPE when the branch is separated from the outside area by a fence, has ports, entrance and exit doors, and fulfils the requirements concerning supervision and control by customs authorities and related functional agencies. This option was not set out in Decree 29.

For more information, please contact:

Mark Oakley / Managing Partner

mark.oakley@acsvlegal.com

Hieu Pham / Special Counsel

hieu.pham@acsvlegal.com

© 2018 ACS Legal Vietnam Company Limited – All rights reserved

This legal update is not an advice and should not be treated as such.

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