What Are the Advantage of Foreign Investors in Setting up
Business in Vietnam in 2023?
Located in an important position of Southeast Asia, Vietnam has a
long coastline of more than 3,000 km. With a diverse geographical structure
interspersed with mountainous, highland and coastal areas suitable for general
economic zones, Vietnam has ideal conditions to develop the trade and tourism
industries. When setting up business in Vietnam,
investors can enjoy financial advantage such as corporate income tax, import
and export tax and land finance incentives.
Incentives on corporate income tax: In recent years, Vietnam has
gradually reduced the corporate tax rate (CIT). In the 2004-2008 period, CIT
was 28%, in the 2009-2013 period it was 25%, from 2014 to 2015, 22% and from
January 1, 2016 until now, 20%. In addition, the provision of high corporate
income tax incentives for a number of key fields that need to be encouraged for
investment has contributed to attracting investment, encouraging business,
creating favorable conditions for enterprises to increase accumulation,
increase investment in the economy, and promote growth, hence promoting
investors in setting up company in Vietnam.
Import and export tax incentives: The 2016 Import and Export Tax
Law has added regulations that high-tech enterprises, science-technology
enterprises, science-technology organizations are exempted from import tax on
raw materials, materials and components that cannot be produced domestically
within 5 years from the date of commencement of production. There are also
import and export tax incentives being applied such as:
(i) Exemption from import tax for goods imported for processing
for foreign countries and when exporting and returning products to foreign
parties, they are exempt from export tax;
(ii) Goods imported for processing that are exempted from tax,
goods temporarily imported for re-export and goods being raw materials and
supplies in service of the production of exported goods can be extended the tax
payment time to 275 days from the date of filing the customs declaration; goods
temporarily imported for re-export may be extended the tax payment time to 15
days from the expiration date;
(iii) Exemption from import tax on goods to create fixed assets
for investment projects in areas of special investment encouragement,
investment promotion fields and investment projects in the locality have
difficult socio-economic conditions.
Incentives on land finance: Foreign enterprises investing in
Vietnam can be applied adjusted reduce rate (%) calculating the general land
rent from 1.5% to 1%. In addition, the State also stipulates the application of
the land price adjustment coefficient in determining the land price to
calculate the land rent, therefore, making Vietnam increasingly becoming a
favourable destination to attract foreign investment and company establishment
in Southeast Asia.
In addition, the development of a transparent and consistent
investment legal system is increasingly becoming a good tool to promote foreign
direct investment inflows into Vietnam in the spirit of the state ensuring the
rights of the investors’ ownership, investment capital and other interests of
foreign organizations and individuals, creating favorable conditions and
simplifying procedures for such organizations and individuals to invest in
Vietnam. Compared with the foreign investment laws of some countries in the
region, the law on foreign investment in Vietnam is considered by the
international public to be more open and attractive, for example applying the
form of 100% foreign capital ownership, administrative procedures are
simplified, non-discriminatory between Vietnamese enterprises and
foreign-invested enterprises. The law has been transforming in the direction of
considering investment and business as the matters of enterprises and
investors, which the investors have full authority to make decisions from
investment projects to the formation and business of the enterprise and that
the government only guides, creates an open legal environment, has favorable
mechanisms and procedures, supervises and enforce the law.
ANT Lawyers – a law firm in Vietnam will always follow up with
authorities for legal update on matters relevant to investment registration or
business setting-up in Vietnam.
Source ANT Lawyers:
https://antlawyers.vn/library/what-are-the-advantage-of-foreign-investors-in-setting-up-business-in-vietnam.html
