Vietnam details Draft Law for Special Administrative - Economic Zones

HANOI - A draft of Vietnam’s new Law on Special Administrative - Economic Zones has been posted on the Government Portal for public review and commentary. It outlines the foundation for economic zones (SAEZs) located in Van Don (Quang Ninh Province), North Van Phong (Khanh Hoa Province) and Phu Quoc Island (Kien Giang Province).

In a Client Alert, lawyers Baker McKenzie say each SAEZ will specialise in developing certain industries, specifically as below:

1 Van Don SAEZ: Advanced technology; industries supporting advanced technology; eco-tourism, cultural tourism, and culture industry; air transportation and services auxiliary to air transportation; international commerce and consumption.

North Van Phong SAEZ: Precise information, electronics, and mechanics technology; international goods and passengers seaport; tourism; services auxiliary to seaport; commerce and finance.
Phu Quoc SAEZ: Wellness tourism; eco-tourism; international convention and exhibition centre; international commerce and consumption; assets management services; and healthcare.

Investment projects that are in line with the above specialised industries for each SAEZ will receive preferential treatment.

SAEZs investments are entitled to preferential treatment, and there will be special treatment for those qualifying as strategic investors (e.g. priority treatment in the processing of investment/business procedures and site clearance and compensation procedures; being allowed to select the investment project which more than 2 investors are interested in).

There will also be preferential treatment in land-use rights, which may be as long as 99 years, subject to the Prime Minister's decision.

Investors may be exempt from land and water surface rent for up to 15 years.

Certain products imported for the purpose of creating fixed assets, and imported products that cannot be manufactured in Vietnam may be exempt from import tax.

The standard enterprise income tax preferential treatment applicable would include a special tax rate of 10% for 15 years, tax exemption for four years and a 50% reduction for tax payment for nine years starting from the year taxable income is generated.

www.bakermckenzie.com (ATI).