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NATIONAL ASSEMBLY SOCIALIST REPUBLIC Of VIETNAM
THE NATIONAL ASSEMBLY
Of THE SOCIALIST REPUBLIC Of VIETNAM
9TH LEGISLATURE, 5TH SESSION
(from 26 May to 23 June, 1994)
PROMOTION Of DOMESTIC INVESTMENT
- - To mobilize and make effective use of all capital, natural labour resources and other potential of the country with a view to making contribution to the socio-economic development for the cause of a rich people, powerful country, equitable and civilized
- - Pursuant to the Article 84 of the Constitution of the Socialist Republic of Vietnam in 1992;
- - This law provides on promotion of domestic investment.
- Article 1
The State protects and encourages Vietnamese organizations, citizen, Vietnamese residing abroad, foreigners who reside for a long duration in Vietnam to invest in different socio-economic fields on the territories of Vietnam according to the law of Vietna
The Government shall provide details concerning the investment of the Overseas Vietnamese and foreigners who reside for a long duration in Vietnam.
- Article 2
In this law, the following terms, shall have the meanings ascribed to them hereunder:
- 1. "Domestic investment" means to put capital in production, business - operation in Vietnam of the organizations individuals provided in Article 1 of this law.
- 2. "Investor" means organization or individual provided in Article 1 of this law directly put their capital to carry out the investment as provided in Article 4 of this law.
- Article 3
Investment capital shall be Vietnamese currency ; convertible foreign currencies ; gold, silver, precious stone ; transferable deed ; plant, buildings, equipment, machines, other means of production or the value of land-use right, industrial property righ
t which are used for the investment in Vietnam.
- Article 4
Sphere of a application of the investment according to this law shall include:
- 1. Investment for the establishment of productive and business units of all economic sectors;
- 2. Investment to expand scale and capabilities of production ; to carry out research and development and to renew technologies of the existing productive and business and business units;
- 3. To buy holdings of the enterprises ; to contribute capital to the enterprises including State - run enterprises which are permitted to diversify their forms of ownership.
INVESTMENT GUARANTEE AND ASSISTANCE
- Article 5
The State recognizes and protects the rights to property toward assets, investment capital, profit, other legal rights and interest of the investor.
- Article 6
Assets, investment capital and legal profit of the investor shall not be nationalized.
In the case of genuine necessity due to reasons of the national defense, security and interest, the State shall decide to apply a compulsory purchase or requisition of assets of the investor then the investor shall be paid or compensated in accordance wit
h market prices and the State shall create favorable conditions for the investor to invest in appropriate fields and areas.
- Article 7
The State shall implement the following measures to provide assistance to domestic investment activities:
- 1. To allocate land or put land for lease according to provisions of the law on land;
- 2. To carry out the construction of infrastructure of the industrial areas which will be put for lease to use as floor space for the construction of productive or business units;
- 3. To establish funds for investment assistance and encourage them to grant loans for mid-term and long-term investment. The Government shall provide the organization and activities of the funds for investment assistance;
- 4. To contribute capital through the funds for investment assistance, commercial banks, financial companies to productive and business units of all economic sectors on the basis of mutual benefit ;
- 5. To promulgate necessary provisions concerning sponsorship for investment credit of the banks, credit organizations and financial companies.
- 6. To provide assistance for the implementation of the programmes or services concerning investment promotion which consist of :
- a. Consultancies for management and business-operation;
- b. Legal consultancies;
- c. Organization of vocational training and training of technical specialists ;
- d. Training and enhancement of knowledge concerning management;
- e. Provision of economic information;
- f. Dissemination and transfer of technology ; creating favorable conditions for investors to use new technologies, with preferential fees, generated by the help of State budget.
- Article 8
The investor shall be entitled to employ foreign specialists, Vietnamese residing abroad to work for domestic investment project. The order and formalities concerning exit, entry shall be applied as the regulations on exit, entry of the foreigners who wor
k in the enterprise with foreign owned capital.
foreign specialist, overseas Vietnamese who work for domestic investment project shall be entitled to transfer abroad their income according to the system of foreign currencies management of the State of Vietnam after paying income tax according to the pr
ovisions of the law of Vietnam.
PREfERENTIAL TREATMENT fOR INVESTMENT
- Article 9
The following investment projects shall be given preferential treatment :
The Government shall determine the list of branches and professions of each field, state of the areas, technological standards and scale of use of the labourers which are entitled to enjoy preferential treatment for investment according to planning and di
rection for development of the State.
- 1. Investment in the fields of
- a. Afforestation, planting perennial trees on waste land, bare-hilly land ; aquaculture in virgin waters ; fishing at off-shore territorial waters.
- b. Construction of infrastructures ; development of public transport in urban areas ; development devoted to the cause concerning education, training, public health, national culture ; scientific and technological research works.
- c. Processing agricultural, forest and aquatic products ; provision of technical services which directly serve agricultural, forest and fishery production ;
- d. Production of goods for export;
- e. Industrial branches which are of priority in each period of socio-economic development ; traditional branches and professions.
- 2. Investment in ethnic minorities areas, highlands, islands and other difficult areas;
- 3. Investment for the establishment of productive units which will use advanced technologies and a great deal of labourers.
- Article 10
Apart from preferential treatments as provided in the enforced laws and ordinance on taxation, the investment projects provided in Article 9 of this law shall be entitled to enjoy other preferential treatments concerning taxation as follows :
The Government shall determine detailed rates of preferential treatment for investment.
- 1. Newly established productive and business units shall be allowed a fifty (50) per cent reduction of profit tax for an additional period from one to two years. The investment in ethnic minorities areas, highlands, islands and other difficult areas shal
l be allowed an exemption from profit tax for an additional period from one to two years, a fifty (50) per cent reduction of profit tax for an additional period from one to five years and a fifty (50) per cent reduction of turnover tax for an additional p
eriod from one to two years ;
- 2. Productive and business units which invest an additional capital or use the remaining profit to reinvest for the purpose of expanding production, raising productive capabilities and renewing technologies shall be exempted from profit tax for increased
part of the following year which is brought in by that reinvestment ;
- 3. Investment projects which are specially encouraged shall be allowed by the Government for exemption from import duty toward equipment, machines and accessories which are directly imported by the investor, or entrusted by the investor to import them for
the construction of productive units. In the case where the equipment, machines and accessories which are exempted from import duty are misused, the investor must pay back the amount of import duty which was exempted and the infringement must be settled
according to the provisions of the law;
- 4. Profit shared from the form Point 3, Article 4 of this law shall be exempted from income tax for a duration of three years commencing from the first time when profit is shared.
- Article 11
The investors who establish new productive and business units according to the provisions stated in Article 9 of this law which ensure efficiency shall be considered for a mid-term and long-term credit loan from the funds for investment promotion ; if th
e investors who establish new productive and business units which ensure efficiency in ethnic minorities areas, highlands, islands and other difficult areas, they shall be given priority for a mid-term and long-term credit loan with preferential interest
from the funds for investment promotion.
Establishments producing goods for export which are given priority for development shall be sponsored for credit loans and granted credit loans for export.
RIGHTS AND DUTIES Of THE INVESTORS
- Article 12
According to the law, the investors shall have the rights :
- 1. To select branches, professions and areas for their investment on Vietnamese territories ;
- 2. To select forms of investment ;
- 3. To enjoy preferential treatment as provisions of this law ;
- 4. To take initiatives in the activities concerning investment, production and business which were registered ;
- 5. To employ the labourers without limitation on quantity ; to pay wages on the basis of agreement with the labourers but the payment shall not be lower than minimum rate of monthly salary stipulated by the Government.
- 6. To travel abroad for implementation of the investment project according to the provisions of the Government.
- Article 13
The investors shall have the duties :
- 1. To operate their business according to the investment licence, to comply strictly legal provisions concerning accounting and statistical issues ;
- 2. To pay tax and to implement other financial liabilities according to the provisions of the law ;
- 3. To comply with the provisions of the law concerning the defence of the motherland, national security and social order.
- 4. To comply with the provisions of the law concerning the organization of trade union and other associations at enterprises and create favourable conditions for them to exercise their functions ;
- 5. To implement entirely duties stipulated in the law on labour
- 6. To comply with the provisions of the law on environmental protection and other regulations concerning the protection of places of historical, cultural interest and beauty spots.
- Article 14
In the case where the investor is replaced by a new one in the period he is still entitled to enjoy preferential treatment and if the new investor continues to implement that investment project, he shall be apparently entitled to enjoy preferential treatm
ent in the remaining period and be responsible for right implementation of the duties in order to enjoy preferential treatment for investment project which was registered.
- Article 15
In the case where the investor have no longer adequate conditions to enjoy preferential treatment according to the provisions of this law, then a part or the whole preferential treatment which were accepted shall be withdrawn.
- Article 16
Vietnamese residing abroad who implement the investment according to the provisions of this law shall be entitled to transfer abroad :
The Government shall provide concrete formalities for transferring abroad different items of money and assets stipulated is this Article.
- 1. Profit earned during the process of production or business-operation due to the use of investment capital which was legally transferred from abroad ;
- 2. Principal capital and interest loans from abroad during the process of production and business-operation ;
- 3. Investment capital which was legally transferred from abroad ;
- 4. Interest items and other assets under their legal property
- Article 17
When transferring profit abroad according to Point 1, Article 16 of this law, Vietnamese residing abroad shall be liable to pay an amount of tax equivalent to five (5) per cent of the total sum of money transferred abroad.
STATE MANAGEMENT ON PROMOTION Of INVESTMENT
SETTLEMENT Of INfRINGEMENT
- Article 20
The investor who has any deceitful deed to enjoy preferential treatment for investment of infringes upon other provisions of this law shall be liable to reimburse all preferential treatment items that he enjoyed and may be prosecuted for administrative or
criminal responsibilities, depending upon the degree of seriousness of the infringement, according to the provisions of the law.
- Article 21
Any person who takes advantage of his position, rights to hinder the investment, allow preferential treatment for investment without complying with the regulations or has any deed to molest the investor or infringes other provisions of this law shall be l
iable to compensate the losses and be disciplined or prosecuted for criminal responsibilities according to the provisions of the law, depending upon the degree of seriousness of the infringement.
PROVISIONS fOR IMPLEMENTATION
- Article 22
This law shall come into full force and effect from 1st January, 1995
Any provision, previously promulgated, contrary to this law shall be abrogated.
- Article 23
Productive and business-units which are entitled to enjoy preferential treatment for investment stipulated in Article 9 of this law and established before the law on promotion of domestic investment comes into effect, shall be entitled to enjoy preferenti
al treatment for investment for the remaining period according to the provisions of this law.
- Article 24
The Government shall provide details for the implementation of this law.
This law was approved by the National Assembly of the Socialist Republic of Vietnam at 5th session, 9th legislature on 22 June, 1994.
for the National Assembly
of the Socialist Republic of Vietnam
NONG DUC MANH