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COUNCIL Of MINISTERS SOCIALIST REPUBLIC Of VIETNAM
No. 322-HDBT Independence-freedom-Happiness
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Hanoi, 18 October 1991.
Pursuant to the Law on foreign Investment in Vietnam dated 29 December 1987;
In order to encourage and create favorable conditions for foreigners investing capital, advanced technology and industry in the industrial zones of Vietnam for the purpose of production of export goods, the effective exploitation of labor, and the develo pment of advanced technology and industry ;
On the proposal of the Chairman of the State Committee for Co-operation and Investment.
DECREES
Article 1
To promulgate in conjunction with this Decree, regulations on special export processing zones in Vietnam.
Article 2
Ministers, chairmen of the State Committees, heads of other bodies of the Council of Ministers, and chairmen of the people's committees of the provinces and cities under central authority shall be responsible for the implementation of this Decree.
Article 3
This Decree shall be of full force and effect as of the date of its signing.
for the Council of Ministers Vice Chairman
VO VAN KIET (Signed)
COUNCIL Of MINISTERS SOCIALIST REPUBLIC Of VIETNAM
Independence-freedom-Happiness
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Hanoi, 18 October 1991
(Issued in conjunction with Decree No. 322-HDBT of the Council of Ministers dated 18 October 1991) CHAPTER 1
General Provisions
Article 1
Special export processing zones are industrial zones under central authority which are dedicated to the production of goods for export and provision of services relating to the export of goods, which zones shall be established and administered in accordan ce with these regulations.
Article 2
Special export processing zones shall be established by the Government of Vietnam at locations convenient for the production of goods for export and for their actual export. The are of the zones shall be defined by a geographical border determined in acc ordance with the decision for their establishment.
Article 3
The Government of Vietnam shall ensure the fair and equitable treatment of investors who invest in special export processing zones.
The provisions which guarantee investment that are stipulated in articles 21, 22, 25 of the Law on foreign Investment in Vietnam shall also apply to investors who invest in special export processing zones.
Investors who invest in special export processing zones shall be entitled to all the privileges stipulated in these Regulations.
Article 4
Investors shall be permitted to operate within special export processing zones in the following areas:
1. Production, processing, and assembly of export products.
2. Providing services in relation to the above activities and to export.
Article 5
The following persons and organizations may invest in special export processing zones:
1. foreign economic organizations and individuals.
2. overseas Vietnamese (including individuals and economic organizations which are legal entities).
3. Vietnamese economic organizations from all sectors of the economy and which are legal entities.
Article 6
The management body of a special export processing zone is the management committee of a special export processing zone.
Article 7
The Government of Vietnam shall permit and encourage the establishment of joint venture enterprises between a Vietnamese party (or parties) and a foreign party (or parties) for the purpose of carrying on a business in relation to the construction of infra structure projects within a special export processing zone.
A joint venture enterprise which carries on the business of construction of infrastructures within special export processing zones shall be established and shall operate in accordance with the provisions of the Law on foreign Investment in Vietnam and Dec ree No.28-HDBT dated 5 february 1991 of the Council of Ministers. The rights and obligations of each enterprise shall be stipulated in the investment licence granted by the State Committee for Co-operation and Investment.
Article 8
Investment in a special export processing zones shall be subject to the following requirements:
1. In respect of a production factory: products are to be sold in foreign markets; priority shall be given to the employment of Vietnamese citizens and foreigners shall only be employed in respect of those jobs which Vietnamese workers are unable to per form; production shall not cause pollution to the environment.
2. In respect of service businesses such as transport, loading and unloading, repairs, insurance, banking: to provide effective support to import and export production activities in the special export processing zones.
Article 9
forms of investment in special export processing zones may include:
1. The establishment by investors of an enterprise with one hundred (100) per cent foreign owned capital.
2. The formation of a joint venture enterprise between a foreign party (or parties) and a Vietnamese party (or parties)
3. Contractual business co-operation between enterprises in special export processing zones, or between enterprises in special export processing zones and foreign organizations and individuals, or Vietnamese legal export entities in accordance with the provisions which govern relations between foreign enterprises and Vietnamese enterprises.
CHAPTER II
Enterprises of a Special export processing Zones
Article 10
An enterprise of a special export processing zones shall be established in the form of limited liability company.
An enterprise of a special export processing zones shall be a legal entity in accordance with the law of Vietnam and shall operate in accordance with the provisions of the Law on foreign Investment in Vietnam and the Regulations on Special export proces sing Zones.
Article 11
In order to establish an enterprise in a special export processing zones, the investors shall submit an application accompanied by the requisite information to the management committee of the special export processing zones. Within three months of its rec eipt of the application and accompanying information, the management committee of the special export processing zones shall notify the investor of its decision. Where the application is accepted the management committee of the special export processing zo nes shall issue the investor with a business licence and certificate of registration of the charter of the enterprises.
The information accompanying the application shall be registered with the management committee of the special export processing zone
Article 12
An enterprise established within a special export processing zone shall automatically have legal entity status following the issue of a business licence and certificate of registration of its charter issued b the management committee of the special export processing zone.
Article 13
The duration of operation of an enterprise within a special export processing zone shall not exceed fifty (50) years form the date on which the enterprise is issued with a business licence by the management committee of the special export processing zone.
Where the duration of operation of the enterprise has expired and the enterprise wishes to continue operating within the special export processing zone, it may apply to management committee of the special export processing zone for an extension to its op eration. Where the application is approved the enterprise shall not be required to re-register its charter.
Article 14
Enterprises of special export processing zone shall be permitted to conduct business in accordance with the provisions of the Law on foreign Investment in Vietnam, the Regulations on Special export processing Zones and the provisions contained in its bus iness licence.
Article 15
In accordance with the principle of autonomy in its business operations, enterprises of special export processing zones shall have the following rights:
1. To lease land located within the special export processing zone, build houses, plan and construct projects, and conduct business in accordance with the provisions of its business licence.
2. To use the infrastructure and the services provided by the special export processing zones and to pay fees in respect of that use.
3. To make decisions and plans for the organization of its business in accordance with the provisions of its business licence and charter.
4. To import equipment, raw materials, and other materials required for its business operations in accordance with the provisions of its business licence.
5. To export products to foreign markets, and provide services in relation to the export of products.
6. To fix the price of products and services on an agreement basis.
7. To employ workers and employees to work at the enterprise.
Article 16
Enterprises of special export processing zones shall have the following obligations:
1. To comply with the Regulations on Special export processing Zones, the Law on foreign Investment in Vietnam and the Laws of Vietnam.
2. To perform the financial obligations owed to the Government of Vietnam as stipulated in the Regulations on Special export processing Zones.
3. To open and maintain accounts at Vietnamese banks or joint venture banks between Vietnam and a foreign country or at branches of foreign banks operating in Vietnam.
4. To open books of account, and to record statistics in accordance with the laws of Vietnam.
5. To insure assets and other risks within their business.
6. To ensure labor safety and industrial hygiene, the protection of the environment and ecology of the special export processing zones, and the implementation of fire prevention measures.
CHAPTER III
Lease of Land, Building, Plan, and Capital Contraction
Article 17
The land located within special export processing zones is owned by the State of Vietnam.
Article 18
Investors shall be entitled to lease land within a special export processing zone for the purpose of construction of the buildings and plant necessary for their business.
Article 19
The term of a lease of land with a special export processing zone shall accord with the duration of the operation of the enterprise as stated in its business licence.
Article 20
Where the construction of buildings and plant requires the use of the land in stages, investors shall be permitted by the management committee to lease the total area of land required on the basis that all of that area shall be used within a maximum perio d of three years. Where, due to force major or other legitimate reasons, the enterprise does not complete its proposed plan of construction, it shall apply to the management committee of the special export processing zone for an extension of the duration of the construction period before the stipulated period expires.
Where the stipulated period expires and the duration of the construction period of the enterprise has not been extended, the management committee of the special export processing zone may recover the unused land, in respect of which the enterprise shall n ot be refunded rent paid.
Article 21
Investors may lease or buy buildings and plant constructed within a special export processing zone by the Government of Vietnam or by a joint venture enterprise engaged in the business of infrastructure construction.
Article 22
The construction of buildings and plant within a special export processing zone shall take place in accordance with the scheme and design of the special export processing zone.
Article 23
Investors may themselves build or accept tenders for the construction of buildings and plant. The tenders of Vietnamese constructions for a project shall be given priority.
Article 24
Measures shall be taken in respect of construction projects within special export processing zones to ensure quality, the supply and usage of water, fire prevention, fire fighting, and the protection of the environment and ecology.
Article 25
A joint venture company which carries on the business of infrastructure construction within a special export processing zone, and leases land, buildings and plant within the special export processing zone shall do so in accordance with the provisions of t he investment licence issued by the State Committee for Co-operation and Investment.
On the basis of the uniform scheme of the management committee of the special export processing zone, enterprises which conduct the visions of infrastructure construction may seek investment by other investors into the v for infrastructure projects and to lease buildings and plant.
CHAPTER IV
Entry to and Exit from Special export processing Zones
Article 26
Each special export processing zone shall be separated from the territory adjacent to the zone by a system of fencing with gates for the entry into and exit from the special export processing zone
Article 27
Investors, officials, workers and employees working within special export processing zones and other persons associated with the bodies, organizations, and enterprise operating within special export processing zones shall be permitted to enter into and ex it from special export processing zones.
Article 28
Vietnamese citizens and foreigners shall not be permitted to live inside special export processing zones. Where due to the needs of their work it is necessary for any of the above persons to live temporarily inside the special export processing zones thos e persons shall require the permission of the management committee of the special export processing zone.
Article 29
The entry to and exit from, travel and other activities within a special export processing zone shall be stipulated in the charter of the special export processing zone.
CHAPTER V
Labor Relation within Special export processing Zone
Article 30
Enterprises operating within special export processing zones shall, in recruiting employees, give priority to Vietnamese employees, and employ foreign employees only in respect of those jobs which the Vietnamese employees are unable to perform.
Article 31
Vietnamese workers who wish to work at enterprises within special export processing zones shall register in accordance with the Regulations on Special export processing Zones with the management committee of the special export processing zones. An enterpr ise operating within a special export processing zone may employ workers and employees who are registered at the management committee of the special export processing zone. An enterprise may assign to the labor supply company of the special export process ing zone the task of recruiting its workers and employees. An enterprise operating within a special export processing zone shall be permitted to publicize widely its specific requirements, in terms of the employees and workers it requires, which shall ena ble the Vietnamese who are suitable to register with the management committee of the special export processing zone.
Article 32
The amount of salary to be paid to Vietnamese workers and employees working at enterprises which operate within special export processing zones shall be agreed upon between the employees and a representative of the enterprise and recorded in a labor contr act.
Article 33
All provisions contained in the Regulations on Labor in Enterprises with foreign Owned Capital which are not inconsistent with the provisions of articles 31 and 32 of this Decree shall be applied to enterprises operating within special export processing z ones
CHAPTER VI
Export and Import of Goods and Services
Article 34
Equipment, means of transport, materials, goods (commonly referred to as goods, luggage and foreign currency) which are imported from foreign countries into a special export processing zone (direct or via the border ports of Vietnam) and from special expo rt processing zones to foreign countries (direct or via the border ports of Vietnam) shall be subject to customs inspection and control in accordance with provisions of the law on Customs and to the payment of customs duty.
Article 35
1. Goods of enterprises operating within a special export processing zone which are to be exported to, or have been imported from, foreign countries shall be subject to customs formalities at the customs office located within the special export processin g zones. Goods declared in the customs declaration shall be of a nature consistent with the visions licence and the charter of the enterprise.
2. The transport of export goods from the place of inspection by the customs office within the special export processing zone to the ports of Vietnam and the transport of import goods from the ports of Vietnam to the place of inspection of the customs of fice within a special export processing zone shall take place in containers, barrels, and bags affixed with the customs seal and escorted by customs officers.
Article 36
Goods of enterprises operating within special export processing zones which are sold or bought locally in Vietnam shall be regarded as goods of Vietnam imported from, or exported to, a foreign country subject to the laws on export and import of the Social ist Republic of Vietnam.
In this case the purchaser and the vendor shall comply with customs formalities within the special export processing zone and with the Law on Customs.
Article 37
1. The luggage and foreign currency of a foreigner working within a special export processing zone (including investors and foreigners working at enterprises which operate within a special export processing zone) which are brought to Vietnam upon the for eigner entering Vietnam and taken to a foreign country upon that foreigner leaving Vietnam shall be subject to the customs formalities at the customs office located at the appropriate ports of the Socialist Republic of Vietnam.
2. The luggage and foreign currency of foreigners passing between special export processing zones and the territory of Vietnam outside the special export processing zones shall be subject to customs formalities at the place of inspection of the custom of fices in the special export processing zone.
Article 38
Enterprises operating within special export processing zones shall be permitted to sign contracts with economic organizations belonging to all economic sectors within Vietnam for the processing of raw materials into finished products and for the provision of service in accordance with the provisions of the Government of Vietnam in relation to the processing of materials and the provision of services between Vietnamese enterprises and foreign enterprises.
Article 39
1. Customs formalities shall be conducted in public, quickly and politely.
Customs officers shall be responsible for assisting enterprises operating within special export processing zones to carry out customs formalities.
2. The customs inspection of goods and luggage carried out at a special export processing zone shall be carried out in the presence of the owner or legal representative of the owner.
3. The director of the customs office located within a special export processing zone shall have the power to request an extraordinary inspection of goods stored in a warehouse of an enterprise operating within that special export processing zone where h e reasonably believes that those goods have been illegally exported or imported.
4. The head of the customs office at each port and the higher authorities shall have the power to conduct a search in accordance with the provisions of the laws of Vietnam on customs where they reasonably believe that goods, foreign currency, or Vietnames e currency has been exported, imported, or brought out of, or into, a special export processing zone, illegally.
Article 40
Goods transported from one special export processing zone to another located within the territory of Vietnam shall be exempt from export and import duties and shall take place in containers and barrels affixed with tickets and the customs seal and escorte d by customs officers.
Article 41
Any act which is committed in breach of the provisions of this chapter shall, depending on the nature and degree of seriousness of the breach, be regarded as a breach of customs formalities, customs inspection and control, or as the smuggling or illegal t ransport of goods, foreign currency, and Vietnamese currency over the border, and he dealt with in accordance with the law on customs.
CHAPTER VII
Management of foreign Currency Exchange
Article 42
Any foreigner conducting business within a special export processing zone who brings foreign currency into Vietnam shall comply with customs formalities at the customs office located at the port of his entry into or exit from Vietnam and shall be permitte d to take with him any sums of foreign currency which remain unspent.
Article 43
Any foreign currency brought from the outside territory of Vietnam into a special export processing zone or brought from a special export processing zone into the outside territory of Vietnam shall be brought in compliance with the Regulations of the Soci alist Republic of Vietnam on foreign Exchange.
Article 44
Vietnamese dong shall not be circulated within a special export processing zone. All sales, purchases, payments, and assignments shall take place using freely convertible currency.
Article 45
Enterprises operating within special export processing zones which are exporting goods or providing services in return for foreign currency shall deposit the foreign currency into an account maintained at a bank. The expenses of enterprises shall be paid through the above account.
Article 46
foreigners investing in special export processing zones shall be permitted to transfer abroad the sums of money referred to in Article 22 of the Law on foreign Investment in Vietnam.
Article 47
foreigners working at enterprises operating within special export processing zones shall be permitted to transfer abroad their salary and legitimate revenue in accordance with article 23 of the Law on foreign Investment in Vietnam.
Chapter VIII
Accounts and Statistics Regime and financial Matters
Article 48
Enterprises operating within a special export processing zone shall apply the system of accounts and statistics stipulated in the Ordinance on Accounting and Statistics dated 10 May, 1988.
Article 49
Enterprises operating within a special export processing zone shall be subject to financial audit by a financial authority of Vietnam.
Pursuant to the requirements of the State Committee for Co-operation and Investment, the Ministry of finance, and the enterprises operating within the special export processing zone, auditing companies may conduct an audit of the enterprise.
Article 50
The account report of an enterprise operating within a special export processing zone shall be submitted to the management committee of the special export processing zone and the appropriate financial authority within three months from the end of the fina ncial year of the enterprise.
Article 51
1. Enterprises operating within special export processing zones shall pay profits tax as follows:
(a) Ten (10) per cent of profit in respect of a production enterprise.
(b) fifteen (15) per cent of profit in respect of service enterprise.
2. Enterprises operating within special export processing zones shall be exempted from payment of corporate profits tax as follows:
(a) Production enterprises shall be exempted for a period of four years from the year in which the enterprise begins to earn profit.
(b) Service enterprises shall be exempted for a period of two years from the year in which the enterprise begins to earn profit.
3. Companies carrying on the business of infrastructure construction within special export processing zones shall pay profits tax in accordance with the provisions contained in its investment licence.
4. Where investors reinvest profit earned back into an enterprise operating within a special export processing zone or within the territory of Vietnam for a period of three years or more, those investors shall be refunded by the tax authority the profits tax paid in respect of that profit which has been reinvested.
Article 52
1. Enterprises operating within special export processing zones shall be exempted from payment of import duty in respect of the import of equipment, materials, and goods from a foreign country to the special export processing zone, and shall be exempted from payment of export duty in respect of goods or products exported to a foreign country.
2. Goods produced or supplied from within special export processing zones which are sold to a domestic market abroad from a domestic market within Vietnam shall be subject to import and export duties in accordance with the law on import and export duties on commercial goods of Vietnam. (Specific provisions shall be made in respect of discarded material, defective products of enterprises within the special export processing zone which are sold to the territory of Vietnam and, food which is required for ev eryday living in the special export processing zones which has been brought from the outside territory of Vietnam into the special export processing zones)
Article 53
Houses and land located within a special export processing zone shall be subject to the payment of tax on houses and land pursuant to the law of Vietnam.
Article 54
Upon transferring their profits abroad, foreign investors shall pay tax on the transfer at a rate of five per cent of the total amount of profits transferred abroad.
Article 55
Workers working within special export processing zone shall pay income tax pursuant to the Ordinance on Income Tax of High Income Earners dated 27 November 1990.
Article 56
Enterprises operating within the special export processing zones shall be required to pay customs duties, duty on registration, stamp duties on certification, fees for the management and organization of the special export processing zones, and other rela ted fees in accordance with the provisions in force at the locality where the special export processing zone is located.
CHAPTER IX
State Organization and management of Special export processing Zone
Article 57
The management committee of a special export processing zone shall have the following responsibilities and powers:
1. To establish a scheme for the development and operation of the special export processing zone and to promote construction and investment within the special export processing zone.
2. To establish and implement the rules of the special export processing zone.
3. To exercise the powers delegated by the State Committee for Co-operation and Investment, to examine investment projects within the special export processing zone, and grant business licenses (except in respect of those joint venture enterprises carryi ng on the business of infrastructure construction within special export processing zones as referred to in article 8 of these regulations and other projects which take place within the area of banking).
4. To make regulations within the scope permitted by the authorized State body in respect of fees to be charged for the management and operation of the special export processing zone.
5. To manage the administration of the activities taking place within the special export processing zone .
6. To issue a certificate of origin of goods and other certificates within the power of the management committee.
7. To monitor and inspect the use of business licenses.
8. To act as a mediator in labor disputes and in disputes arising from economic contracts on the request of the parties to the dispute.
9. To ensure that all activities within the special export processing zone comply with these regulations and the charter of the special export processing zone.
Article 58
The management committee of a special export processing zone shall include a head of the committee and a number of deputy heads and members. The committee shall have its own seal.
The members of the management committee of the special export processing zone shall be appointed by the Chairmen of the Council of Ministers in accordance with the proposals made by the Chairman of the Stare Committee for Co-operation and Investment and the chairman of the people's committee of the province or city where the special export processing zone is located.
Article 59
1. The section serving as the management committee of the special export processing zone is its office.
2. Bodies specialized in such areas as customs, tax, and public security within the special export processing zones shall be established, instructed, and guided by the appropriate specialized body at a higher level.
3. Where necessary, the management committee of a special export processing zone may establish a consulting committee which shall include representatives from the enterprises operating within the special export processing zone and a number of experts.
4. The banks and the insurance company of Vietnam shall be permitted to establish branch offices within the special export processing zones.
Article 60
1. The management committee of a special export processing zone shall be responsible for preparing its budget.
2. The revenue received by a special export processing zone shall be paid to the State treasury. All expenses incurred by the zone shall be paid from the Stare budget.
Article 61
The Stare Committee for Co-operation and Investment shall be responsible for:
1. Examining and approving operation projects and the charter of the special export processing zone.
2. Guiding and supervising the activities of the management committee of the special export processing zone.
3. Resolving any matters which arise in relation to policy and laws and which are not within the power of the management committee of the special export processing zone or the people's committee at the locality at which the special export processing zone is located.
Article 62
The people's committee of the provinces and cities at which the special export processing zone is located shall be responsible for:
1. Resolving any matters which arise in relation to the special export processing zone which are within the scope of the power of the people's committee.
2. Nominating members to be appointed to the management committee of the special export processing zone.
3. Creating conditions necessary in order for the management committee of the special export processing zone to fully perform its duties as stipulated in article 59 of these regulations.
Article 63
Treatment of disputes within the special export processing zones.
1. The management committee of a special export processing zone shall be responsible for the mediation of labor disputes between enterprises operating within the special export processing zones and labor and disputes arising out of economic contracts bet ween enterprises operating within the special export processing zone. Where such mediation is unsuccessful the labor disputes shall be brought before the provincial people's court and the economic contract disputes shall be brought to State arbitration fo r resolution in accordance with the laws of Vietnam.
2. The disputes between parties to a joint venture enterprise which arise out of a joint venture contract shall be dealt with according to article 25 of the law on foreign investment in Vietnam.
Article 64
Any criminal offenses which are committed within a special export processing zone shall fall within the jurisdiction of the people's court in accordance with the provisions of the laws of Vietnam.
CHAPTER X
final Provisions
Article 65
Where any of the provisions of Decree No 28-HDBT dated 6 february 1991 are inconsistent with the provisions of this Decree in relation to the same matter the provisions of this Decree shall apply.
Other provisions relating to the operation of enterprises within a special export processing zone which are not referred to in this Decree shall be applied in accordance with the equivalent provisions of the Law on foreign Investment in Vietnam and those of the above Decree.
Article 66
Any privileges to be granted pursuant to these Regulations to an investor in a special export processing zone shall be observed by the Government of Vietnam and also granted to those investors who were issue of these provisions which may affect the benefi ts to which those investors are entitled.
Article 67
The Ministries and the State Committees concerned, and the people's committees of the provinces and cities where the special export processing zone is established shall, pursuant to these regulations, be responsible for making detailed provisions for thei r implementation.
The management committee of a special export processing zone shall draft the charter of the special export processing zone and submit it to the State Committee for Co-operation and Investment for approval.
for the Council of Ministers Vice Chairman
VO VAN KIET (Signed)