Law on Promotion of Domestic Investment

Legal+document%3a+LKKDTTN+*+*%2fDate%3a%2f*+06%2f23%2f94+*+*%2fNumber%3a%2f*LKKDTTN+*+*%2fName+of+Document%3a%2f*+Law+On+Promotion+Of+Domestic+Investment+NATIONAL+ASSEMBLY+SOCIALIST+REPUBLIC+OF+VIETNAM%0d%0a%0d%0aIndependence-Freedoms-Happiness+---------------------THE+NATIONAL+OF+THE+SOCIALIST+REPUBLIC+9TH+LEGISLATURE%2c+5TH+(From+26+May+ASSEMBLY+OF+VIETNAM+SESSION+to+23+June%2c+1994)%0d%0a%0d%0aLAW+ON+PROMOTION+OF+DOMESTIC+INVESTMENT+-+To+mobilize+and+make+effective+use+of+all+capital%2c+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%2c+powerful+country%2c+equitable+and+civilized+society%3b+-+Pursuant+to+the+Article+84+of+the+Constitution+of+the+Socialist+Republic+of+Vietnam+in+1992%3b+-+This+law+provides+on+promotion+of+domestic+investment.+Chapter+GENERAL+PROVISIONS+Article+1+The+State+protects+and+encourages+Vietnamese+organizations%2c+citizen%2c+Vietnamese+residing+abroad%2c+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+Vietnam.+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%2c+the+following+terms%2c+shall+have+the+meanings+ascribed+to+them+hereunder%3a+1.+%22Domestic+investment%22+means+to+put+capital+in+production%2c+business+-+operation+in+Vietnam+of+the+organizations+individuals+provided+in+Article+1+of+this+law.+2.+%22Investor%22+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.%0d%0a%0d%0a%0cArticle+3+Investment+capital+shall+be+Vietnamese+currency+%3b+convertible+foreign+currencies+%3b+gold%2c+silver%2c+precious+stone+%3b+transferable+deed+%3b+plant%2c+buildings%2c+equipment%2c+machines%2c+other+means+of+production+or+the+value+of+land-use+right%2c+industrial+property+right+which+are+used+for+the+investment+in+Vietnam.+Article+4+Sphere+of+a+application+of+the+investment+according+to+this+law+shall+include%3a+1.+Investment+for+the+establishment+of+productive+and+business+units+of+all+economic+sectors%3b+2.+Investment+to+expand+scale+and+capabilities+of+production+%3b+to+carry+out+research+and+development+and+to+renew+technologies+of+the+existing+productive+and+business+and+business+units%3b+3.+To+buy+holdings+of+the+enterprises+%3b+to+contribute+capital+to+the+enterprises+including+State+-+run+enterprises+which+are+permitted+to+diversify+their+forms+of+ownership.+Chapter+II+INVESTMENT+GUARANTEE+AND+ASSISTANCE+Article+5+The+State+recognizes+and+protects+the+rights+to+property+toward+assets%2c+investment+capital%2c+profit%2c+other+legal+rights+and+interest+of+the+investor.+Article+6+Assets%2c+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%2c+security+and+interest%2c+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+with+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%3a+1.+To+allocate+land+or+put+land+for+lease+according+to+provisions+of+the+law+on+land%3b+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%3b+3.+To+establish+funds+for+investment+assistance+and+encourage+them+to+grant+loans+for+mid-term+and+long-term+investment.+The+Government%0d%0a%0d%0a%0cshall+provide+the+organization+and+activities+of+the+funds+for+investment+assistance%3b+4.+To+contribute+capital+through+the+funds+for+investment+assistance%2c+commercial+banks%2c+financial+companies+to+productive+and+business+units+of+all+economic+sectors+on+the+basis+of+mutual+benefit+%3b+5.+To+promulgate+necessary+provisions+concerning+sponsorship+for+investment+credit+of+the+banks%2c+credit+organizations+and+financial+companies.+6.+To+provide+assistance+for+the+implementation+of+the+programmes+or+services+concerning+investment+promotion+which+consist+of+%3a+a.+Consultancies+for+management+and+business-operation%3b+b.+Legal+consultancies%3b+c.+Organization+of+vocational+training+and+training+of+technical+specialists+%3b+d.+Training+and+enhancement+of+knowledge+concerning+management%3b+e.+Provision+of+economic+information%3b+f.+Dissemination+and+transfer+of+technology+%3b+creating+favorable+conditions+for+investors+to+use+new+technologies%2c+with+preferential+fees%2c+generated+by+the+help+of+State+budget.+Article+8+The+investor+shall+be+entitled+to+employ+foreign+specialists%2c+Vietnamese+residing+abroad+to+work+for+domestic+investment+project.+The+order+and+formalities+concerning+exit%2c+entry+shall+be+applied+as+the+regulations+on+exit%2c+entry+of+the+foreigners+who+work+in+the+enterprise+with+foreign+owned+capital.+Foreign+specialist%2c+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+provisions+of+the+law+of+Vietnam.+Chapter+III+PREFERENTIAL+TREATMENT+FOR+Article+9+The+following+investment+projects+shall+be+given+preferential+treatment+%3a+1.+Investment+in+the+fields+of+a.+Afforestation%2c+planting+perennial+trees+on+waste+land%2c+bare-hilly+land+%3b+aquaculture+in+virgin+waters+%3b+fishing+at+off-shore+territorial+waters.+b.+Construction+of+infrastructures+%3b+development+of+public+transport+in+urban+areas+%3b+development+devoted+to+the+cause+concerning+INVESTMENT%0d%0a%0d%0a%0ceducation%2c+training%2c+public+health%2c+national+culture+%3b+scientific+and+technological+research+works.+c.+Processing+agricultural%2c+forest+and+aquatic+products+%3b+provision+of+technical+services+which+directly+serve+agricultural%2c+forest+and+fishery+production+%3b+d.+Production+of+goods+for+export%3b+e.+Industrial+branches+which+are+of+priority+in+each+period+of+socio-economic+development+%3b+traditional+branches+and+professions.+2.+Investment+in+ethnic+minorities+areas%2c+highlands%2c+islands+and+other+difficult+areas%3b+3.+Investment+for+the+establishment+of+productive+units+which+will+use+advanced+technologies+and+a+great+deal+of+labourers.+The+Government+shall+determine+the+list+of+branches+and+professions+of+each+field%2c+state+of+the+areas%2c+technological+standards+and+scale+of+use+of+the+labourers+which+are+entitled+to+enjoy+preferential+treatment+for+investment+according+to+planning+and+direction+for+development+of+the+State.+Article+10+Apart+from+preferential+treatments+as+provided+in+the+enforced+laws+and+ordinance+on+taxation%2c+the+investment+projects+provided+in+Article+9+of+this+law+shall+be+entitled+to+enjoy+other+preferential+treatments+concerning+taxation+as+follows+%3a+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%2c+highlands%2c+islands+and+other+difficult+areas+shall+be+allowed+an+exemption+from+profit+tax+for+an+additional+period+from+one+to+two+years%2c+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+period+from+one+to+two+years+%3b+2.+Productive+and+business+units+which+invest+an+additional+capital+or+use+the+remaining+profit+to+reinvest+for+the+purpose+of+expanding+production%2c+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+%3b+3.+Investment+projects+which+are+specially+encouraged+shall+be+allowed+by+the+Government+for+exemption+from+import+duty+toward+equipment%2c+machines+and+accessories+which+are+directly+imported+by+the+investor%2c+or+entrusted+by+the+investor+to+import+them+for+the+construction+of+productive+units.+In+the+case+where+the+equipment%2c+machines+and+accessories+which+are+exempted+from+import+duty+are+misused%2c+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%3b+4.+Profit+shared+from+the+form+Point+3%2c+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.%0d%0a%0d%0a%0cThe+Government+shall+determine+detailed+rates+of+preferential+treatment+for+investment.+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+%3b+if+the+investors+who+establish+new+productive+and+business+units+which+ensure+efficiency+in+ethnic+minorities+areas%2c+highlands%2c+islands+and+other+difficult+areas%2c+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.+Chapter+IV+RIGHTS+AND+DUTIES+OF+THE+INVESTORS+Article+12+According+to+the+law%2c+the+investors+shall+have+the+rights+%3a+1.+To+select+branches%2c+professions+and+areas+for+their+investment+on+Vietnamese+territories+%3b+2.+To+select+forms+of+investment+%3b+3.+To+enjoy+preferential+treatment+as+provisions+of+this+law+%3b+4.+To+take+initiatives+in+the+activities+concerning+investment%2c+production+and+business+which+were+registered+%3b+5.+To+employ+the+labourers+without+limitation+on+quantity+%3b+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+%3a+1.+To+operate+their+business+according+to+the+investment+licence%2c+to+comply+strictly+legal+provisions+concerning+accounting+and+statistical+issues+%3b+2.+To+pay+tax+and+to+implement+other+financial+liabilities+according+to+the+provisions+of+the+law+%3b+3.+To+comply+with+the+provisions+of+the+law+concerning+the+defence+of+the+motherland%2c+national+security+and+social+order.%0d%0a%0d%0a%0c4.+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+%3b+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%2c+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%2c+he+shall+be+apparently+entitled+to+enjoy+preferential+treatment+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%2c+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+%3a+1.+Profit+earned+during+the+process+of+production+or+business-operation+due+to+the+use+of+investment+capital+which+was+legally+transferred+from+abroad+%3b+2.+Principal+capital+and+interest+loans+from+abroad+during+the+process+of+production+and+business-operation+%3b+3.+Investment+capital+which+was+legally+transferred+from+abroad+%3b+4.+Interest+items+and+other+assets+under+their+legal+property+The+Government+shall+provide+concrete+formalities+for+transferring+abroad+different+items+of+money+and+assets+stipulated+is+this+Article.+Article+17+When+transferring+profit+abroad+according+to+Point+1%2c+Article+16+of+this+law%2c+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.+Chapter+V+STATE+MANAGEMENT+ON+PROMOTION+OF+INVESTMENT+Article+18+1.+The+Government+shall+exercise+an+unanimous+State+management+on+the%0d%0a%0d%0a%0cinvestment+and+promotion+of+investment.+The+Government+shall+appoint+a+competent+body+to+be+responsible+for+helping+it+implement+the+State+management+function+on+promotion+of+investment.+2.+The+State+management+body+in+charge+of+promotion+of+investment+shall+have+the+duties+and+rights+%3a+a%2f+To+formulate+and+submit+to+the+Government+the+list+of+branches%2c+professions+and+scale+of+the+areas+which+are+entitled+to+enjoy+preferential+treatment+for+investment+%3b+b%2f+To+guide+and+supervise+the+implementation+of+assistance+measures+and+preferential+treatment+for+investment.+c%2f+To+receive+application+asking+for+preferential+treatment+for+investment+and+within+thirty+(30)+days%2c+from+the+date+of+receipt+of+the+application%2c+decide+or+refuse+to+grant+certificate+on+preferential+treatment+for+investment+according+to+the+provisions+of+the+law+to+the+enterprises+which+were+permitted+to+be+established+by+the+Prime+Minister.+Article+19+The+People's+Committee+of+the+provinces%2c+cities+under+central+authority+shall+have+duties+and+rights+%3a+1.+To+implement+State+management+function+on+promotion+of+domestic+investment+on+local+scale+according+to+the+provisions+of+the+law+%3b+2.+To+formulate+and+publish+the+list+of+projects+needed+to+be+promoted+for+investment+which+are+linked+with+the+directions+for+socio-economic+development+of+the+locality+%3b+3.+To+receive+application+asking+for+preferential+treatment+for+investment+and+within+thirty+(30)+days%2c+from+the+date+of+receipt+of+the+application%2c+decide+or+refuse+to+grant+certificate+on+preferential+treatment+for+investment+according+to+the+provisions+of+the+law.+Chapter+VI+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%2c+depending+upon+the+degree+of+seriousness+of+the+infringement%2c+according+to+the+provisions+of+the+law.+Article+21+Any+person+who+takes+advantage+of+his+position%2c+rights+to+hinder+the+investment%2c+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+liable+to+compensate+the+losses+and+be+disciplined+or+prosecuted+for+criminal%0d%0a%0d%0a%0cresponsibilities+according+to+the+provisions+of+the+law%2c+depending+upon+the+degree+of+seriousness+of+the+infringement.+Chapter+VII+PROVISIONS+Article+22+This+law+shall+come+into+full+force+and+effect+from+1st+January%2c+1995+Any+provision%2c+previously+promulgated%2c+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%2c+shall+be+entitled+to+enjoy+preferential+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%2c+9th+legislature+on+22+June%2c+1994.+For+the+National+Assembly+of+the+Socialist+Republic+of+Vietnam+Chairman+NONG+DUC+MANH+(Signed)+BackBack+%3cindex.html%3e+FOR+IMPLEMENTATION%0d%0a%0d%0a%0c