Law on investment 2005

01/01/1970

NATIONAL ASSEMBLY SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom - Happiness

No. 59-2005-QH11

LAW ON INVESTMENT

Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam as amended by

Resolution 51-2001-QH10 passed by Legislature X of the National Assembly at its 10th Session

on 25 December 2001;

This Law regulates investment activities.

CHAPTER 1

General Provisions

Article 1 Governing scope

This Law regulates investment activities for business purposes; the rights and obligations of

investors; the guarantee of lawful rights and interests of investors; encouragement of investment

and investment incentives; State administration of investment activities in Vietnam and offshore

investment from Vietnam.

Article 2 Applicable entities

1. Domestic investors and foreign investors carrying out investment activities within the

territory of Vietnam; offshore investments made from Vietnam.

2. Organizations and individuals involved in investment activities.

Article 3 Interpretation of terms

In this Law, the following terms shall be construed as follows:

1. Investment means the use of capital in the form of tangible or intangible assets for the

purposes of forming assets by investors to carry out investment activities in accordance

with the provisions of this Law and other provisions of the relevant laws.

2. Direct investment means a form of investment whereby the investor invests its invested

capital and participates in the management of the investment activity.

3. Indirect investment means a form of investment through the purchase of shares, share

certificates, bonds, other valuable papers or [investment through]

a securities investment

fund and through other intermediary financial institutions and whereby the investor does

not participate directly in the management of the investment activity.

1 Phillips Fox Note: Words not appearing in the Vietnamese text have been inserted in square parentheses to aid

comprehension.© Phillips Fox Translation 2

4. Investor means any organization or individual carrying out investment activities in

accordance with the law of Vietnam, comprising:

(a) Enterprises from all economic sectors established in accordance with the Law on

Enterprises;

(b) Co-operatives and co-operative groups established in accordance with the Law on

Co-operatives;

of this Law;

(d) Business households, individuals;

(dd) Foreign organizations and individuals; Vietnamese residing overseas; foreigners

permanently residing in Vietnam;

(e) Other organizations as permitted by the law of Vietnam.

5. Foreign investor means any foreign organization or individual using capital in order to

carry out an investment activity in Vietnam.

6. Enterprises with foreign owned capital comprise any enterprise established by a foreign

investor in order to conduct investment activities in Vietnam; or a Vietnamese enterprise

in which a foreign investor purchases shares, [with which it] merges or which it acquires.

7. Investment activity means activities of investors throughout the investment process,

comprising the stages of investment preparation, performance and management of the

investment project.

8. Investment project means a collection of proposals for the expenditure of medium and

long-term capital in order to carry out an investment activity in a specific geographical

area and for a specified duration.

9. Invested capital means the money and other lawful assets used to carry out the

investment activity either in the form of direct investment or indirect investment.

10. State capital means capital for investment and development funded from the State

Budget, capital funded by credit facilities guaranteed by the State, capital funded by credit

facilities for investment and development of the State, and other investment capital of the

State.

11. Investment owner means an organization or individual being a capital owner, a person

representing an owner or a borrower which directly manages and uses capital in order to

carry out an investment activity.

12. Foreign investment means the remittance of capital in cash or other lawful assets by

foreign investors into Vietnam in order to carry out investment activities.

13. Domestic investment means the use of capital in cash or other lawful assets by domestic

investors in order to carry out investment activities in Vietnam. © Phillips Fox Translation 3

14. Offshore investment means [investment where] investors send overseas their capital in

lawful cash or other assets from Vietnam in order to carry out investment activities.

15. Sector in which investment is conditional means a sector in which investment shall only

be permitted subject to specific conditions as stipulated by law.

16. Business co-operation contract (BCC) means the investment form signed between

investors in order to co-operate in business and to share profits or products without

creating a legal entity.

17. Build-operate-transfer contract (BOT) means the investment form signed by a competent

State body and an investor in order to construct and operate commercially an

infrastructure facility for a fixed duration; and, upon expiry of the duration, the investor

shall, without compensation, transfer such facility to the State of Vietnam.

18. Build-transfer-operate contract (BTO) means the investment form signed by a competent

State body and an investor in order to construct an infrastructure facility; and, upon

completion of construction, the investor shall transfer the facility to the State of Vietnam

and the Government shall grant the investor the right to operate commercially such facility

for a fixed duration in order to recover the invested capital and gain profits.

19. Build-transfer contract (BT) means the investment form signed by a competent State

body and an investor in order to construct an infrastructure facility; and, upon completion

of construction, the investor shall transfer the facility to the State of Vietnam and the

Government shall create conditions for the investor to implement another project in order

to recover the invested capital and gain profits or to make a payment to the investor in

accordance with an agreement in the BT contract.

20. Industrial zone means a zone which specializes in the manufacture of industrial products

and the provision of services for industrial manufacture, which has defined geographical

boundaries and which is established in accordance with regulations of the Government.

21. Export processing zone means an industrial zone which specializes in the manufacture of

export products and the provision of services for the manufacture of export products and

export activities, which has defined geographical boundaries and which is established in

accordance with regulations of the Government.

22. High-tech zone means a zone which specializes in research, development and

application of high technologies and which provides a centre for fostering high-tech

enterprises, for training human resources in high technologies and for manufacturing and

trading high-tech products, which has defined geographical boundaries and which is

established in accordance with regulations of the Government.

23. Economic zone means a zone which has an economic area separated from the general

investment and business environment and with specially favourable conditions for

investors, and which has defined geographical boundaries and which is established in

accordance with regulations of the Government. © Phillips Fox Translation 4

Article 4 Policies on investment

1 Investors shall be permitted to invest in all sectors and in all industries and trades which

are not prohibited by law; and shall have the right to autonomy and to make decisions on

investment activities in accordance with the law of Vietnam.

2. The State shall provide equal treatment before the law to all investors from all economic

sectors, and as between domestic investment and foreign investment; and the State shall

encourage and facilitate investment activities.

3. The State shall recognize and protect the ownership of assets, invested capital and

revenue and other lawful rights and interests of investors; and shall recognize the longterm existence and development of investment activities.

4. The State undertakes to implement international treaties concerning investment of which

the Socialist Republic of Vietnam is a member.

5. The State shall encourage and shall have a policy of incentives applicable to investment

in investment incentive sectors and geographical areas.

Article 5 Application of investment laws, international treaties, foreign laws and international

investment custom

1. Investment activities of investors within the territory of Vietnam must comply with the

provisions of this Law and other provisions of the relevant laws.

2. In the case of special investment activities which are regulated by other laws, the

provisions of such other laws shall apply.

3. If an international treaty of which the Socialist Republic of Vietnam is a member contains

provisions which are different from the provisions in this Law, the provisions of such

international treaty shall prevail.

4. Applicable to foreign investment activities, where the law of Vietnam does not yet contain

any provision, the parties may agree in the contract on application of foreign law and

international investment custom, if application of such foreign law and international

investment custom is not contrary to the fundamental principles of the law of Vietnam.

CHAPTER 2

Investment Guarantees

Article 6 Guarantees relating to capital and assets

1. Lawful assets and invested capital of investors shall not be nationalized or confiscated by

administrative measures.

2. In a case of real necessity for the purpose of national defence and security and in the

national interest, if the State acquires compulsorily or requisitions an asset of an investor,

such investor shall be compensated or paid damages at the market prices at the time of

announcement of such compulsory acquisition or requisition. © Phillips Fox Translation 5

Payment of compensation or damages must ensure the lawful interests of investors and

be made on the basis of non-discrimination between investors.

3. Any compensation or damages payable to foreign investors as stipulated in clause 2 of

this article shall be made in a freely convertible currency and shall be permitted to be

remitted abroad.

4. Procedures and conditions for compulsory acquisition and requisition [shall be

implemented] in accordance with law.

Article 7 Protection of intellectual property rights

The State shall protect intellectual property rights during investment activities; and shall ensure

the legitimate rights of investors in technology transfer in Vietnam in accordance with the laws

on intellectual property and other provisions of the relevant laws.

Article 8 Opening markets and investments related to trade

In order to comply with the provisions of international treaties of which the Socialist Republic of

Vietnam is a member, the State guarantees to implement the following provisions in respect of

foreign investors:

1. To open the investment market in compliance with the committed schedule;

2. Not to compel investors to undertake the following requirements:

(a) To give priority to the purchase or use of domestic goods or services; or to

purchase compulsorily goods from a specific domestic manufacturer or services

from a specific domestic service provider;

(b) To export goods or services at a fixed percentage; to restrict the quantity, value or

type of goods or services which may be exported or of goods which may be

manufactured domestically or services which may be provided domestically;

(c) To import goods at the same quantity and value as goods exported, or to selfbalance compulsorily foreign currency from sources obtained from exported goods

in order to satisfy their import requirements;

(d) To achieve certain localization ratios during manufacture of goods;

(dd) To achieve a stipulated level or value in their research and development activities

in Vietnam;

(e) To supply goods or provide services in a particular location whether in Vietnam or

abroad;

(g) To establish its head office in a particular location.

Article 9 Remittance of capital and assets abroad

1. After a foreign investor has discharged fully its financial obligations to the State of

Vietnam, it shall be permitted to remit abroad the following:

(a) Its profits derived from business activities;

(b) Payments received from the provision of technology and services and from

intellectual property;

(d) Invested capital and proceeds from the liquidation of investments;

(dd) Other sums of money and assets lawfully owned by the investor.

2. A foreigner working in Vietnam for an investment project shall be permitted to remit

abroad his or her lawful income after having discharged fully his or her financial

obligations to the State of Vietnam.

3. The remittance of the above sums of money shall be made in a freely convertible

currency in accordance with the trading exchange rate published by a commercial bank

selected by the investor.

4. Procedures for remitting abroad the sums of money relating to an investment activity shall

be subject to the laws on foreign exchange control.

Article 10 Application of uniform prices, fees and charges

During the process of an investment activity, the investor shall be entitled to uniform application

of price rates for goods and fees and charges for services which are controlled by the State.

Article 11 Investment guarantees in the event of changes in law or policies

1. If a newly promulgated law or policy contains higher benefits and incentives than those to

which the investor was previously entitled, then the investor shall be entitled to the

benefits and incentives in accordance with the new law as from the date the new law or

policy takes effect.

2. If a newly promulgated law or policy adversely affects the lawful benefits enjoyed by an

investor prior to the date of effectiveness of such law or policy, the investor shall be

guaranteed to enjoy incentives the same as the investment certificate or there shall be

resolution by one, a number or all of the following methods:

(a) Continuation of enjoyment of benefits and incentives;

(b) There shall be a deduction of the loss from taxable income;

(d) Consideration shall be given to paying compensation in necessary circumstances. © Phillips Fox Translation 7

3. Based on the provisions of the laws and commitments in international treaties of which

the Socialist Republic of Vietnam is a member, the Government shall make specific

provisions on guarantee for interests of investors in the case where a change in laws or

policies affects adversely the interests of the investors.

Article 12 Dispute resolution

1. Any dispute relating to investment activities in Vietnam shall be resolved through

negotiation and conciliation, or shall be referred to arbitration or to a court in accordance

with law.

2. Any dispute as between domestic investors or as between a domestic investor and a

State administrative body of Vietnam relating to investment activities in the territory of

Vietnam shall be resolved at a Vietnamese court or arbitration body.

3. Any dispute to which one disputing party is a foreign investor or an enterprise with foreign

owned capital, or any dispute as between foreign investors shall be resolved by one of

the following tribunals and organizations:

(a) A Vietnamese court;

(b) A Vietnamese arbitration body;

(d) An international arbitration body;

(dd) An arbitration tribunal established in accordance with the agreement of the

disputing parties.

4. Any dispute between a foreign investor and State administrative body of Vietnam relating

to investment activities in the territory of Vietnam shall be resolved by a Vietnamese court

or arbitration body, unless otherwise provided in a contract signed between a

representative of a competent State body of Vietnam with the foreign investor or in an

international treaty of which the Socialist Republic of Vietnam is a member.

CHAPTER 3

Rights and Obligations of Investors

Article 13 Right to autonomy in investment - business

[Investors shall have the following rights:]

1. To select the sector in which to make an investment, the form of investment, the method

of raising capital, the geographical location and scale of the investment; an investment

partner and the duration of operation of the project.

2. To register business in one or more industries and trades, to establish enterprises in

accordance with law and to make its own decisions concerning its registered investment -

business activities. © Phillips Fox Translation 8

Article 14 Right to access and use investment resources

[Investors shall have the following rights:]

1. Equality in access to and use of sources of credit capital and aid funds, and in use of land

and natural resources in accordance with law.

2. To lease or purchase equipment and machinery either domestically or overseas in order

to carry out an investment project.

3. To recruit domestic employees; to recruit foreign employees to fulfil management tasks,

to provide technical labour and to provide expertise in accordance with production and

business requirements, unless otherwise provided in an international treaty of which the

Socialist Republic of Vietnam is a member in which case such international treaty shall

apply.

Article 15 Right to import and export, to conduct marketing and advertise, to process and reprocess goods relevant to investment activities

[Investors shall have the following rights:]

1. To import directly or to import by way of authorized dealers; equipment, machinery, raw

materials, supplies and goods for investment activities; and to export directly or to export

by way of authorized dealers and to sell its products.

2. To advertise and market its products and services and to enter into advertising contracts

directly with organizations which are authorized to publish advertisements.

3. To undertake activities being processing or reprocessing of products; to place orders for

processing or reprocessing of goods domestically, or to place orders for processing of

goods overseas in accordance with the commercial law.

Article 16 Right to purchase foreign currencies

1. Investors shall be permitted to purchase foreign currencies from credit institutions

authorized to conduct foreign currency business in order to meet the demand of their

current transactions, capital transactions and other transactions in accordance with the

provisions of the law on foreign exchange control.

2. The Government shall guarantee or assist the foreign currency balance of a number of

important projects in the sectors of energy, construction of traffic infrastructure facilities

and waste treatment.

Article 17 Right to assign or adjust capital or investment project

1. Investors shall have the right to assign or adjust capital or an investment project. Where

profits arise from an assignment, the assignor must pay income tax in accordance with

law.

2. The Government shall provide conditions for assignment or adjustment of capital or

investment projects in cases where such conditions are required. © Phillips Fox Translation 9

Article 18 Mortgage of land use rights and of assets attached to land

Investors having investment projects shall be permitted to mortgage land use rights and assets

attached to land with credit institutions authorized to operate in Vietnam in order to borrow

capital for implementation of projects in accordance with law.

Article 19 Other rights of investors

[Investors shall have the following rights:]

1. To receive investment incentives in accordance with provisions of this Law and other

provisions of the relevant laws.

2. To have access to and use public services on the principle of non-discrimination.

3. To have access to legal instruments and policies relating to investment; to data on the

national economy, to data about each economic sector and to other relevant information

about investment activities; and to contribute its opinions on laws and policies relating to

investment.

4. To lodge complaints, to make denunciations or to institute legal proceedings relating to

breaches of the law by organizations and individuals in accordance with law.

5. To exercise other rights in accordance with law.

Article 20 Obligations of investors

[Investors shall have the following obligations:]

1. To comply with the provisions of the laws on investment procedures; to carry out

investment activities correctly in accordance with the registered investment contents

[and/or] the provisions of the investment certificate.

The investor shall be responsible for the accuracy and truthfulness of the contents of

investment registration and of the investment project file and the lawfulness of documents

on certification.

2. To discharge fully financial obligations in accordance with law.

3. To carry out the provisions of the laws on accounting, auditing and statistics.

4. To perform obligations in accordance with the law on insurance, on labour; to respect the

honour and dignity of employees and the customs of Vietnam.

5. To respect and create favourable conditions for employees to establish or participate in

political organizations and socio-political organizations.

6. To implement the provisions of the law on protection of the environment.

7. To perform other obligations in accordance with law. © Phillips Fox Translation 10

CHAPTER 4

Forms of Investment

Article 21 Forms of direct investment

[Investors shall be permitted to carry out the following forms of direct investment:]

1. To establish economic organizations in the form of one hundred (100) per cent capital of

domestic investors or (100) per cent capital of foreign investors.

2. To establish joint venture economic organizations between domestic and foreign

investors.

3. To invest in the contractual forms of: BCC ; BO; BTO; and BT.

4. To invest in business development.

5. To purchase shares or to contribute capital in order to participate in management of

investment activities.

6. To invest in the carrying out of a merger and acquisition of an enterprise.

7. To carry out other forms of direct investment.

Article 22 Investments to enable establishment of economic organizations

1. Based on the forms of investment stipulated in article 21 of this Law, investors shall be

permitted to make an investment to enable the establishment of the following economic

organizations:

(a) Enterprises organized and operating in accordance with the Law on Enterprises;

(b) Credit institutions, insurance enterprises, investment funds and other financial

organizations in accordance with various laws;

establishments which conduct investment activities for profit-making purposes;

(d) Other economic organizations in accordance with law.

2. In addition to the economic organizations stipulated in clause 1 of this article, domestic

investors shall be permitted to make an investment to enable the establishment of cooperatives and co-operative groups organized and operating in accordance with the Law

on Co-operatives; business households in accordance with law.

Article 23 Investment in accordance with contract

1. Investors shall be permitted to sign a BCC contract in order to co-operate in production

and to share profits or to share products and other forms of business co-operation. © Phillips Fox Translation 11

The contract shall set out the co-operating parties; the contents of the co-operation; the

duration of business; the rights, obligations and responsibilities of each party; the cooperative relationship between the parties and the management organization as agreed

by the parties.

A BCC contract in the sector of prospecting, exploration and mining of petroleum and

some other natural resources and in the form of a production sharing contract shall be

implemented in accordance with the provisions in this Law and other provisions of the

relevant laws.

2. Investors shall be permitted to sign a BOT, BTO and BT contract with the competent

State body in order to implement projects for new construction, expansion, modernization

and operation of infrastructure projects in the sectors of traffic, electricity production and

business, water supply or drainage, waste treatment and other sectors as stipulated by

the Prime Minister of the Government.

The Government shall provide regulations on investment sectors; on the conditions,

order, procedures and methods of implementation of investment projects; and on the

rights and obligations of the parties implementing an investment project in the contractual

form of BOT, BTO and BT.

Article 24 Investment in business development

Investors shall be permitted to invest in business development through the following forms:

1. Expanding scale, increasing output capacity and business capability.

2. Renovating technology, improving product quality and reducing environmental pollution.

Article 25 Capital contribution, purchase of shareholding, merger and acquisition

1. Investors shall be permitted to contribute capital to and to purchase shareholding in

companies and branches operating in Vietnam.

The ratio of capital contribution and purchase of shareholding by foreign investors in a

number of sectors, industries and trades shall be regulated by the Government.

2. Investors shall be permitted to merge and to acquire companies and branches.

The conditions for merger and acquisition of companies and branches shall be regulated

by this Law, the law on competition and other provisions of the relevant laws.

Article 26 Indirect investment

1. Investors shall be permitted to carry out the following forms of indirect investment in

Vietnam:

(a) Purchase of shareholding, shares, bonds and other valuable papers;

(b) Through securities investment funds;

2. Any investment by way of purchase or sale of shares, share certificates, bonds and other

valuable papers of individuals and organizations and procedures for conducting indirect

investment activities shall be implemented in accordance with the law on securities and

other provisions of the relevant laws.

CHAPTER 5

Investment Sectors and Geographical Areas,

Investment Incentives and Support

SECTION 1

Investment Sectors and Geographical Areas

Article 27 Incentive investment sectors [shall comprise]

1. Manufacture of new materials and production of new energy; manufacture of high-tech

products; bio-technologies; information technology; mechanical manufacturing.

2. Breeding, rearing, growing and processing agricultural, forestry and aquaculture products;

production of salt; creation of new plant and animal variety.

3. Use of high technology and advanced techniques; protection of the ecological

environment; research, development and creation of high-technology.

4. Labour intensive industries.

5. Construction and development of infrastructure facilities and important industrial projects

with a large scale.

6. Professional development of education, training, health, sports, physical education and

Vietnamese culture.

7. Development of traditional crafts and industries.

8. Other manufacturing and service sectors which require encouragement.

Article 28 Geographical areas of investment incentives

[Investment shall be encouraged in the following areas:]

1. Areas with difficult socio-economic conditions; areas with specially difficult socioeconomic conditions.

Article 29 Sectors in which investment is conditional

1. Sectors in which investment is subject to conditions shall comprise:

(a) Sectors impacting on national defence and security, social order and safety;

(b) Banking and finance sector;

(d) Culture, information, the press and publishing;

(dd) Entertainment services;

(e) Real estate business;

(g) Survey, prospecting, exploration and mining of natural resources; the ecological

environment;

(h) Development of education and training;

(i) A number of other sectors in accordance with law.

2. Applicable to foreign investors, in addition to the sectors stipulated in clause 1 of this

article, the sectors in which investment is subject to conditions shall comprise investment

sectors in accordance with the schedule for implementation of international undertakings

in international treaties of which the Socialist Republic of Vietnam is a member.

3. Where an enterprise with foreign owned capital invested in a sector in which investment

was unconditional but during the course of the investment activity the list of sectors in

which investment is conditional was amended with the result that the relevant sector was

included, the investor shall be permitted to continue its investment activity in that sector.

4. The same investment conditions which are applicable to domestic investors shall be

applied to foreign investors where Vietnamese investors hold more than fifty one (51) per

cent of the charter capital of an enterprise.

5. Based on the requirements for socio-economic development in each period and

consistent with the undertakings in international treaties of which the Socialist Republic of

Vietnam is a member, the Government shall regulate the list of investments subject to

conditions, the conditions applicable to the establishment of economic organizations, the

forms of investment, and opening the market in a number of sectors as applicable to

foreign investors.

Article 30 Sectors in which investment is prohibited

[Investment activities shall be prohibited in the following sectors:]

1. Projects which are detrimental to national defence and security, and the public interest.

2. Projects which are detrimental to historical and cultural traditions and ethics, and

3. Projects which harm the people’s health, or which destroy natural resources and the

environment.

4. Projects for the treatment of toxic wastes brought into Vietnam; projects for the

manufacture of any type of toxic chemicals or for the use of chemical agents prohibited by

international treaties.

Article 31 Promulgation of lists of investment incentive sectors and geographical areas of

investment incentives, and of sectors in which investment is conditional

1. Based on the master plan and strategies for socio-economic development for each period

and undertakings in international treaties of which the Socialist Republic of Vietnam is a

member, the Government shall issue or amend and add to the list of investment incentive

sectors, the list of sectors in which investment is conditional, the list of sectors in which

investment is prohibited, the list of geographical areas of investment incentives.

2. Ministries, ministerial equivalent bodies and people’s committees of provinces and cities

under central authority (hereinafter referred to as provincial people’s committees) shall

not be permitted to issue regulations specifying sectors in which investment is prohibited

and sectors in which investment is conditional, or specifying investment incentives which

exceed the brackets stipulated by law.

SECTION 2

Investment Incentives

Article 32 Applicable entities and conditions for investment incentives

1. Investors with investment projects in the investment incentive sectors and geographical

areas stipulated in articles 27 and 28 of this Law shall be entitled to the incentives as

stipulated in this Law and other provisions of the relevant laws.

2. The investment incentives stipulated in clause 1 of this article shall be applicable to new

investment projects and investment projects for expansion of scale, for raising output

capacity or business capacity; for renovation of technology or raising product quality, or

for reducing environmental pollution.

Article 33 Tax incentives

1. Investors having projects within the categories stipulated in article 32 of this Law shall be

entitled to preferential tax rates, the duration of entitlement to such rates and the duration

of exemption from and reduction of tax in accordance with the law on tax.

2. Investors shall be entitled to tax incentives on that portion of income which is distributed

to them from an activity being capital contribution or purchase of shareholding in an

economic organization in accordance with the law on tax after such organization has paid

in full corporate income tax.

3. Investors shall be exempt from payment of import duty on equipment, materials, means of

transportation and other goods for implementation of investment projects in Vietnam in

4. Income from activities of technology transfer applicable to projects entitled to investment

incentives shall be exempt from income tax in accordance with the law on tax.

Article 34 Carrying forward losses

If an investor suffers losses after completion of tax finalization with the tax office, it shall be

permitted to carry its losses forward to the following year, and the amount of such losses shall

be set off against taxable income for the purposes of corporate income tax in accordance with

the Law on Corporate Income Tax. The period for carrying forward losses shall not exceed five

years.

Article 35 Depreciation of fixed assets

Investment projects in investment incentive sectors and geographical areas and business

projects with high economic efficiency shall be subject to accelerated depreciation of fixed

assets; the maximum rate of depreciation shall not be more than twice the level of depreciation

as stipulated by regulations on depreciation of fixed assets.

Article 36 Land use incentives

1. The term of land use of an investment project shall not exceed fifty (50) years; with

respect to projects with a large amount of invested capital and a slow rate of capital

recovery, projects investing in areas with difficult socio-economic conditions and projects

investing in areas with specially difficult socio-economic conditions which require a longer

term, the term of allocation or lease of land shall not exceed seventy (70) years.

If at the expiry of a term of land use an investor with [a record of] good compliance with

the law on land has a requirement for continued land use, the competent State body shall

consider an application for extension of the term of land use in conformity with the

approved land use zoning.

2. Investors which invest in investment incentive sectors and geographical areas shall be

entitled to an exemption from payment of or a reduction of land rent and land use fees in

accordance with the law on land and the law on tax.

Article 37 Incentives applicable to investors who invest in industrial zones, export processing

zones, high-tech zones, and economic zones

Based on the conditions for socio-economic development in each period and the principles

stipulated in this Law, the Government shall provide for incentives applicable to investors

investing in industrial zones, export processing zones, high-tech zones and economic zones.

Article 38 Procedures for implementation of investment incentives

1. With respect to domestic investment projects in the category for which investment is not

registered and projects in the category for which investment is registered as stipulated in

article 45 of this Law, investors shall, on the basis of the incentives and conditions for

investment incentives stipulated by law, assess themselves incentives and shall conduct

procedures at the competent State body for investment incentives.

If an investor requests the certification of investment incentives, it shall conduct the

procedures for investment registration in order for the State administrative body for

2. With respect to domestic investment projects in the category for which there must be

evaluation for investment as stipulated in article 47 of this Law and which satisfy the

conditions for incentives, the State administrative body for investment shall record

incentives in the investment certificate.

3. With respect to foreign invested projects which satisfy the conditions for incentives, the

State administrative body for investment shall record investment incentives in the

investment certificate.

Article 39 Circumstances in which incentives may be extended

Where encouragement of the development of an especially important branch, a zone or a

special economic zone is required, the Government may make a submission to the National

Assembly for its consideration and issuance of a resolution on investment incentives other than

those stipulated in this Law.

SECTION 3

Investment Support

Article 40 Support for technology transfer

1. The State of Vietnam shall create favourable conditions for and ensure the lawful rights

and interests of parties to technology transfers (including capital contribution in the form

of value of technology) in order to implement investment projects in Vietnam in

accordance with the law on technology transfer.

2. The State shall encourage the transfer into Vietnam of advanced technology, source

technology and technology in order to create new products, to improve production

capacity, competitiveness and product quality; and the saving and effective use of raw

materials, fuel, energy and natural resources.

Article 41 Training support

1. The State shall encourage the establishment of assistance funds for human resources

training made up by contributions from domestic and foreign organizations and

individuals.

Expenses incurred by enterprises for training shall be permitted to be included in

reasonable expenses for the purposes of calculation of taxable income subject to

corporate income tax.

2. The State assists with funding from the State Budget for employee training in enterprises

by way of training assistance programs.

Article 42 Support for and encouragement of development of investment services

The State shall encourage and provide support for organizations and individuals to provide the

following investment support services:

2. Intellectual property and technology transfer c

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