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In brief

The Ministry of Planning and Investment has recently released the draft Decision to be issued by the Prime Minister governing the Special Investment Incentives (“Draft Decision“) for seeking public comments.

The Draft Decision is to provide details for implementing the provisions of Article 20.2 of Investment Law No. 61/2020/QH14 (“Investment Law“) and the Government’s Decree No. 31/2021/ND-CP detailing and guiding the implementation of a number of provisions of the Investment Law (“Decree 31“). According to the Draft Decision, if this Draft Decision is ratified as is, it will take effect from the signing date.

Key takeaways

  • According to Article 20.2 of the Investment Law, the following new projects/expanded projects will be entitled to Special Investment Incentives:
  1. New investment projects (including expansion of such newly established projects) of innovation centers and research and development (R&D) centers with total investment capital of VND 3,000 billion1 or more, of which at least VND 1,000 billion2 is disbursed within three years from the date of investment registration certificate (IRC) or approval of investment policy; national innovation centers established under the Prime Minister’s decision (and all affiliated units located outside these centers’ head offices)
  2. Investment projects in investment-incentivized industries as prescribed in Appendix 2 of Decree 31 with investment capital of VND 30,000 billion3 or more, of which at least VND 10,000 billion4 is disbursed within three years from the date of IRC or approval of investment policy
  • Special Investment Incentives will be stated in the project’s IRC or a decision on approval of investment policy or written agreements with the competent state agencies.

In more detail

  1. Special Incentive Packages

Under Article 5 of the Draft Decision, eligible taxpayers will be entitled to one of the following Special Incentive Packages:

  • Package 1: Preferential CIT rate of 9% over a period of 30 years, 5-year CIT exemption and 50% CIT reduction for subsequent 10 years; land and water surface lease exemption for 18 years and 55% reduction for the remaining years
  • Package 2: Preferential CIT rate of 7% over a period of 33 years, 6-year CIT exemption and 50% CIT reduction for subsequent 12 years; land and water surface lease exemption for 20 years and 65% reduction for the remaining years
  • Package 3: Preferential CIT rate of 5% over a period of 38 years, 6-year CIT exemption and 50% CIT reduction for subsequent 13 years; land and water surface lease exemption for 23 years and 75% reduction for the remaining years

The Draft Decision introduces four additional criteria used to determine the specific Incentive Package applicable to the above-mentioned projects in investment-incentivized industries, including high technology, share of Vietnamese businesses participating in the value chain, added values and technology transfer.

During the period of entitlement to Special Incentive Packages, projects meeting the conditions applicable to any Incentive Package as prescribed in Article 5 of this Draft Decision will be entitled to such corresponding Incentive Package for the remaining period.

  1. Projects not entitled to Special Incentive Packages
  • Special Investment Incentives do not apply to ongoing investment projects that have been established/licensed before the effect of the Investment Law.
  • In addition, Special Investment Incentives do not apply to the following projects:
    1. Investment projects in mineral exploitation
    2. Investment projects in production and trading of goods and services subject to special tax under the provisions of the Law on Special Consumption Tax (except for projects on production of cars, aircraft and yachts)
    3. Investment projects of building commercial houses in accordance with the Law on Housing

1 Approx. 130.43 million USD
2 Approx. 43.47 million USD
3 Approx. 1.3 billion USD
4 Approx. 434.78 million USD


Yee Chung Seck leads the Firm’s Mergers & Acquisitions, IT/C, Pharmaceutical and Healthcare Practices in Vietnam. Chambers Global (2014, 2013) and Chamber Asia (from 2010 to 2015) rank him as a leading lawyer in the field of Corporate M&A and TMT in Vietnam. He is a member of the Singapore Bar Association and serves as vice president of the Singapore Business Group. He also serves as AmCham's IT/C Sub-Committee Co-Chair. Mr. Seck is fluent in English and conversational in Mandarin.


Thanh Vinh Nguyen is a partner in Baker McKenzie's Ho Chi Minh City office. Prior to joining the Firm, he practiced tax and consultancy work for two international accounting firms and worked as a compliance counsel for an international insurance company. He has co-written Business Operations in Vietnam, published by The Bureau of National Affairs, Inc.

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