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Preferential mechanisms & policies for Hoa Lac hi-tech park

VGP – The Government on June 20, 2017 issued Decree 74/2017/ND-CP (Decree 74) regulating some preferential mechanisms and policies for Hoa Lac Hi-Tech Park (HTP).

August 09, 2017 9:14 AM GMT+7

Hoa Lac Hi-Tech Park

Capital for the investment, construction and development of HTP

According to Decree 74, technical infrastructure, public greenery and internal technical infrastructure of the Research and Development Zone and the Education and Training Zone will be implemented by the HTP Management Board as the project owner and financed by central budget and other legal funds. The construction investment and business of infrastructure systems of power supply, water supply and telecommunication in HTP will be carried out by enterprises. Decree 74 also requires the synchronized construction investment and completion of technical infrastructure systems of HTP by 2020, at the latest.

Land incentives

According to Decree 74, the People’s Committee of Ha Noi City details the land price list for the types of land in HTP. The Management Board annually issues a land price adjustment coefficient and percentage to calculate the land rent unit price.

HTP land incentives are regulated as follow:

- The direct land lease of the Management Board and land handover without land usage fee collection will be changed to a land lease pursuant to Article 60.2 of the Law on Land and Article 14 of Decree No. 35/2017/ND-CP dated April 3 2017 by the Government on the exemption and reduction of land rent.

- For the land sublease of the infrastructure investor, the exemption and reduction of land rent shall comply with the regulations applied to the infrastructure investor.

- For the land use to construct the works for infrastructure management and exploitation, the land user is exempted from the land rent for the entire lease term.

- The land user is exempted from nonagricultural land usage tax for the entire land use term.

An investor who is eligible for a land lease to execute the projects must make a deposit as a guarantee of project execution in accordance with the laws on land and investment. Where the investor violates any commitment or is deprived of the Decision on Investment Policy/Investment Registration Certificate, the whole deposit will be used for land acquisition and re-investment in developing HTP and payment to the State budget.

Tax incentives

The investment project in HTP is entitled to the highest incentives under the law on investment and tax. Accordingly:

- The 10% rate of corporate income tax will apply to the new investment project with capital scale from more than VND4,000 billion for 30 years.

- The on-going investment projects whose investment certificates were issued by the provincial People’s Committee prior to the approval on the adjustment of general HTP construction planning (May 23, 2008) by the Prime Minister will be entitled to tax incentives of tax as regulated in the issued Investment Certificate/ Investment License/ Investment Incentive Certificate.

Housing development for employees

Pursuant to Decree 74, the People’s Committee of Hanoi City shall prioritize the allocation of enough land to construct housing for employees working in HTP. The Government encourages and supports organizations and individuals to invest in constructing and developing housing (including technical infrastructure, social infrastructure and housing projects), accordingly:

- Organizations and individuals implement housing projects for employees working in HTP will be entitled to tax incentives, land rent and land use fees.

- Organizations, individuals implement housing projects are not allowed to include the amounts arising from the Government’s investment, support and incentives related to tax, land rent and land use fees in selling and rental prices of housings.

Immigration and management of foreign employees

- Investor, experts and employees as Vietnamese expatriates, foreign experts and their family members can apply for multiple visa entry and exit with the reason of, and a duration in line with their work on the HTP.

- The Management Board Head considers allowing for use of APEC business travel cards by Vietnamese entrepreneurs who are working for enterprises operating in HTP.

- Vietnamese expatriates and foreign experts working in HTP are granted work permits by the Management Board under the simplified procedures. - The Management Board Head approves the foreign employee recruitment plan i.e. the contractors in HTP to recruit foreign employees into the positions that Vietnamese employees cannot satisfy. For special projects in need of attracting investment in HTP, the Ministry of Science and Technology submits them to the Government for decisions on additional investment support and incentives.

Decree 74 also stipulates some other policies on investment capital for technical infrastructure construction and the policies on collection, payment and use of land rent; the refund of land acquisition indemnity; the infrastructure use fees; the wastewater treatment fees; and other transitional provisions on the investment projects using land in the expanded planning area of HTP, without a decision on land lease.

Decree 74 shall take effect as from August 5, 2017.