DECREE No DECREE No. 27/2003/ND-CP OF MARCH 19, 2003 AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF THE GOVERNMENT’S DECREE No. 24/2000/ND-CP OF JULY 31, 2000 DETAILING THE IMPLEMENTATION OF THE LAW ON FOREIGN INVESTMENT IN VIETNAM THE GOVERNMENT Pursuant to the December 25, 2001 Law on Organization of the Government; Pursuant to the November 12, 1996 Law on Foreign Investment in Vietnam and the June 9, 2000 Law Amending and Supplementing a Number of Articles of the Law on Foreign Investment in Vietnam; At the proposal of the Minister of Planning and Investment, DECREES: Article 1.- To amend and supplement a number of articles and Appendix 1 of the Government’s Decree No. 24/2000/ND-CP of July 31, 2000 detailing the implementation of the Law on Foreign Investment in Vietnam (hereinafter referred to as Decree No. 24/2000/ND-CP) as follows: 1. Article 1 is amended and supplemented as follows: " Article 1.- Scope of application: This Decree details the implementation of the November 12, 1996 Law on Foreign Investment in Vietnam, the June 9, 2000 Law Amending and Supplementing a Number of Articles of the Law on Foreign Investment in Vietnam (hereinafter referred collectively to as the Law on Foreign Investment in Vietnam). This Decree governs foreign direct investment activities in Vietnam, including activities of introducing capital in cash or any other assets by foreign investors into Vietnam for directly conducting production and/or business activities in order to earn profits in the forms prescribed by the Law on Foreign Investment in Vietnam. All foreign direct investment activities in Vietnam must comply with the provisions of the Law on Foreign Investment in Vietnam, this Decree and other legal documents." 2. Clause 2 of Article 2 is amended and supplemented as follows: "2. Domestic medical examination and treatment, educational, training and scientific research establishments which satisfy the conditions prescribed by the Government." 3. Article 6 is amended and supplemented as follows: " Article 6.- The form of business cooperation contract 1. A business cooperation contract is a document concluded between two or more parties for investment and business in Vietnam, which defines the responsibility of and the division of business results to, each party, without setting up a new legal person. Foreign-invested enterprises are entitled to cooperate with foreign organizations and/or individuals to perform business cooperation contracts. 2. Business cooperation contracts in the field of prospection, exploration and exploitation of oil and gas as well as a number of other natural resources in the form of production-sharing contract shall comply with relevant law provisions and the Foreign Investment Law." 4. Article 11 is amended and supplemented as follows: - To add the following second paragraph to Clause 1: "Joint-venture enterprises include enterprises with 100% foreign capital already established in Vietnam which enter into joint ventures with the subjects defined at Points b, c and e, Clause 2 of this Article." - To amend Section e and add Section f, Clause 2 as follows: "e/ Joint venture enterprises; f/ Enterprises with 100% foreign capital." 5. Article 21 is amended and supplemented as follows: " Article 21.- Form of enterprises with 100% foreign investment capital 1. Enterprises with 100% foreign investment capital are those under the ownership of foreign investors and established in Vietnam by foreign investors who manage the enterprises themselves and take responsibility for the business results. Enterprises with 100% foreign investment capital already established in Vietnam are entitled to cooperate with one another and/or with foreign investors to establish new enterprises with 100% foreign investment capital in Vietnam. 2. Enterprises with 100% foreign investment capital are established in form of limited liability companies, which have the legal person status under the Vietnamese laws, are set up and operate from the date they are granted the investment licenses." 6. Article 31 is amended and supplemented as follows: " Article 31.- Reorganization of enterprises 1. The division, separation, merger, consolidation of enterprises, the change of investment forms (hereinafter referred collectively to as reorganization of enterprises) must be approved by the investment-licensing agencies according to the following contents and procedures: a/ "Enterprise division" means the division of the whole capital in cash and assets of a foreign-invested enterprise (called divided enterprise) to establish two or a number of new enterprises (called dividing enterprises). b/ "Enterprise separation" means the transfer of part of capital in cash and assets of a foreign-invested enterprise (called separated enterprise) to establish two or a number of new enterprises (called separating enterprises). c/ "Enterprise merger" means the transfer of the whole capital in cash and assets of one or a number of foreign-invested enterprises (called merged enterprises) to another foreign-invested enterprise (call merging enterprise) for merger into the latter. d/ "Enterprise consolidation" means the consolidation of the whole capital in cash and assets of two or a number of foreign-invested enterprises (called consolidated enterprises) to form a new foreign-invested enterprise (called consolidating enterprise). e/ "Change of investment forms" means the transformation of a project already granted investment license in one form prescribed by the Foreign Investment Law into another investment form prescribed by the Foreign Investment Law." The reorganization of enterprises must be consented by the Managing Boards (for joint-venture enterprises), or foreign investors (for enterprises with 100% foreign capital), or business cooperation parties (for business cooperation contracts). Reorganized enterprises shall have to compile dossiers according to the provisions in Clauses 2 and 3 of this Article and submit them to the investment licensing agencies for readjustment of their investment licenses and/or establishment of new foreign-invested enterprises according to the provisions of the Foreign Investment Law. In cases they are converted into Vietnamese enterprises, they shall have to make registration according to one of enterprise types specified in Clause 1, Article 2 of this Decree. 2. A dossier applying for the reorganization of an enterprise includes: a/ An application for reorganization of the enterprise; b/ The dossier on capital transfer (for cases of capital transfer); c/ The resolution of the Managing Board of the joint-venture enterprise or the decision of the investor (for enterprises with 100% foreign capital); d/ The new enterprise’s charter (except the case of conversion into a Vietnamese enterprise) or the amended and supplemented enterprise charter; e/ The joint-venture contract of the new enterprise or the amended and supplemented joint-venture contract; f/ The contract on merger or consolidation between enterprises; g/ The report on the enterprise’s operation and financial status before the reorganization; h/ The exposition on the reorganization of the enterprise; i/ The documents related to the land use right; j/ Other documents when requested by the investment licensing agencies. 3. The exposition on the enterprise reorganization shall contain the following principal contents: a/ Name and address of the representative at law; names and addresses of the enterprises before and after the enterprise reorganization; b/ Production and business objectives; c/ The labor employment plan; d/ The plan on settlement of the rights and obligations of the enterprises before and after the enterprise reorganization; e/ The time limit for the enterprise reorganization. 4. Decisions on enterprise reorganization shall be notified to the creditors and laborers within 15 days after they are approved. 5. Within 30 working days after the receipt of complete and valid dossiers, the investment licensing agency shall issue a decision to approve the enterprise reorganization in form of granting the investment license. In case of disapproval, the investment licensing agency must clearly justify in writing the reasons therefor. In cases where reorganized enterprises satisfy the conditions prescribed in Article 105 of this Decree, the procedures for registering for the investment licensing shall be carried out." 7. Article 32 is amended and supplemented as follows: " Article 32.- Inheritance of rights and obligations after the enterprise reorganization 1. After being reorganized and granted the investment licenses, the new enterprises shall inherit all the rights and obligations of the former enterprises, unless otherwise agreed upon by the involved parties and approved by the investment licensing agencies. These rights and obligations shall be exercised and performed according to the plans on settlement of enterprise rights and obligations stated in the enterprise reorganization expositions defined in Clause 3, Article 31 of this Decree. 2. Depending on fields, geographical areas, scales and conditions of investment by the reorganized enterprises, the preferences for enterprises after their reorganization shall be automatically applied according to the corresponding provisions of current law. 3. The reorganized enterprises shall publicly announce the establishment and operation termination according to the provisions in Articles 27 and 28 of this Decree." 8. Article 46 is amended and supplemented as follows: - Point b, Clause 1 is amended and supplemented as follows: "b/ The production projects other than the project types specified in Clauses 2 and 3 of this Article." - Point d, Clause 2 is amended and supplemented as follows: "d/ Production enterprises in industrial parks." - Point d, Clause 3 is amended and supplemented as follows: "d/ Enterprises developing infrastructure in industrial parks, export processing zones and hi-tech parks; export-processing enterprises in the production field." - To add the following paragraph to the end of Clause 3: "Preferences provided for at Point a, Clause 3 of this Article shall not apply to production projects in industrial parks with the product export percentage of under 50%, except for cases where the said projects satisfy two of the conditions prescribed at Points a, b and e, Clause 2 of this Article." - To add following Clause 7: "7. In cases where foreign-invested enterprises or business cooperation contracts invest in many fields and/or many geographical areas with different preferential enterprise income tax rates and make separate accounting, they shall be entitled to preferences according to each field or geographical area. In cases where they cannot make separate accounting, the preferences shall apply according to the investment capital ratio." 9. Clause 2 of Article 48 is amended and supplemented as follows: "2. The projects mentioned in Clause 2, Article 46 of this Decree shall enjoy the enterprise income tax exemption as follows: a/ Production enterprises in industrial parks having a product export percentage of under 50% and failing to satisfy the conditions prescribed at Points a, b and e, Clause 2 of Article 46, shall enjoy the enterprise income tax exemption for 2 years after their business activities yield profits. b/ The projects not mentioned at Point a, Clause 2 of this Article shall enjoy enterprise income tax exemption for 2 years after the profits are generated from their business activities and 50% reduction for the subsequent 3 years." 10. Article 57 is amended and supplemented as follows: - Clauses 5 and 6 are amended and supplemented as follows: "5. Foreign-invested enterprises and business cooperation parties investing in projects on the list of fields in which investment is particularly encouraged or in geographical areas with particularly difficult socio-economic conditions specified in Appendix enclosed with this Decree shall be exempt from import tax on production raw materials, supplies and assembly parts for 5 years after the commencement of production. 6. Foreign-invested enterprises and business cooperation parties investing in the production of mechanical, electrical and/or electronic assembly parts and spare parts shall be exempt from import tax on production raw materials, supplies and assembly parts for 5 years after the commencement of production." - To add the following Clause 10 to the end of Article 57: "10. The Ministry of Trade shall coordinate with the concerned ministries and branches in promulgating documents guiding the detailed classification of raw materials, supplies and assembly parts, which are exempt from import tax for 5 years after the commencement of production as specified in Clauses 5 and 6 of this Article." 11. Article 59 is amended and supplemented as follows: " Article 59.- Import tax calculation prices Prices for calculation of import tax on import goods shall comply with the provisions in Article 1 of the Government’s Decree No. 60/2002/ND-CP of June 6, 2002 prescribing the determination of tax calculation prices of import tax according to the principles of the Agreement on Implementation of Article 7 of the General Agreement on Tariff and Trade." 12. Clauses 1 and 3 of Article 67 are amended and supplemented as follows: "1. Foreign-invested enterprises and foreign business cooperation parties are entitled to purchase foreign currencies at the banks licensed to deal in foreign currencies so as to meet their current transactions and other permitted transactions according to the legislation on foreign exchange management." "3. The Vietnamese Government secures the support in balancing foreign currencies for foreign-invested enterprises and business cooperation parties investing in infrastructure construction and a number of other important projects in cases where the banks licensed to deal in foreign currencies fail to fully meet the foreign currency demands mentioned in Clause 1 of this Article." 13. Paragraph 1, Clause 2 of Article 81 is amended and supplemented as follows: "2. The value of the transferred technologies used for capital contribution shall be agreed upon by the parties." 14. Clause 1 of Article 83 is amended and supplemented as follows: "1. Foreign-invested enterprises and business cooperation parties are entitled to directly recruit Vietnamese and foreign laborers according to the provisions of the labor legislation." 15. Article 84 is amended and supplemented as follows: " Article 84.- Wages paid to Vietnamese laborers The minimum wage level and wages of Vietnamese laborers working in foreign-invested enterprises and business cooperation parties shall comply with the regulations of the Ministry of Labor, War Invalids and Social Affairs and be paid in Vietnam dong." 16. Article 85 is amended and supplemented as follows: " Article 85.- Land lease and payment of land rent and land use tax 1. Foreign-invested enterprises and business cooperation parties shall be leased land by the Vietnamese State for execution of investment projects and shall have to pay land rents according to the regulations of the Finance Ministry. 2. In cases where Vietnamese parties contribute capital with the value of the right to use the land, which has been transferred by other parties or assigned by the State with the collection of land use levy, and the already paid money amounts for the transfer or land use levy amounts do not originate from the State budget, such land shall not have to be converted into leased land. The Vietnam parties shall have to pay land use tax according to the current law provisions." 17. Article 88 is amended and supplemented as follows: " Article 88.- Competence to decide on land lease The provincial-level People’s Committees shall decide the land lease to foreign-invested projects according to the provisions of the land legislation." 18. Article 89 is amended and supplemented as follows: " Article 89.- Compensation, ground clearance and land lease dossiers 1. In case of land lease by the Vietnamese State, the People’s Committees of the provinces where exist investment projects shall have to organize the compensation, ground clearance and complete the land lease procedures. The expenses for compensation and ground clearance shall be accounted into the projects’ investment capital. The provincial-level People’s Committees shall negotiate with the enterprises which are leased land on the financial sources for effecting the compensation and ground clearance. 2. Where the Vietnamese party contributes capital with the land use right value, it shall have to make the compensation, clear the ground and complete the procedures for the land use right. The expenses for the compensation and ground clearance shall be accounted into the contributed capital of the Vietnamese party or agreed upon by the involved parties. 3. The compensation unit price shall comply with the common regulations of the State. 4. For investment projects licensed by the provincial-level People’s Committees, the land lease consideration shall be carried out simultaneously with the investment licensing consideration. 5. For investment projects licensed by the Ministry of Planning and Investment, the land-related documents enclosed with dossiers of application for investment licenses shall include the following contents: a/ The location and area of the land plot to be used; b/ The land rent rate proposed by the provincial-level People’s Committees on the basis of the land rent bracket set by the Finance Ministry; c/ The compensation and ground clearance plan. 6. Land lease and sub-lease procedures and dossiers shall comply with the guidance of the Ministry of Natural Resources and Environment." 19. Article 92 is amended and supplemented as follows: " Article 92.- Mortgage of land use right value and assets affixed to land 1. Foreign-invested enterprises may mortgage the land use right value and assets affixed to land during the land lease or sublease terms at the Vietnamese credit institutions licensed to operate in Vietnam according to the provisions of law in the following cases: a/ The foreign-invested enterprises have already paid the land rent for many years, if the paid land lease term remains for at least 5 years; b/ The joint-venture enterprises to which the Vietnamese parties contribute capital with the land use right value, if the duration of capital contribution with the land use right remains for at least 5 years. 2. The mortgaged land use right value includes expenses for compensation and ground clearance and paid land rent minus the land rent already paid for duration in which the land was used. 3. The dossiers and procedures for mortgaging land use right value shall comply with the guidance of the Ministry of Natural Resources and Environment and the State Bank of Vietnam." 20. Article 95 is amended and supplemented as follows: " Article 95.- Appraisal of planning and architectural schemes For investment projects in the field of construction of bridges, roads, air fields and ports; industrial projects of group A; infrastructures of industrial parks, export processing zones and hi-tech parks; urban centers, tourist resorts and entertainment and recreation centers; works for art performance; advertisement works; residential houses, hotels, offices and apartments; schools; hospitals; and sport facilities, their investment license application dossiers must be enclosed with the projects’ general ground planning drawings. The appraisal of the projects’ planning and architectural scheme shall be implemented in the process of appraising the investment projects." 21. Clause 1 of Article 98 is amended and supplemented as follows: "1. The investors are held responsible before the Vietnamese law for the quality and safety of construction works; fire and explosion prevention and fighting; environmental protection; labor safety and sanitation during the period of p

Nghị định 27/2003/NĐ-CP