Nghị định 51/1999/NĐ-CP

DECREE No DECREE No. 51/1999/ND-CP OF JULY 8, 1999 DETAILING THE IMPLEMENTATION OF LAW No. 03/1998/QH10 ON DOMESTIC INVESTMENT PROMOTION (AMENDED) THE GOVERNMENT Pursuant to the Law on Organization of the Government of September 9, 1992; Pursuant to Law No. 03/1998/QH10 of May 20, 1998 on Domestic Investment Promotion (amended); At the proposal of the Minister of Planning and Investment, DECREES: Chapter I GENERAL PROVISIONS Article 1.- Scope of regulation This Decree regulates the following investment activities: 1. Investment in setting up new production and business establishments of different economic sectors; 2. Investment in production lines, expansion of production scale and renewal of technologies, including: investment in setting up new workshops; installation of new production lines; installation of new equipment and facilities to supplement the existing ones; installation of new equipment and machinery to partially or fully replace equipment and machinery of the existing production lines; 3. Investment in the improvement of environment and ecology; relocation of production establishments out of the urban areas; development of services in support of research and development, experimenting establishments and laboratories in service of scientific research; 4. Purchase of shares from the equitized State enterprises and joint-stock companies and contribution of capital to enterprises of different economic sectors; 5. Investment in the forms of Build- Operate- Transfer (BOT); Build- Transfer-Operate (BTO); and Build- Transfer (BT) contracts. Article 2.- Objects of application The Law on Domestic Investment Promotion shall apply to: 1. Limited liability companies; 2. Joint-stock companies; 3. Partnerships; 4. Private enterprises; 5. Cooperatives, unions of cooperatives; 6. State enterprises; 7. Private, people-funded and semi-public education and training establishments; private and people-funded medical establishments; and national culture establishments, lawfully established and operating; 8. Enterprises of political organizations, socio-political organizations and occupational societies, which have registered their business according to the provisions of law; 9. Individuals and business groups established and operating under Decree No. 66-HDBT of March 2, 1992 of the Council of Ministers (now the Government). 10. Vietnamese citizens, overseas Vietnamese and foreigners permanently residing in Vietnam who buy shares from or contribute capital to Vietnamese enterprises. Article 3.- Laws applicable to investment by overseas Vietnamese 1. The overseas Vietnamese making investment under the Law on Domestic Investment Promotion include people with Vietnamese nationality and people of Vietnamese origin, who permanently reside and earn their living overseas. 2. Overseas Vietnamese may select either the Law on Foreign Investment in Vietnam or the Law on Domestic Investment Promotion for their investment projects in Vietnam, but each project is entitled to either of the two said laws. 3. Enterprises set up by overseas Vietnamese, enterprises set up jointly by Vietnamese citizens and overseas Vietnamese shall comply with the Law on Enterprises and the Law on Cooperatives. Article 4.- Laws applicable to investment by foreigners permanently residing in Vietnam 1. Foreigners permanently residing in Vietnam and investing in the country under the Law on Domestic Investment Promotion are those with foreign citizenship and those without any nationality, who permanently reside and earn their living in Vietnam. 2. Foreigners permanently residing in Vietnam may select either the Law on Foreign Investment in Vietnam or the Law on Domestic Investment Promotion for their investment projects, but each project is only entitled to either of the two said laws. 3. Enterprises set up by foreigners permanently residing in Vietnam, enterprises set up jointly by Vietnamese citizens and foreigners permanently residing in Vietnam and enterprises set up jointly by Vietnamese citizens, overseas Vietnamese and foreigners permanently residing in Vietnam shall comply with the Law on Enterprises and the Law on Cooperatives. Article 5.- Competence to decide the share purchase and capital contribution by foreign investors 1. Foreigners may contribute capital or purchase shares with a value of not more than 30% of the charter capital of concerned Vietnamese enterprises in the branches, trades and domains on the list ratified for each period by the Prime Minister, at the proposal of the Minister of Planning and Investment. 2. The capital contribution and share purchase by foreign investors with a value of not more than 30% of the charter capital of concerned State enterprises on the list ratified by the Prime Minister are stipulated as follows: a/ For the centrally-run enterprises, the Finance Minister shall decide; b/ For the locally-run enterprises, the presidents of the People�s Committees of the provinces and centrally-run cities shall decide at the proposal of the directors of the provincial/municipal Planning and Investment Services. 3. The capital contribution or share purchase by foreign investors with a value of not more than 30% of the charter capital of enterprises of other economic sectors, which belong to those branches, trades and domains defined in the list already ratified by the Prime Minister shall be effected under contracts signed between the foreign investors and concerned enterprises. In this case, enterprises shall have to notify in writing to the agencies that have granted them the business registration certificates within 15 days after contributing capital or purchasing shares. Chapter II INVESTMENT GUARANTY AND SUPPORT Article 6.- Public announcement of land-use planning The People�s Committees of the provinces and centrally-run cities shall annually publicize the land-use planning which has been ratified by the competent State agency; and publicize the unused land fund and the lease land fund together with the list of the locally-run projects called for investment, on the mass media and by publicly posting up at offices of the provincial and district People�s Committees so that the investors having a demand therefor may register the land renting or participate in bidding for renting. Article 7.- Investors� rights in the use of land Investors allocated or leased land by the State or transferred with the land-use right by others shall enjoy the rights provided for by the land legislation; be entitled to the land-use levy or land-rent exemption or reduction as well as the land-use tax exemption, according to the provisions of Articles 17, 18 and 19 of this Decree. Article 8.- Support in form of infrastructure development investment 1. On the basis of the development planning and demand in each period in the regions meeting with socio-economic difficulties and regions meeting with special socio-economic difficulties, the State shall invest in the construction of small- and medium-sized industrial parks, ensuring the technical infrastructure regarding electricity and water supply, water drainage, communication and waste treatment so that the investors may use them in service of their production and business with preferential terms. 2. In the regions meeting with socio-economic difficulties and regions meeting with special socio-economic difficulties, the State shall invest in the construction or support the investment in the construction of infrastructure projects outside the industrial parks, export-processing zones and hi-tech parks (including: traffic roads, bridges, sewers, water supply and drainage system, waste treatment system), so as to create favorable conditions for the investors� investment, production and business activities. 3. The State encourages and creates favorable conditions for investors to set up production and business establishments in industrial parks, export-processing zones and hi-tech parks or relocate the production establishments from urban areas to industrial parks or export-processing zones through the supportive policies on preferential investment loans and tax preferences. Article 9.- Capital contribution and competence to decide capital contribution by the State 1. The State shall contribute capital to enterprises with priority given to those located in the regions meeting with socio-economic difficulties and regions meeting with special socio-economic difficulties in order to implement investment projects in form of BOT, BTO or BT contracts or other forms through the Development Support Fund and the State-owned credit institutions, depending on the nature of each project in each period. 2. The State�s capital contribution to BOT enterprises shall be effected under the Regulation on investment in form of BOT contracts applicable to domestic investment, issued together with the Government�s Decree No. 77-CP of June 18, 1997. Article 10.- Investment support fund 1. The State shall set up and encourage the setting up of investment support funds. Investment support funds set up with capital jointly contributed by organizations and/or individuals shall operate under the Law on Credit Institutions. The investment support funds shall provide medium- and long-term loans with preferential interest rates or partial interest-rate support for investment projects entitled to investment credit guaranty. The Government shall effect the re-guaranty through Vietnam State Bank as for the credits of the investment support funds. 2. The Government shall set up the Development Support Fund in order to provide the State�s development investment support in such forms as investment loans; post-investment support; and investment credit guaranty under the current law provisions on the State�s development investment credits. To annul the Prime Minister�s Decision No. 808/TTg of December 9, 1995 on the establishment of the National Investment Support Fund and the earlier regulations which are contrary to the Government�s Decree on organization and operation of the Development Support Fund. 3. The functions, tasks and powers as well as organizational structure and operation mechanism of the Development Support Fund shall be specified in the Fund�s Charter to be ratified by the Government. Article 11.- Export support fund 1. The Government shall set up and encourage the setting up of export support funds. Export support funds set up with capital jointly contributed by organizations and/or individuals shall operate under the Law on Credit Institutions. 2. The National Export Support Fund set up by the Government is a non-bank credit institution operating under the Law on Credit Institutions. The National Export Support Fund shall be created and developed from the State budget capital sources and capital contributed by credit institutions, enterprises, organizations and individuals inside and outside the country on the principle of voluntariness. The Ministry of Finance shall assume the prime responsibility and coordinate with the Ministry of Planning and Investment and the Ministry of Trade in elaborating and submitting to the Prime Minister a project on the setting up of the National Export Support Fund. 3. The National Export Support Fund shall provide preferential export credits and export credit guaranty in order to support enterprises producing export goods, conducting export business and expanding the export market. The concrete preferential export credit limits and export credit guaranty limits for export goods manufacturing and trading projects are stipulated in Clause 2, Article 30 of this Decree. 4. The functions, tasks and powers as well as organizational structure and operation mechanism of the National Export Support Fund shall be specified in the Fund�s Charter to be ratified by the Prime Minister. Article 12.- National Scientific and Technological Development Support Fund 1. The Government shall set up the National Scientific and Technological Development Support Fund. The National Scientific and Technological Development Support Fund is a non-bank credit institution operating under the Law on Credit Institutions. The National Scientific and Technological Development Support Fund shall be created and developed from the State budget capital sources and capital jointly contributed by credit institutions, enterprises, organizations and individuals inside and outside the country on the principle of voluntariness. The Ministry of Science, Technology and Environment shall coordinate with the Ministry of Planning and Investment and the Ministry of Finance in elaborating and submitting the plan on the establishment of the National Scientific and Technological Development Support Fund. 2. The National Scientific and Technological Development Support Fund shall provide credits with favorable conditions or preferential interest rates, in order to support investors in studying and applying scientific, technical and technological advances, technological transfer and renewal. 3. The functions, tasks and powers as well as organizational and managerial structure and operation mechanism of the National Scientific and Technological Development Support Fund shall be stipulated in the Fund�s Charter to be ratified by the Prime Minister. 4. The Ministry of Science, Technology and Environment shall popularize and guide the technology transfer, creating favorable conditions for investors to use with preferential charges new technologies created with the State budget capital. Article 13.- Encouragement and support for development of investment support services. 1. The Government shall encourage and assist organizations, enterprises and individuals to set up organizations which provide such investment support services for domestic investors, as: a/ Investment consultancy, management consultancy and technology transfer consultancy; vocational training, technical and managerial skill training; b/ Provision of market information, scientific-technical and technological information; c/ Intellectual property right and technology transfer; d/ Marketing, trade promotion; e/ Establishment of production and business branch, trade and export societies; f/ Establishment of designing and experimenting centers to support the development of medium- and small-sized enterprises. 2. The investment support service activities mentioned in Points a, b, c and d, Clause 1 of this Article shall be classified into the domains and business lines eligible for investment preferential treatment as prescribed in List A of the Appendix issued together with this Decree. 3. The State management agencies are strictly prohibited from providing investment consultancy services to earn profits in any forms. Article 14.- Provisions on the application of prices to investment projects under the Law on Domestic Investment Promotion 1. Enterprises set up by overseas Vietnamese directly investing in Vietnam, enterprises set up by foreigners permanently residing and directly investing in Vietnam and enterprises set up jointly by Vietnamese citizens, overseas Vietnamese and foreigners permanently residing in Vietnam, that have investment projects under the Law on Domestic Investment Promotion shall enjoy the same input prices regarding land, goods, raw materials, fuels, materials, supplies and other services like the domestic enterprises of the same category. 2. Investors being overseas Vietnamese or foreigners permanently residing in Vietnam mentioned in Clause 1 of this Article shall be entitled to apply prices and charges of services for their daily life (travelling, accommodation, hotel, electricity, water, post and telecommunication charges) like the Vietnamese residing in the country. The Ministry of Planning and Investment shall coordinate with the relevant agencies in issuing a Circular guiding the provisions of this Article. Chapter III INVESTMENT PREFERENCES Article 15.- Conditions for investment preferences An investment project that meets one of the following conditions shall be entitled to investment preferences: 1. Investment in branches and trades defined in List A of the Appendix issued together with this Decree. 2. Investment projects in any production and business domains, branches and trades, which are not banned by law and which employ an average number of laborers in a year at least as follows: a/ In urban areas of categories 1 and 2: 100 laborers; b/ In the areas defined in List B or C of the Appendix issued together with this Decree: 20 laborers; c/ In other areas: 50 laborers. Article 16.- Regions eligible for investment preferential treatment Investment projects in the following regions shall enjoy investment preferential treatment: 1. Regions meeting with socio-economic difficulties defined in List B of the Appendix issued together with this Decree; 2. Regions meeting with special socio-economic difficulties defined in List C of the Appendix issued together with this Decree. Article 17.- Land-use levy exemption/reduction Investors assigned land by the State and paying the land-use levy for their production and business activities shall enjoy the following land-use levy preferences: 1. 50% reduction of the land-use levy, if the investment projects fall into branches, trades and domains defined in List A of the Appendix issued together with this Decree; 2. 75% reduction of the land-use levy, if the investment projects are executed in the regions defined in List B of the Appendix issued together with this Decree; 3. Exemption of land-use levy in the following cases: a/ The investment projects fall into branches, trades and domains defined in List A and executed in the regions defined in List B of the Appendix issued together with this Decree; b/ The investment projects are executed in the regions defined in List C of the Appendix issued together with this Decree. Article 18.- Land-rent exemption/reduction 1. Investors having investment projects defined in Article 15 of this Decree shall enjoy the land-rent exemption from the time of signing the land-renting contracts as follows: a/ 3-year exemption, for projects that meet one of the conditions prescribed in Article 15 of this Decree; b/ 6-year exemption, for projects that fully meet two conditions prescribed in Article 15 of this Decree. 2. Investors having investment projects in the regions defined in List B shall enjoy the land-rent exemption from the time of signing the land-renting contracts as follows: a/ 7-year exemption, for projects in the regions defined in Section II, List B; b/ 10-year exemption, for projects in the regions defined in Section I, List B; 3. Investors having investment projects in the regions defined in List B, who at the same time satisfy the conditions prescribed in Article 15 of this Decree shall enjoy the land-rent exemption from the time of signing the land-renting contracts as follows: a/ 11-year exemption, for List A- investment projects; b/ 13-year exemption, for projects that fully meet two conditions prescribed in Clauses 1 and 2, Article 15 of this Decree. 4. Investors having investment projects in the regions defined in List C shall enjoy the land-rent exemption from the time of signing the land-renting contracts as follows: a/ 11-year exemption, for projects in the regions defined in Section II, List C; b/ 15-year exemption, for projects in the regions defined in Section I, List C; 5. The List-A investment projects which are implemented in the regions defined in List C shall enjoy the land-rent exemption throughout the duration of their implementation. Article 19.- Land-use tax exemption/reduction 1. Investors assigned land by the State and having investment projects specified in List A issued together with this Decree shall enjoy the land-use tax exemption/reduction from the time of being assigned land as follows: a/ 50% reduction of the land-use tax for 7 years for investment projects specified in Section II, List A; b/ Exemption of the land-use tax throughout the dura