Preferential policies for investment activities in Lam Dong province

To strengthen investments in Lam Dong, the Provincial People’s Committee has issued Decision 126/2002/QD-UB dated September 16, 2002, providing tax and land rental incentives and assistance policies on education and training for investors.

Tax policies

Corporate income tax: Investors can enjoy a preferential income tax rate of 10 per cent during the project implementation process. They will be exempted from corporate income tax for a period of four years commencing from the first profit-making year and will then be entitled to a 50-per cent reduction for a further four years (in some cases including contracts of Build-Operate-Transfer (BOT), Build-Transfer-Operate (BTO), Build-Transfer (BT), and projects involved in the high-tech field, forest plantation, building and trading in infrastructure works, investors may enjoy a 50 per cent tax reduction for a period of eight years). However, the tax reduction and exemption are not applied to investment projects in some fields, such as finance and banking, insurance, trade, and services outside industrial parks, export processing zones and high-tech areas. Enterprises will be refunded 100 per cent of corporate income tax in the case of reinvestment. When transferring profits abroad, they will be entitled to a tax rate of three per cent.

Import tax: Foreign-invested and partnership enterprises are exempted from import tax on goods used as fixed assets including equipment, machines, means of transport, which are part of a technology production line, vehicles used for transporting staff (24 seats upward and waterway transport means), and construction materials, which could not be domestically produced. The import tax exemption on such goods [used as fixed assets] is also applied to projects to expand production and replace and renew technologies. Additionally, the province also imposes no import taxes on input materials such as seedlings, livestock, and special herbicides for agricultural and forestry projects. The exemption period will last for five years from the date the projects start production.

Value-added tax: Investors will be exempted from value-added tax (VAT) for equipment, machines, and construction vehicles that could not be locally manufactured. They will be also exempted from VAT taxes on imports, which will then become fixed assets of foreign-invested enterprises or on imports for carrying out business cooperation contract projects, and construction materials not internally manufactured.

Other kinds of duties will be applied pursuant to prevailing regulations at the time of tax payment.

Preferential policies on land leasing

Unit: (US$/sq.m/year)

Investors are free from land rental during the construction period of their projects and a 90 per cent land rental reduction will be applied for afforestation projects for the following eleven years.

Regarding compensation for site clearance, the province will take responsibility for implementing site clearance, building essential infrastructure works for traffic, electricity, and other public utilities, and large-scale projects in industrial zones and tourism sites. If investors advance a sum of money for implementation, it will be gradually deducted from their yearly State budget contributions in accordance with the regulations by the province. If foreign and local investors come forward and organise initial vocational training classes for labourers with registered family in Lam Dong they will be offered 30 per cent of expenses for primary labourers and 50 per cent for training workers of the second grade upwards under the vocational training project approved by the relevant agency.