Investment Incentive Procedures and Governing Bodies

What Are Investment Incentives?

Investment incentives are support policies provided by the Vietnamese government to encourage businesses investing in prioritized industries or locations. Common incentives include:

• Preferential corporate income tax (CIT)
• Land rental exemptions or reductions
• Import duty exemptions
• Infrastructure and administrative support

To enjoy these benefits, investors must comply with Vietnam’s investment regulations and procedures.

Do Businesses Need to “Apply” for Investment Incentives?

Under Vietnam’s Investment Law 2020, there is no separate procedure officially called “applying for investment incentives.”

Instead, investors must:

• Determine whether their project qualifies for incentives
• Declare and apply the incentives according to regulations
• Work with the relevant authorities during the investment process

Investment incentives are typically stated in:

• Investment Registration Certificate (IRC)
• Investment policy approval documents
• Tax and land-related records

Process for Determining and Applying Investment Incentives

Step 1: Determine Whether the Project Qualifies

Businesses should review:

• Investment sector
• Project location
• Investment capital scale
• Type of industrial park or economic zone

Projects in incentivized industries, preferential locations, high-tech sectors, or large-scale investments may qualify for incentives under Vietnamese law.

Step 2: Prepare Investment Documents

Depending on the project type, required documents may include:

• Investment registration dossier
• Investment project proposal
• Company legal documents
• Financial capability documents
• Land lease or factory lease agreement
• Technology explanation report (if applicable)

Preparing accurate documents from the beginning helps reduce processing delays.

Step 3: Apply for an Investment Registration Certificate (IRC)

For projects requiring an IRC, the investment registration authority will evaluate:

• Investment conditions
• Project location
• Business sector
• Eligibility for investment incentives

Investment incentives may be recorded directly in the IRC or related approval documents.

Step 4: Complete Tax and Land Procedures

After project implementation, businesses continue working with:

• Tax authorities
• Customs authorities
• Natural resources and environment authorities

to apply specific incentives such as:

• Corporate income tax exemptions or reductions
• Import tax exemptions
• Land rental incentives

Which Authorities Approve Investment Incentives?

Different authorities are responsible depending on the type of incentive.

1. Department of Finance or Industrial Park Management Authority

These agencies usually process initial investment procedures for:

• Industrial park projects
• FDI projects
• Projects requiring IRC issuance

In many provinces, Industrial Park Management Boards are authorized to issue investment certificates and support investment incentive procedures.

2. Tax Authorities

Tax authorities directly manage and apply:

• Corporate income tax incentives
• Tax exemptions and reductions
• Depreciation and deductible expense policies

Businesses must properly declare incentives to comply with tax regulations.

3. Customs Authorities

For import duty exemptions on machinery, equipment, or materials, businesses must work with customs authorities.

4. Natural Resources and Environment Authorities

Authorities responsible for land-related incentives include:

• Land rental exemptions
• Water surface rental incentives
• Land infrastructure policies

These are usually handled by natural resources departments or industrial park management authorities.

Important Notes When Applying Investment Incentives

Businesses Must Self-Assess Eligibility

Under current regulations, businesses are responsible for determining whether they qualify for incentives and must retain supporting documents.

Incorrect application of incentives may result in:

• Tax reassessment
• Administrative penalties
• Additional financial obligations

Incentives Should Be Evaluated Early

Many FDI companies currently choose:

• Industrial parks in disadvantaged areas
• High-tech parks
• Coastal economic zones

to maximize tax and land-use benefits from the beginning of the investment process.

Current Investment Incentive Trends in Vietnam

Vietnam is currently prioritizing incentives for sectors such as:

• High technology
• Logistics
• Supporting industries
• Green energy
• Data centers
• Semiconductor and AI industries

Many provinces are also implementing “one-stop service” mechanisms to accelerate investment procedures.

Conclusion

The process of applying investment incentives in Vietnam involves multiple authorities, including investment registration agencies, tax authorities, customs authorities, and land management agencies.

Businesses should carefully evaluate eligibility conditions, prepare complete documentation, and follow legal procedures correctly to maximize investment benefits and minimize legal risks.

References

• Investment Law 2020
  https://thuvienphapluat.vn/van-ban/Dau-tu/Luat-Dau-tu-2020-427301.aspx
• Decree 31/2021/ND-CP
  https://thuvienphapluat.vn/van-ban/Dau-tu/Nghi-dinh-31-2021-ND-CP-huong-dan-Luat-Dau-tu-470262.aspx
• Ministry of Planning and Investment of Vietnam
  https://mpi.gov.vn
• Ministry of Finance of Vietnam
  https://mof.gov.vn