1. Banned business lines
Provision of debt collection services is the banned business lines state in Article 6.
2. The number of business line subject to conditional business investment is reduced to 227
From 01 January 2021, the number of business line subject to conditional business investment is reduced to 227 (currently 243 business lines). In which, a number of business line are no longer required conditions such as franchising, logistics services, shipping agency services, ... and some additional lines such as water trading (clean water), architectural services, data center services, electronic identification and authentication services….
3. Forms eligible for investment incentives and beneficiaries of investment incentives
Clause 1 Article 15 provides a new form of investment incentives, that is accelerated depreciation, increasing deductible expenses when calculating taxable income.
Compared with the current regulations, Article 15 has added more subjects to benefit from investment incentives.
4. Business lines eligible for investment incentives
Clause 1, Article 16 has been added some business lines as below:
- Manufacturing and development of science and technology products in accordance with regulations of law on science and technology;
- Manufacturing of products on the List of prioritized supporting products;
- Higher education;
- Storage of medicinal products; manufacturing of medical equipment;
- Manufacturing of goods and provision of services for the purposes of creating or participating in value chains and industrial clusters.
5. Special investment incentives and assistance
In Article 20, the Government shall decide to apply special investment incentives and assistance with a view to encouraging the development of some investment projects that exert significant socio-economic effects, include:
- Projects on establishment (including the expansion of such establishment project) of innovation centers and research and development centers with a total investment capital of at least VND 3,000 and disbursing at least VND 1,000 billion within 03 years from the issuance date of the investment registration certificate or the approval for investment guidelines; the National Innovation Center established under the Prime Minister's decision;
- Investment projects in the business line eligible special investment incentives with an investment capital of at least VND 30,000 billion and disbursing at least VND 10,000 billion within 03 years from the issuance date of the investment registration certificate or the approval for investment guidelines.
Levels of incentives and time limit for application of special incentives are prescribed by the Law on Corporate Income Tax and the Law on Land.
Forms of special investment assistance are the same as those mentioned in Clause 1 Article 18 of this Law.
Special investment incentives and assistance set out in this Article do not apply to:
- Any investment project that has been granted the investment certificate, the investment registration certificate or the decision on investment guidelines before the effective date of this Law;
- The investment projects mentioned in Clause 5 Article 15 of this Law.
The Government shall request the National Assembly to decide to apply investment incentives other than those specified in this Law and other laws if it is necessary to encourage the development of a project of special importance or a special administrative - economic unit.
6. A list of business line restricted from market access will be issued for foreign investors
In Article 9, Foreign investor will be applied condition to access market as domestic investor, except some cases stated in business line restricted from market access for foreign investor as below:
- Business lines not allowed in market access;
- Business lines allowed in market with conditions.
In the coming time, the Government will issue the above list to apply when the Law on investment 2020 is effective.
7. Market access conditions applied to foreign investors
Article 9 stated that market access conditions applied to foreign investors specified in the List of business lines restricted to foreign investors include:
- Ratio of the foreign investor’s charter capital in a business entity;
- Investment method;
- Scope of investment;
- Capacity of the investor; partners participating in the investment activities;
- Other conditions specified in the Laws and Resolutions of the National Assembly, Ordinances and Resolutions of the Standing Committee of the National Assembly, Decrees of the Government and international agreements to which the Socialist Republic of Vietnam is a signatory.
In addition, at point c, clause 1, Article 22, before establishing an economic organization, the foreign investor must have an investment project, carry out the procedures for issuance or modification of the Investment Registration Certificate, except in case of establishing a small and medium-sized creative start-up enterprise and an investment fund for creative startups in accordance with the law on support for small and medium-sized enterprises.
8. Change in the ratio of holding charter capital applicable to foreign investors when conducting investment activities
In clause 1 Article 23, When establishing a business entity, making investment by contributing capital, purchasing shares or purchasing stakes of a business entity or when making investment under a business cooperation contract in one of the following cases, the foreign investor must satisfy the conditions and follow investment procedures applied to foreign investors:
- Over 50% of its charter capital or more is held by a foreign investor(s) or the majority of the general partners are foreigners if the business entity is a partnership;
- Over 50% of its charter capital or more is held by a business entity(ies) mentioned in Point a of this Clause;
- Over 50% of its charter capital or more is held by a foreign investor(s) and a business entity(ies) mentioned in Point a of this Clause.
(According to current regulations, the above ratio is 51%)
9. There are only 4 cases where investors do not have to deposit to ensure the implementation of investment projects
According to the Law on Investment 2020, remove the case that "investors are non-business units with revenue, hi-tech park development companies are established under decisions of state agencies competent to implement investment projects funded by the State such as: land allocation, land lease for the development of infrastructure of industrial parks, export processing zones, hi-tech parks and functional areas in economic zones "must make a deposit to ensure the implementation of investment projects.
10. New point about where the investment project file is submitted
According to Articles 34, 35 and 36, there has been a change in the place of submitting investment project documents, adding the Ministry of Planning and Investment.
11. Conditions for the grant of investment registration certificates for investment projects not subject to investment policy approval
For investment projects not subject to investment policy approval specified in Articles 30, 31 and 32, the Investor shall be granted an investment certificate if it satisfies the conditions specified in Article 38. Specifically The conditions are as follows:
- The investment project does not involve any banned business line;
- There is a location for execution of the investment project;
- The investment project is conformable with the planning specified in Point a Clause 3 Article 33 of this Law;
- The investment per m2 (or investment per employee) is not smaller than the minimum requirement.
- Market access conditions applied to foreign investors are satisfied.
12. Business lines banned from outward investment
Article 53 has added the following business lines where outward investment is prohibited:
- Business lines specified in Article 6 of this Law and relevant international agreements.
- Business lines with technologies and products banned from export in accordance with the law on foreign trade management.
- Business lines banned from business investment in accordance with laws of the host countries.
13. Business lines subject to conditional outward investment
Article 54 stipulates that when Vietnamese investors investing in the following industries and trades overseas, from January 1, 2021, certain conditions must be met.
- Banking;
- Insurance;
- Securities;
- Press, radio and television;
- Real estate business.
Conditions specified in laws, resolutions of the National Assembly, ordinances, resolutions of the Standing Committee of the National Assembly, decrees of the Government and international treaties on investment that the Socialist Republic of Vietnam is a member.