Note: Supporting industry/Supplying industry is referred to as an industry that manufactures materials, spare parts, details, accessories and semi-finished products for supplying to industries that manufacture and assemble finished products for use as production materials or consumer goods, or for supplying to the stage of assembling and manufacturing finished products (Decision No.12/2011/QT-TTg)
1. Policies for Supporting Industries Development
Top priorities are given to supporting industry development by the Vietnamese Government, which is expected to change the face of Vietnam’s industrial sector. In middle and long-term supporting industries play a key role in promoting the development of Vietnam’s main industries. Furthermore, the potential to develop Vietnam’s service industries is great as it has abundant a labor supply and a strong capacity to absorb and incorporate new technologies.
Supporting industry is highly encouraged in 6 main areas: mechanical engineering, electronics – IT, textiles and garments, leather and shoes, materials and spare-parts for high-tech industries.
Government Policies:
The Vietnamese Government is now working on introducing new legal documents on the orientation for the development of the supporting industry underscoring the following points:
- Provide key products and sectors which are listed in supporting industry
- Provide detailed criteria to identify sectors, products which shall enjoy the special incentives for supporting industry development
- Analyze and provide more attractive incentives for potential projects with eligible products in the sectors according to List of sectors and products of supporting industry by the Government; projects with intensive utilization of local raw materials and supplies.
Currently offered incentives:
- Import duty exemption for 05 years with: equipments, machines; special-use means of transportation; components, detailed assemblies, spare parts for means of transport; raw materials, supplies and accessories which cannot be domestically produced yet; and are imported for production activities of investment projects in domains in which investment is specially encouraged in Appendix I to Decree 87/2010/NĐ-CP.
- Tax holiday for imported materials, equipments serving the productions of key mechanical products in Appendix I, Decision 10/2009/QD-TTg.
- Import duty incentives offers to equipments, machines; special-use means of transportation; components, detailed assemblies, spare parts for means of transport; raw materials, supplies and accessories which cannot be domestically produced yet; and are imported for production activities of investment projects in domains in which investment is specially encouraged in Appendix I to Decree 87/2010/NĐ-CP.
- Tax holiday and incentives for Corporate income tax; land-use right and land lease exemption or reduction for projects in supporting industry serving the high-tech areas
- Some projects in the sector might receive special incentives. In this case, investors make the master plan of the projects according to current regulations, which shall include proposals for special incentives, submit to the board of appraisal to review and submit to the Prime Minister for final decision.