Forms of investment support entitled to foreign investor when investing in Vietnam

Through investment support, the Government of Vietnam creates opportunities for foreign investors to enjoy certain favorable financial conditions, technical infrastructure, science and technology for the purpose of attracting domestic and foreign investment. According to the Law on Investment 2020, investment support is provided for hi-tech enterprises, science and technology enterprises, science and technology organizations, enterprises investing in agriculture and rural areas, enterprises investing in education, dissemination of laws, and other entities. Specifically, the above subjects are assisted in investment through 07 forms including[1]:

1. Support in development of technical infrastructure and social infrastructure inside and outside the perimeter of the investment project is a form of support in which the Vietnam’s Government shall provide support for part of the capital investment in development from the state budget and concessional loan capital or other mobilization methods in order to synchronously develop the technical infrastructure to serve the socio-economic activities pursuant to the planning decided or approved in accordance with regulations of the Law on Planning.
2. Support in training and development of human resources is a form of support attached to the educational development policy. Specifically, the Vietnam’s Government has a policy of giving priority to budget spending on vocational education and higher education activities. In addition, measures to mobilize and encourage educational socialization are also applied to attract investment sources to establish vocational education schools, universities, and training support funds to develop high-quality human resources to meet the business needs of investors.
3. Credit support is a form of support to help solve capital problems, whereby financial funds are established and provide credit guarantees for investors to get loans from commercial bank. In addition, Vietnam also has policies to encourage commercial banks to lend and encourage privately-established funds to contribute capital to enterprises, creating a strong financial foundation for investment activities.
4. Assist in access to business premises; support in relocation of business establishments under decisions of regulatory agencies is a form of support formed on the basis of the Land Law, allowing investors to access to the business premises through land allocation, land lease, or recognition of land use rights by the Vietnam’s Government, or transfer of land use rights from other land users. These support forms are concretized through the construction of industrial zones, export processing zones, hi-tech zones and economic zones, with available socio-technical infrastructure for investors as well as financial support policies for the relocation of production facilities out of the city and urban areas.
5. Support in science, technology and technology transfer is a form of support implemented through science and technology service provider. Besides, there is also a policy of communication, disseminating scientific and technological knowledge, building a national database and statistics on science and technology to provide scientific and technological information to serve research, training, production and sales of organizations and individuals.
6. Support in market development and information provision is a form of support for the purpose of solving difficulties in output market for enterprises through the implementation of National Trade Promotion Programs.
7. Support in research and development is a form of support implementing by ensuring the competencies of science and technology organizations; at the same time building and developing a science and technology market. Specifically, the Vietnam’s Government will assign science and technology tasks and give incentives and support for science and technology entities engaged in scientific and technological activities in order to increase their domestic research capacity and promote the service of research development … to create breakthrough solutions, promote investment activities.

In general, the current forms of investment support are very diverse, contributing to improving the competitiveness of enterprises. When investing in Vietnam in the fields entitled to support, Japanese investors should pay attention to carefully study the forms of support, in order to facilitate the investment process and to achieve the goal of profit and efficiency.

[1] Law on Investment 2020, Article 18