Hanoi steps up efforts to attract investment in IZs
Hanoi steps up efforts to attract investment in IZs
Hanoi is supporting enterprises to deeply understand new customs and tax regulations in order to minimise risks in export-import activity, boosting investment in local industrial zones (IZs).
Simplified administrative formalities in IZs
According to deputy head of Hanoi Industrial and Export Processing Zones Management Authority Nguyen Duc Quang, there are nine active IZs in Hanoi, with another one preparing to call for investment.
IZs in Hanoi are expected to attract $230 million in the fourth quarter of 2018, and increase revenue to $1.77 billion.
Agreeing with Quang, although investment has boosted the growth of IZs and made valuable contributions to the city’s socioeconomic development, there are still insufficiencies in land clearance, the leasing price of land, and procedures. Especially, limited information on tax incentives and customs regulations has been limiting investments in Hanoi’s IZs.
The Master Plan on Hanoi’s IZ Development until 2020 set out a schedule to develop 17 industrial and hi-tech parks on a land area of 3,500 hectares.
According to Quang, to support business and manufacturing activities as well as extricate enterprises operating in IPs from difficulties, the management board has been trying to improve administrative formalities, for instance, by issuing Certificates of Origin (C/O) within two hours by 3rd level public services (the service which enables applicants to fill in and submit all documents online, but make payment and receive results directly at supply units), reducing the time and cost of 18 administrative formalities by 25 per cent, curtailing the number of administrative formalities to 77.
Moreover, they are also making efforts to approach and give timely support to enterprises to acces incentiveswhen investing in the IZs.
Accustoming entrepreneurs to customs regulations and tax incentives
According to a representative of the General Department of Vietnam Customs, businesses should have clear understanding of customs regulations for smooth import-export flows and to eliminate possible risks.
Concurrently, it is essential to have a thorough grasp of customs clearance, pending customs process, and separating release from clearance procedures. Besides, entrepreneurs should also note some of the mistakes in customs declaration.
To avoid these errors, the General Department of Vietnam Customs spent much time on guiding enterprises, simultaneously simplifying formalities and regulations. Besides, the department also implemented VNACCS/VCIS (Vietnam Automated Cargo And Port Consolidated System/Vietnam Customs Intelligence Information System) to reduce the time and paperwork.
Regarding tax incentives for enterprises operating in IPs, Duong Thu Huong, deputy head of the Hanoi Department of Taxation’s Taxpayer Support Bureau said, according to present laws, Corporate Income Tax (CIT) incentives are granted to newly-registered projects and added-capital projects which meet the criteria of the locality.
Accordingly, enterprises will be able to access tax incentives when they invest in the sectors of education, healthcare, and environmental protection, among others.
Besides, the CIT incentive policy is also applied in IZs and industrial clusters.
Huong also remarked that CIT incentives available for projects in encouraged sectors do not apply to any other income, except for income which directly relates to the incentivised activities (such as disposal of scrap) or income derived from business and production contracts in encouraged locations.
“Keeping up with the latest information on tax policies, taxable objects, tax exemptions, and incentive policies helps enterprises to ensure their own interests, which encourages investment, stepping up production and businessin Hanoi,” she added.
Deputy director of the Hanoi Promotion Agency Nguyen Ngoc Tu stated, “Hanoi is always on the side of businesses and supports them in time to study new customs and tax policies, minimising risks and confusion, thence, creating an advanced investment environment, attracting investment in IZs at the location.”
