Vietnam Can Issue Residence Card to Foreign Investors to Set up business in Phu Quoc

 The Ministry of Planning and Investment proposed a series of preferential mechanisms for Phu Quoc special economic zone.

The Ministry of Planning and Investment has just submitted to the Government a draft Law on Special Administrative Units. In this draft, the Ministry proposes a series of mechanisms to attract investment capital and foreign experts set up business in Phu Quoc, to live and work in Phu Quoc special economic zone.

Specifically, according to the draft law, Phu Quoc is prioritized investment to become a center for trade, high-end services and international procurement. This will be the only special zone to be prioritized for the development of fisheries, aquaculture and processing and fishery logistics.

Why encourage to set up business in Phu Quoc?

According to the Ministry of Planning and Investment, the potential advantages of Phu Quoc can completely develop into a commercial center, even though Phu Quoc is located far from the land and there are only two main lines of transportation that are airway and sea. Phu Quoc also has favorable conditions for hydro-meteorology, natural environment, mountains, forests, marine and ecosystems; moderate weather, favorable for year-round tourism development. Especially, Phu Quoc has a large fishing ground and potential for aquaculture.

In addition, Phu Quoc has fertile farmland, large forest land, occupies 63.2% of the total natural land area, facilitates the development of agricultural economy and sustainable eco-tourism development.

Like other two special economic zones, which are Van Don (Quang Ninh), Van Phong (Khanh Hoa), the Ministry of Planning and Investment proposed a series of incentives for Phu Quoc such as income tax exemption for 5 years, but not exceed 2030 for individuals who have taxable income arising in the special economic zone. In subsequent years, the personal income tax payable will be reduced by 50%.

For managers, scientists and highly qualified experts with income subject to personal income tax in the 3 special economic zones mentioned above, they are also entitled to tax exemption until the end of 2030 and 50% reduction of tax amount in the remaining years.

In addition to the application of general incentives for special economic zones, Phu Quoc has also been proposed to enjoy a separate mechanism, such as raising the level of allowances from 30% to 50% of the basic salary for officials and employees working here.

In particular, in order to encourage investment, the Government of special economic zone will issue permanent residence cards to individual foreign investors with investment projects of 5 million USD or above, with the residence time of 5 years or more in Phu Quoc and not violating the law.

Regarding infrastructure, according to the Ministry of Planning and Investment, infrastructure of Phu Quoc has been invested quite synchronously to meet the needs of large-scale tourism development. Many high-class and large-scale resorts have come into operation. The Politburo has agreed to open casino project in Phu Quoc for the Vietnamese.

For Van Don special economic zone, according to the Ministry of Planning and Investment, priority will be given to develop island eco-tourism, innovative industries and high-tech agriculture.

Van Phong, in particular with its location, will be promoted to develop deep-water ports, logistics services, medical services, high-quality resort…

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Positive Changes in Da Nang that Attract Foreign Investors

 The bustling city of Da Nang on the central coast of Vietnam has long been a popular destination for both international tourists and business investors alike. Over the past few years, however, the local government has made important strides towards improving the city’s infrastructure and creating an environment where investors and businesses can prosper.

This represents a new and improved investment environment for foreign investors who wish to invest in Da Nang and set up a company in Da Nang. Foreign investors who wish to do business in Da Nang would need to have legal support from lawyers in Da nang in order to make sure that all procedures are compliant with local laws and regulations.

Initiatives from Da Nang authorities to boost investment

The government of Da Nang has implemented a number of positive development policies to create better opportunities for businesses to thrive. One of the most significant developments in Da Nang in recent years has been the policies and guidance that support businesses from the initial process of setting up a company in Da Nang to obtaining work visas and work permits in Da Nang for foreign employees. The Da Nang authorities have also simplified the registration of businesses and reduce bureaucracy.

All these efforts show the government’s dedication to creating favorable investment conditions. Furthermore, Da Nang is rapidly modernizing and becoming a regional hub for digital, technology and start-up businesses. It has established a “Smart City” program with the intention of turning the city into a technological powerhouse. This digital transformation includes the introduction of advanced infrastructure, access to high-speed internet, and specialized programs for entrepreneurs and businesses.

From tax incentives to relaxed labor laws, there has been a marked increase in foreign interest in Da Nang due to these government policies. As a result, there is a great opportunity for businesses to benefit from the favorable environment that the government has created.

In order to encourage foreign suppliers to invest in Da Nang, the city’s government has implemented numerous incentives and regulations. One such measure is the plan to propose the formation of the Da Nang Free Trade Zone (FTZ).  The FTZ allows for companies to set up operations in the city without being subject to certain taxes and fees. Additionally, companies that set up operations within the FTZ are eligible for financial incentives and subsidies. This policy has been expected in encouraging foreign businesses to make investments in Da Nang, establish business in Da Nang.

In addition to tax, labor incentives, FTZ plan, the government of Da Nang has taken a number of other steps in order to make the city attractive to investors. For example, the local government has relaxed the regulations surrounding the leasing of certain industrial and commercial sites. This allows businesses to find suitable areas in which to set up their operations in Da Nang.

In order to attract even more foreign investors and businesses to Da Nang, the government has also made it easier for them to gain access to a number of services in the city. Da Nang is the first city in Vietnam that launch bicycle for rent and for the first time, a company has also launched electric bike service for transport.  Those are part of the eco-friendly initiatives which are in line with the overall strategy of sustainable development of the city.

For business owners and foreign investors looking to establish operations in Da Nang, it is important to ensure that all legal considerations are taken into account. This is why it is essential to hire lawyers in Da Nang who is experienced in the area of investment and business. Such a lawyer will be able to advise on issues surrounding company formation, lease agreements, work permits, and temporary residence cards. They will also be able to review contracts with local businesses in order to ensure that the best interests of the foreign investor are being taken into consideration.

How lawyers in Da Nang could help?

Vietnam appears to be an attractive destination for investment because of its impressive economic growth.  Da Nang, a coastal city in center of Vietnam attracts foreign investors because of its friendly and clean environment.  When considering living and investing in Da Nang, the investors would engage the legal help from experienced lawyers in Da Nang for the setting up of company in Da Nang, leasing of worksites or factories, obtaining work permits and temporary residence cards, reviewing contracts, or handling dispute and other legal matters in Da Nang.  

The law firms in Da Nang also provides advice on the current laws and regulations on investment and taxation, helping foreign investors to stay up to date with the changes in the local business environment.  They offer practical legal services and advice and assist clients in finding solutions that best meet their needs and requirements in doing business in Da Nang in particular and doing business in Vietnam as general.

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How to Apply for Investment License in Vietnam?

 The procedure to apply for investment license in Vietnam is the procedure for applying for an Investment Registration Certificate in Vietnam under the Investment Law.

Depending on the size, nature, and great impact on the environment, projects need special mechanisms and policies, projects that need land allocation, or projects that need to relocate large numbers of people, projects of foreign investors in the sea and islands that affect national defense and security, the procedures to apply for investment license in Vietnam may require approval of an investment policy.

In the framework of this article, we only refer to the procedure to apply for investment license in Vietnam, which is not subject to approval of investment policy.

What is an Investment Registration Certificate?

Investment registration certificate means a license issued by a competent State agency to organizations and individuals that fully satisfy the conditions for implementing an investment project, being foreign investors, or foreign organizations, organizations invest in projects in which foreign investors hold more than 50% of charter capital, or the majority of general partners are foreign individuals, for economic organizations that are partnerships.

The investment certificate contains information such as project name, investor’s name and address, investment project code, project location, land use area, objectives, and scale of project, project investment capital, project operation duration, investment project implementation schedule (capital and implementation of operational objectives), incentives, support and project conditions investment.

What are the forms of investment in Vietnam?

-Investment in establishing economic organizations.

-Investment to contribute capital, buy shares, or acquire capital contribution.

-Investment in the form of BCC contract.

-New investment forms and economic organizations according to the Government’s regulations.

What are the conditions for granting an investment registration certificate?

For an investment project that is not subject to approval of investment policies, an investor shall be granted an Investment Registration Certificate if it meets the following conditions:

-Investment projects that are not in industries or trades banned from business investment;

-Having a location for the implementation of the investment project;

-Investment projects in accordance with the planning;

-Satisfy the conditions on investment rate per land area and number of employees (if any);

-Meeting market access conditions for foreign investors.

What is the timeline for granting an investment registration certificate?

15 days from the date of receipt of the investor’s request for an Investment Registration Certificate, for an investment project that is not subject to a written approval of investment policies.

Steps to apply for investment license in Vietnam?

Normally, the procedure to apply for investment license for an investment project that is not subject to approval of investment policies is carried out as follows:

Step 1: The investor submits 01 application for the Investment Registration Certificate to the investment registration agency.

In case the investment project is implemented in 02 or more provincial-level administrative units, the investor shall submit a dossier to the Department of Planning and Investment of a province or centrally run city where the investor implements the project to set up an executive office to apply for the Investment Registration Certificate for the project.

Step 2: For an investment project that has already been operated, the investor submits a dossier according to regulations in which the investment project proposal is replaced by a report on the implementation of the investment project from the time of implementation.  The declaration is up to the time of application for the Investment Registration Certificate.

Step 3: The investment registration authority shall issue the Investment Registration Certificate to the investor within 15 days from the date of receipt of the valid dossier when the project meets the conditions.

What authority to issue an Investment Registration Certificate?

The authority to issue, amend and revoke the Investment Registration Certificate is as follows:

-Management Boards of industrial parks, export processing zones, hi-tech zones and economic zones shall grant, adjust and revoke investment registration certificates for investment projects in industrial parks, export processing zones and zones, hi-tech, economic zones, unless otherwise specified.

-The Department of Planning and Investment shall grant, adjust and revoke the Investment Registration Certificate for investment projects outside industrial parks, export processing zones, hi-tech zones, and economic zones, unless otherwise prescribed other.

-The investment registration agency where the investor implements the investment project, locates or is expected to set up an executive office for the implementation of the investment project, issues, adjusts and revokes the Investment Registration Certificate for the following investment projects: i) Investment projects implemented in 02 or more provincial-level administrative units; ii) Investment projects implemented inside and outside industrial parks, export processing zones, high-tech zones and economic zones; iii) Investment projects in industrial parks, export processing zones, high-tech zones, economic zones where the management board of industrial parks, export processing zones, hi-tech zones, economic zones has not been established or is not within the scope of management of the Management Board of industrial parks, export processing zones, high-tech zones and economic zones.

The agency receiving investment project dossiers is the agency competent to issue the Investment Registration Certificate, unless otherwise specified.

Why the investors need to apply for investment license in Vietnam?

The procedure to apply for investment license in Vietnam, or the procedure for granting an investment registration certificate in Vietnam, is an important procedure for foreign investors. It is therefore imperative that they understand the requirements and procedures of the application process. According to the historic data, investing in Vietnam can be beneficial for companies that want to penetrate a fast-growing market like Vietnam. Applying for an investment registration certificate is the first step that an investor must take to participate in the market.

When applying for an investment registration certificate in Vietnam, there are a number of documents and information that an investor must provide. Information such as legal documents, business plans and other financial documents must be provided for the investment registration to be approved.

Completing the application for an investment registration certificate is a complicated process and requires knowledge and experience. It is important that foreign investors seek the help of experts or legal advisors who are lawyers in Vietnam who understand the procedure and required documents while doing business in Vietnam.

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Why Investors Would Find Phu Quoc a Place for Investment?

The improvement in infrastructure system along with the preferential policies have stimulated investors to come to  set up company in Phu Quoc.

Phu Quoc, an island in Kien Giang of Vietnam is in the top of three islands having tourism potential in Southeast Asia comparable to Phuket in Thailand and Bali in Indonesia.  Phu Quoc has become a magnet for attracting huge investment flows from foreign investors in the area of real estate, entertainment, casinos, restaurant or food and beverage service business.

Phu Quoc has temperate weather throughout the year. There are also fresh and friendly forest – sea ecology and the modern transport system on the island with international airport and international hospital. Moreover, many infrastructure projects and international schools are under construction, which are necessary and favorable conditions to invite and attract investors to the Pearl Island for doing business.

Why set up company in Phu Quoc?

Capital inflows to Phu Quoc have really exploded after the “knots” in investment were removed. The new airport went into operation that can welcome larger aircraft and serve more flights, in which there are more international direct flights from China, Singapore, Russia and Cambodia. The 51km long radial route on the island has been basically completed; the road around the island and the branch roads are also being deployed. The power grid was pulled from the mainland to the island, replacing the very high cost gasoline power in the past.

The real estate and tourism consultants all agree that Phu Quoc fully convergent elements of an attractive beach for tourist with year-round sunshine, many beautiful beaches such as Long Beach, Truong Beach, Khem Beach and immense virgin forest. Moreover, Phu Quoc has a strategic location with just 1-2 hours flight to the key tourism markets in Southeast Asia.

Both investment and tourism in Phu Quoc have entered the acceleration phase. By the end of July 2015, Phu Quoc has attracted nearly 200 investment projects, including 136 projects that are being implemented in the area of over 5,100 ha with total registered capitals of 6.5 billion USD. Just one part of those projects become reality then it will make Phu Quoc to become a leading tourist destination in Vietnam, ahead of Da Nang and Nha Trang, competing with the top destinations in the area as Phuket and Bali.

Some of the largest Vietnam corporations such as Vingroup, Sun Group, CEO Group, BIM Group are implementing the huge projects that could alter the appearance of the island. In which the giant in real estate sector – Vingroup has invested projects as: Vinpearl Resort on an area of 300 ha in Long Beach, the combining of golf course and safari zoo on an area of more than 2,000 ha, and the 80 ha commercial complex.

The improvement in infrastructure system along with the preferential business and legal environments i.e. favourable land rental rates, corporate income tax, exemption of visa for foreign tourists make Phu Quoc island of Kien Giang, Vietnam a new attractive place for investment.

The actual time for processing paper at the State authority would also last longer in practice when the State authority evaluate the project plan of the investor to ensure that its investment purpose is achievable economically and in accordance to the regulations of Vietnam.  It is advised that the client engage professional law firms in Vietnam to assist with advisory and to apply investment certificate in Vietnam for doing business in Vietnam.

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