Quyết định 138/2008/QD-TTg

DECISION

ESTABLISHING, AND PROMULGATING THE REGULATION ON THE OPERATION OF, DONG DANG-LANG SON BORDER-GATE ECONOMIC ZONE, LANG SON PROVINCE

THE PRIME MINISTER

Pursuant to the December 25. 2001 Law on Organization of the Government:
Pursuant to the November 29. 2005 Investment Law;
Pursuant to the Government's Decree No. 29/200S/ND-CP of March 14. 2008. providing for industrial parks, export-processing zones and economic zones;
At the proposal of the President of the People's Committee of Lang Son province and the Minister of Planning and Investment,

DECIDES:

Article 1.-To establish Dong Dang-Lang Son border-gate economic zone. Lang Son province.

Article 2.- To issue together with this Decision the Regulation on the operation of Dong Dang-Lang Son border-gate economic zone, Lang Son province.

Article 3.- This Decision takes effect 15 days after its publication in "CONG BAO."

Article 4.- The President of the People's Committee of Lang Son province, ministers, heads of ministerial-level agencies and heads of government-attached agencies shall implement this Decision.

REGULATION

ON THE OPERATION OF DONG DANG-LANG SON BORDER-GATE ECONOMIC ZONE. LANG SON PROVINCE
(Issued together with the Prime Minister's Decision No. 138/2008/QD-TTg of October 14, 2008)

Chapter I

GENERAL PROVISIONS

Article 1.- Scope of regulation

This Regulation provides for the organization and operation of, a number of policies toward, and the state management of, Dong Dang-Lang Son border-gate economic zone: and rights and obligations of domestic and foreign organizations and individuals conducting investment and business activities in Dong Dang-Lang Son border-gate economic zone.

Article 2.- Geographical boundary of Dong Dang-Lang Son border-gate economic zone

1. Dong Dang-Lang Son border-gate economic zone is a delimited area in the national territory and under the national sovereignty, but constitutes a separate economic space with functional areas with the most favorable investment and business environment under current regulations, including socio-economic infrastructure and management policies and mechanisms favorable for business activities in conformity with the market mechanism.

2. Dong Dang-Lang Son border-gate economic zone covers an area of around 394 km2, encompassing Lang Son city: Dong Dang and Cao Loc townships. Thuy Hung. Pnu Xa, Hong Phong. Tan Lien and Song Giap communes and a pan of Binh Trung commune of Cao Loc district; Tan Thanh and Tan My communes of Van Lang district; a part of Van An commune of Chi Lang district; and Dong Giap commune of Van Quan district.

Article 3.- Development objectives of Dong Dang-Lang Son border-gate economic zone

1. To build and develop Dong Dang-Lang Son border-gate economic zone into a major driving economic zone with developed urban centers, industries, trade and services which will develop together with the northern key economic zone to form a key economic quadrangle (Lang Son -Hanoi - Hai Phong - Quang Ninh) before 2010 and play the role as an important center in the economic corridor and economic belt along the Tonkin gulf.

2. To effectively tap the advantages of an economic border-gate area, build the border-gate economic zone into a dynamic trade and service center with favorable policies and mechanisms in order to boost goods and service import and export between Vietnam and other countries and the Chinese market.

3. To create an attractive environment for domestic and foreign investment, develop production, trade and services so as to contribute to vigorously accelerating the economic restructuring in Lang Son province.

4. To enhance border security, effectively settle social problems and improve people's material and spiritual life.

5. To enhance Vietnam-China cooperation in economics, trade and services and contribute to promoting the development of Nanning - Lang Son - Hanoi - Hai Phong economic corridor.

Article 4.- Encouragement and protection policies

The Government of the Socialist Republic of Vietnam encourages and protects domestic and foreign organizations and individuals that invest or do business in Dong Dang-Lang Son border-gate economic zone in the sectors of import, export, temporary import for re-export; goods transit; bonded warehouses; duty-free shops; trade fairs and exhibitions; product introduction; production and processing of imported and exported goods; border-gate marketplaces, investment in socio-economic infrastructure facilities and dwelling houses; tourism; financial and banking services and other business activities in accordance with Vietnam's laws and treaties to which Vietnam is a contracting party.

Article 5.- Rights of organizations and individuals investing or doing business in Dong Dang-Lang Son border-gate economic zone

Apart from entitlements provided for by Vietnam's laws and treaties to which Vietnam is a contracting party, enterprises investing or doing business in Dong Dana-Lana Son border-gate economic zone also have the following rights:

1. To enjoy incentives provided for in the Government's Decree No. 29/2008/ND-CP of March 14. 2008. on industrial parks, exportprocessing zones and economic zones, and incentives provided for in this Regulation.

2. To use infrastructure, public facilities and common services in Dong Dang-Lang Son border-gate economic zone such as roads, technical infrasfructure system, lighting electricity, electricity and water supply and communication and information at charges agreed upon with infrastructure enterprises.

3. To transfer land use rights and assets attached to land within the land-lease or -sublease duration in accordance with the land law and land use purposes of licensed investment projects. In case of any change in the projects* original investment purposes, the transfer of land use rights and assets attached to land may only be effected after it is approved by competent authorities.

4. To mortgage the land use right value and assets attached to land within the land-lease or -sublease duration at Vietnamese or international credit institutions operating in Vietnam in accordance with Vietnam's current laws.

Article 6.- Capital sources for development of Dong Dang-Lang Son border-gate economic zone

1. Annually, based on the State Budget Law, the balancing capacity of the state budget and investment projects on important socio-economic infrastructure facilities approved by competent state agencies, the Ministry of Planning and Investment shall assume the prime responsibility for. and coordinate with the Ministry of Finance and relevant agencies in. allocate capital from the source of suite capital, targeted supports from the centrai state budget and preferential credit capita; for Lang Son province to implement investment projects on important socio-economic infrastructure facilities in Dong Dang-Lang Son border-gate economic zone.

2. The State's development investment credit capital.

3. Capital of domestic enterprises and people through direct investment projects, issuance of project bonds, advance capital of potential users of infrastructure facilities and capital in the form of co-financing credit.

4. Investment capital attracted in the forms of build-operate-transfer (BOT), build-transfer (BT), build-transfer-operate (BTO) and others in accordance with law.

5. Capital mobilized from the land fund in accordance with the land law for investment in the development of common socio-economic infrastructure facilities in Dong Dang-Lang Son border-gate economic zone.

6. To prioritize the use of ODA capital for investment in the construction of socio-economic infrastructure and necessary public service facilities in Dong Dang-Lang Son border-gate economic.

Chapter II

ORGANIZATION AND OPERATION OF DONG DANG-LANG SON BORDER-GATE ECONOMIC ZONE

Article 7.- Functional areas in Dong Dang-Lang Son border-gate economic zone

Dong Dang-Lang Son border-gate economic zone has two main functional areas: the non-tariff area and the tariff area.

1. The non-tariff area (excluding Dong Dang township) is divided into several functional sub- areas, including a trade, service and border trade center (reserved for goods trading; commercial provision of services; investment promotion; trade promotion; free trade; finance, banking, insurance, post and telecommunications, immigration services, investment consultancy, technology, recreation and entertainment, etc.), a center for import and export processing and re-processing (reserved for import and export production, processing and re- processing); and a goods entrepot (reserved for transportation, warehousing services, bonded warehouses, goods examination and customs clearance procedures). The operation of and incentive policies for the non-tariff area are specified in Articles 12 thru 14, Chapter II of this Regulation.

Functional sub-areas in the non-tariff area will be separated from other functional areas of the border-gate economic zone by hard fences with entrance gates and doors so as to ensure the control by relevant functional agencies. The non-tariff area will have no permanent or temporary residents (including foreigners); employees of enterprises operating in the non-tariff area who wish to work overnight in the non-tariff area shall make registration with the Management Board of Dong Dang-Lang Son border-gate economic zone.

2. The tariff area includes the following functional sub-areas: an international border-gate, an industrial park, a tourist resort, an urban center, an administrative center and residential quarters.

3. The location and land area of each functional sub-area are identified in the planning on functional sub-areas, the general planning on construction of Dong Dang-Lang Son border-gate economic zone and the detailed planning on the construction of functional sub-areas in the economic zone.

Article 8.- Immigration and residence in Dong Dang-Lang Son border-gate economic zone

1. Chinese citizens who reside in districts or towns bordering on Lang Son province may enter and exit Dong Dang-Lang Son border-gate economic zone with their border identity cards or border laissez-passers granted by competent Chinese authorities, and are allowed to sojourn in Dong Dang-Lang Son border-gate economic zone for no more than 15 days. If they wish to travel to other places in Lang Son province outside the economic zone, they are required to obtain a travel permit issued by the provincial Police Department's immigration management office. A travel permit is only valid for single travel for no more than 7 days and will not be extended.

2. Foreign passport holders who are not entitled to visa exemption (citizens of China or a third country) will be exempt from visa and may sojourn in Dong Dang-Lang Son border-gate economic zone for no more than 15 days. If they wish to travel to other places in Vietnam outside the economic zone, the immigration management office shall consider and grant visas to them at the economic zone.

3. Foreigners and overseas Vietnamese who work, invest or do business in Dong Dang-Lang Son border-gate economic zone and their family members will be granted multiple visas suitable to their working periods in the economic zone; they may reside or temporarily reside for a given period of time in Dong Dang-Lang Son border-gate economic zone and Vietnam.

4.Vietnamese citizens who work and reside in cities, townships and communes specified in Clause 2, Article 2 of this Regulation may travel to China with their border laissez-passers .granted by competent Vietnamese authorities.

5.Vietnamese citizens are free to enter and exit Dong Dang-Lang Son border-gate economic zone. In case they go abroad through Dong Dang-Lang Son border-gate economic zone, they shall strictly observe current immigration regulations.

The Ministry of Public Security and the Border Guard High Command shall guide the Police Department and the Border Guard Headquarter of Lang Son province in managing the immigration, sojourn and temporary residence in Dong Dang-Lang Son border-gate economic zone.

Article 9.- Management of road motor vehicles at Dong Dang-Lang Son border-gate economic zone

1. Road motor vehicles with international transport permits are allowed to enter and exit Dong Dang-Lang Son border-gate economic zone for cargo and passenger transportation between Dong Dang-Lang Son border-gate economic zone and China. When these vehicles travel into inland Vietnam, they must bear a distinct sign and observe Vietnam's laws and international agreements to which Vietnam has signed or acceded.

2. For Chinese road vehicles entering or leaving Dong Dang-Lang Son border-gate economic zone without international transport permits, procedures for temporary import for re-export shall be carried out and temporary vehicle registration shall be made; in case of entry and exit on the same day, only certification of the border-gate customs office is required and these vehicles must park at designated places under the management of relevant functional agencies.

3. When China vehicles which are permitted to enter and exit Dong Dang-Lang Son border-gate economic zone wish to travel out of Dong Dang-Lang Son border-gate economic zone, they will be subject to the management of competent police offices as foreign vehicles transiting Vietnam.

Article 10.- Investment incentives

Investment projects in Dong Dang-Lang Son border-gate economic zone are entitled to the maximum incentives applicable to geographical areas meeting with extreme socio-economic difficulties prescribed in the Investment Law, the Law on Corporate Income Tax, the Law on Value-Added Tax and other incentives under treaties to which Vietnam is a contracting party. In case legal documents provide for different incentive levels for a single case, the highest incentive level will be applied.

Article 11.- Financial and credit policies toward Dong Dang-Lang Son border-gate economic zone

1. Enterprises of all economic sectors that conduct investment, production or business activities in Dong Dang-Lang Son border-gate economic zone may be considered for provision of state credit loans by the Vietnam Development Bank in accordance with the Government's regulations on the State's development investment credit.

2. Business organizations and enterprises operating in Dong Dang-Lang Son border-gate economic zone. that, after making finalization with tax offices, suffer losses, may cany forward such losses to subsequent years and deduct these loss amounts from their taxable incomes. The loss-carrying duration must not exceed 5 years.

3. People working in Dong Dang-Lang Son border-gate economic zone who are personal income taxpayers under law are entitled to a 50% reduction of the payable tax amounts.

4. Raw materials and supplies imported into Dong Dang-Lang Son border-gate economic zone (except the non-tariff area) for export production are subject to import tax but paid tax amounts will be refunded upon exportation of products in accordance with law.

5. Domestic and foreign organizations and individuals doing business in Dong Dang-Lang Son border-gate economic zone shall comply with financial and accounting regulations and make financial statements in accordance with Vietnam's current law.

6. Payment for goods and service sale/ purchase and exchange in Dong Dang-Lang Son border-gate economic zone shall be made in Vietnam dong or Chinese yuan in accordance with regulations of the State Bank of Vietnam. Only entities entitled to collect foreign currencies specified by the State Bank of Vietnam may receive payment in a freely convertible currency.

Article 12.- Major business types in the non-tariff area

1. Production, processing, re-processing, assembly .and packaging of exported goods, imported goods and goods for local consumption.

2. Trade in goods (including import, export, transfer out of border-gate, temporary import for re-export, border-gate marketplaces, shops and supermarkets).

3. Trade in services (sorting, packaging, transportation, preservation, warehousing, bonded warehouses, post and telecommunications, finance, banking, transport, insurance, recreation and entertainment, restaurants, hotels, healthcare).

4. Trade promotion (trade fairs and exhibitions, showrooms, branches and representative offices of domestic and foreign companies and other commercial activities).

Article 13.- Goods and service exchange relations of the non-tariff area

1. The exchange of goods and services between the non-tariff area and other functional sub-areas in Dong Dang-Lang Son border-gate economic zone is considered goods import and export relations and must comply wich Vietnam's laws on import and export, and customs procedures must be carried out according to Vietnam's customs law. Goods and service exchange between the non-tariff area and foreign countries are considered exchange among foreign countries.

2. Economic organizations operating in the non-tariff area may export to and import from foreign countries all goods and services which-are not banned under Vietnam's law.

Economic organizations and individuals in the border-gate economic zone and inland Vietnam may only import from the non-tariff area goods and services which are not banned from import and export into the non-tariff area goods and services which are not banned from export.

The import and export of goods on the list of those subject to conditional import or export and goods restricted from trading must comply with Vietnam's current law.

3. The processing, temporary import for re-export and transfer out of border-gate of goods in the non-tariff area comply with current regulations of each country in conformity with relevant agreements signed between the Vietnamese Government and the Chinese Government.

4. The transport of goods between Vietnam and China through the non-tariff zone must comply with current regulations of each country and relevant agreements signed between the Vietnamese Government and Chinese Government.

5. The non-tariff zone has a customs office to conduct the inspection and supervision of imported ana exported goods as -veil as persons and vehicles in accordance with current laws.

Article 14.- Incentive policies for the non-tariff area

1. Investment projects of domestic and foreign organizations and individuals in the non-tariff area are entitled to a corporate income tax rate of 10% for 15 years after their commencement, enjoy tax exemption for at most 4 years after taxable incomes are generated and a 50% reduction of payable tax amounts for subsequent 9 years.

2. Goods and services processed, assembled or re-processed by enterprises in the non-tariff area for consumption within the area and goods and services imported from foreign countries into the non-tariff area are not liable to value-added tax

3. Excise tax-liable goods and services which are processed, assembled or re-processed by enterprises in the non-tariff area for consumption therein; excise tax-liable goods and services which are imported from foreign countries or inland Vietnam into the non-tariff area are not subject to license tax. Particularly for under-24-seat cars exported from inland Vietnam into the non-tariff area or imported from foreign countries into the non-tariff area, excise tax must be paid in accordance with current legal provisions.

4. Goods brought from foreign countries or inland Vietnam into functional sub-areas of the non-tariff area are not subject to import tax and export tax. For goods brought from foreign countries into the non-tariff area for import into Vietnam and goods brought from inland Vietnam into the non-tariff area for export to foreign countries, import tax or export tax must be paid in accordance with current provisions of law.

5. Goods processed, re-processed or assembled in the non-tariff area, when being exported to foreign countries, are exempt from export tax. Goods processed, recycled or assembled in the non-tariff area without the use of imported raw materials and components, when being imported into inland Vietnam, import tax is not required to be paid. If imported raw materials and components are used, when such goods are imported into inland Vietnam, import tax shall be paid only for the part of imported raw materials and components constituting such goods. Import and export procedures must be carried out and goods are subject to customs inspection and supervision.

6. Domestic and foreign tourists, when entering the non-tariff area, may purchase and bring into inland Vietnam imported goods (goods not banned from import) which are exempt from import tax, value-added tax and excise tax (if any) and valued at more than VND 500.000/person/day. If the goods value exceeds VND 500.000, tax shall be paid for the excessive amounts under current regulations applicable to other ordinary imported goods.

Chapter III

STATE MANAGEMENT OF DONG DANG-LANG SON BORDER-GATE ECONOMIC ZONE

Article 15.- Organization of the Management Board of Dong Dang-Lang Son border-gate economic zone

1. The Management Board of Dong Dang-Lang Son border-gate economic zone is a state management agency attached to the People's Committee of Lang Son province, performs the direct state management of Dong Dang-Lang Son border-gate economic zone under the Government's Decree No. 29/2008/ND-CP of March 14, 2008, providing for industrial parks, export-processing zones and economic zones and relevant laws; manages and organizes the provision of public administrative services and other support services related to investment, production and business activities of investors in Dong Dang-Lang Son border-gate economic zone.

2. The Management Board of Dong Dang-Lang Son border-gate economic zone is set up under the Prime Minister's decision; is subject to the direction and management by the People's Committee of Lang Son province of its organization, payroll, working programs and operation funds and the professional direction, guidance and examination by line ministries and branches; and shall closely coordinate with functional agencies under the People's Committee of Lang Son province in managing Dong Dang-Lang Son border-gate economic zone.

3. The Management Board of Dong Dang-Lang Son border-gate economic zone has the legal person status, accounts and a seal bearing the national emblem; has a headquarter and a full-time staff. Its fund for state administrative management, fund for non-business activities and development investment capital shall be allocated from the state budget according to annual plans.

4. Tasks powers and organizational structure of the Management Board of Dong Dang-Lang Son border-gate economic zone will be specified in its establishment decision issued by the Prime Minister.

Article 16.- Responsibilities of the People's Committee of Lang Son province

1. To adjust and supplement or submit to competent authorities adjustments and supplements to the master plan on socio-economic development, land use planning and land use plan of Lang Son province in conformity with the development objectives of Dong Dang-Lang Son border-gate economic zone. To formulate the land use planning of Dong Dang-Lang Son border-gate economic zone in accordance with the land law.

2. To formulate and submit to the Prime Minister for approval the development planning and general construction planning of Dong Dang-Lang Son border-gate economic zone; and direct the formulation and approval of the detailed planning on the construction of functional sub-areas of Dong Dang-Lang Son border-gate economic zone.

3. To perform the state management of investment projects in Dong Dang-Lang Son border-gate economic zone according to approved plannings; to submit for approval or approve according to its competence a list of development investment projects and annual and five-year investment development capital plans of Dong Dang-Lang Son border-gate economic zone.

4.To promulgate specific incentive policies in conformity with current regulations which prioritize the recruitment and use of local laborers, the provision of job-training to locai laborers and the attraction of professional and skilled laborers from other places to Dong Dang-Lang Son border-gate economic zone.

5. To allocate administrative and non-business funds and development investment capital to the Management Board of Dong Dang-Lang Son border-gate economic zone from its budget according to annual plans;

6. To direct the Management Board of Dong Dang-Lang Son border-gate economic zone to perform tasks specified in this Regulation and its establishment decision and implement policies on resettlement, social affairs and employment so as to ensure people's livelihood as well as the living conditions of and jobs for laborers in Dong Dang-Lang Son-border-gate economic zone.

7. To direct relevant district-level People's Committees and functional agencies of the province to carry out measures to ensure security, social order and safety, create favorable conditions for the operation of enterprises, perform compensation and ground clearance work and effectively-combat smuggling, trade frauds and other illegal acts in the province related to the operation of Dong Dang-Lang Son border-gate economic zone.

8. To reach written agreement with the administration of the Zhuang Autonomous Region, Guangxi, China, on principles for coordinated management and administration of the operation of Dong Dang-Lang Son border-gate economic zone on the basis of current laws of each country and in line with the development of the cooperative relations among regional countries.

Article 17.- Responsibilities of ministries and agencies for state management in Dong Dang-Lang Son border-gate economic zone

Relevant ministries, branches and agencies shall, pursuant to their functions, tasks and powers, coordinate with the People's Committee of Lang Son province in guiding the Management Board of Dong Dang-Lang Son border-gate economic zone to perform its functions and tasks regarding economic development, investment, construction, planning, natural resources and environment management, urban management and development, labor management, import and export and some other domains as prescribed in the Government's Decree No. 29/2008/ND-CP of March 14, 2008, providing for industrial parks, export-processing zones and economic zones in accordance with relevant provisions of law and this Regulation.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 18.- Other matters related to activities of organizations and individuals in Dong Dang-Lang Son border-gate economic zone not provided for in this Regulation must comply with relevant provisions of the Commercial Law. the Investment Law, the Enterprise Law, the Land Law, the Construction Law and the Government's Decree No. 29/2008/ND-CP of March 14.2008, providing for industrial parks, export-processing zones and economic zones, other legal documents, and treaties to which Vietnam is a contracting party.

Article 19.- Incentive mechanisms and policies specified in this Regulation may apply to domestic and foreign organizations and individuals that have conducted investment or business activities in the geographical area of Dong Dang-Lang Son border-gate economic zone for their remaining operation duration.