Quyết định 79/2008/QD-TTg

DECISION

ESTABLISHING AND PROMULGATING THE REGULATION ON OPERATION OF, HON LA ECONOMIC ZONE, QUANG BINH PROVINCE

THE PRIME MINISTER

Pursuant to the December 25. 2001 Law on Organization of the Government:
Pursuant to the November 29, 2005 Investment Law;
At the proposal of the president of the People's Committee of Quang Binh province and the Minister of Planning and Investment.

DECIDES:

Article 1.-To establish Hon La economic zone in Quang Binh province.

Article 2.- To promulgate together with this Decision the Regulation on operation of Hon La economic zone, Quang Binh province.

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

The president of the People"s Committee of Quang Binh province, heads of ministerial-level agencies and heads of government-attached agencies shall implement this Decision.

REGULATION

ON OPERATION OF HON LA ECONOMIC ZONE. QUANG BINH PROVINCE

(Promulgated together with the Prime Minister's Decision No. 79/2008/QD-TTg of June 10. 2008)

Chapter I

GENERAL PROVISIONS

Article 1.- This Regulation provides for organization and operation, a number of policies for, and the state management of Hon La economic zone, Quang Binh province; rights and duties of investors that invest and trade in goods and services or in infrastructure in Hon La economic zone.

Article 2.-

1. Hon La economic zone is an area with delimited geographical boundaries under national territory and sovereignty but with separate economic-space, favorable and equal investment and business environment, consisting of functional zones, socio-technical infrastructures, service and public facilities, with long-term and stable preferential and incentive policies as well as open management mechanisms to create favorable conditions for investors and make them feel secure when investing in the development of goods and service production and trade under the current and increasingly improved legal framework.

2. Hon La economic zone encompasses 6 coastal communes of Quang Trach district, namely Quang Dong. Quang Phu. Quang Tung. Canh Duong. Quang Hung and Quang Xuan. of which Quang Dong and Quang Phu communes constitute the core of the zone. The zone has a natural land area of around 10.000 ha. including about S.900 ha of the mainland and 1.100 ha of islands, bordering on: Ha Tinh. to the north: Quang Tho commune of Quang Trach district. to the south: Quang Kim. Quang Tien and Quang Chau communes of Quang Trach district, to the west: and the East Sea, to the east.

Article 3.- Major development objectives of Hon La economic zone

1. To exploit to the utmost advantages in natural conditions, geographical and political positions for international and domestic trade and services, thus boosting socio-economic development in Quang Binh province, the northern and the whole Central region, contributing to narrowing the gap between this region and other regions in the country.

2. To build and develop Hon La economic zone into a complex economic zone with such key industries as auxiliary industry, electricity, seagoing ship- and fishing ship-building, cement industry, glass production and other supportive industries; to develop Hon La seaport services and Vung Chua-Dao Yen tourist route, urban centers and some other economic activities.

3. To build and trade in the non-tariff zone, associated with investment in and effective exploitation of Hon La port so that it may. together with national highways 1A and 12 A as well as Cha Lo, Cau Treo and Lao Bao border gates, create an important gateway to the east sea of Southern Laos. Northeastern Thailand and the Mekong River Sub-region.

4. To generate jobs, boost training and raise the quality of human resources, increase laborers' income.

5. Objectives of the next five years: To continue investment in building Hon La seaport: build infrastructure and attract investment in Hon La seaport industrial park with a high occupancy' coefficient. To formulate a number of basic items under the planning on the Vung Chua-Dao Yen tourist resort. To develop residential areas, step by step establish new modern and civilized urban centers suitable to a powerful economic zone. To complete the construction of inter-regional and intra-regional artery roads and functional zones according to the approved detailed plannings. attracting domestic and foreign investment projects for development of key areas (Quang Dong. Quang Phu) of Hon La economic zone, and initially exploit the seaport, the non-tariff zone, industrial parks and tourist resorts...

In subsequent periods, to develop in the direction from Quang Dong to Quang Xuan with appropriate steps. To step by step restructure the economy and prepare preconditions for development according to planning of four communes of Canh Duong, Quang Tung, Quang Hung and Quang Xuan. To continue building and investing in the development of infrastructure in Hon La economic zone. To implement the approved detailed planning and continue investment in infrastructure construction and production and business in industrial parks, tourist resorts, recreation centers and the non-tariff zone.

Article-4.- The Government encourages and protects Vietnamese organizations and individuals of all economic sectors, overseas Vietnamese and foreign investors participating in investment, production and business in Hon La economic zone in infrastructure investment and business, industrial development urban development, seaport, airport, commerce, services, tourism, recreation and entertainment, finance and banking, transport, insurance, education, training, culture, physical training and sports, science and technology, health, housing, import and export, and other production and business activities in accordance with Vietnamese law and treaties to which Vietnam is a contracting party.

Article 5.- Rights and duties of investors in Hon La economic zone comply with the provisions of Articles 11 thru 21 of the Governments Decree No. 108/2006/ND-CP of September 22. 2006, detailing and guiding the implementation of the Investment Law.

Article 6.-

Investors (except those defined at Point d. Clause 4, Article 3 of the Investment Law) that invest in building and trading in all or a number of infrastructure items in functional zones, technical infrastructure, service and public facilities in Hon La economic zone (collectively referred to as infrastructure construction and business investment enterprises) have the following rights:

a/ To be leased or re-allocated land by the Hon La Economic Zone Management Board with the payment of land use levies according to relevant provisions of the land law for investment in infrastructure construction and business in functional zones, investment in technical infrastructure systems, service and public facilities in Hon La economic zone;

b/ To transfer the right to use or sub-lease land with already built technical infrastructure in Hon La economic zone to other investors for investment in the production and trading of goods and services in Hon La economic zone in accordance with the relevant provisions of the land law;

c/ To collect use levies on infrastructure in functional zones, technical infrastructures, service and public facilities in Hon La economic zone which are invested in by infrastructure construction and business investment enterprises under contracts signed with the lessees:

d/ To build workshops and warehouses in Hon La economic zone for sale or lease according to planning;

e/ To set lease ana sub-lease prices of land with already built technical infrastructures, use levies on technical infrastructures, public service facilities in Hon La economic zone according to current legal provisions and agreements of the Hon La Economic Zone Management Board; to set lease and sale prices for workshops, warehouses, and service charges;

f/ To allow other investors (except those defined at Point d. Clause 4, Article 3 of the Investment Law) that have financial capability and experience in calling for investment to rent or re-rent a part or the whole of land area that cannot be leased so that the latter may sub-lease that land and call for investment in accordance with the land law;

g/ To enjoy investment incentives and other lawful interests according to this Regulation and legal provisions on land, investment, tax, as well as relevant laws and treaties to which Vietnam is a contracting party.

Infrastructure construction and business investment enterprises in Hon La economic zone have the following duties:

a/To build infrastructure in functional zones, technical infrastructure, service and public facilities in Hon La economic zone strictly according to the detailed plannings. designs and schedules approved by competent state agencies.

In cases defined in Decree No. 108/2006/ND-CP of September 22,2006. detailing and guiding the implementation of the Investment Law, the Hon La Economic Zone Management Board shall decide to terminate the operation of projects of investment in infrastructure construction and business in functional zones, projects on technical infrastructure, service and public facilities in Hon La economic zone: and. at the same time, propose competent agencies to recover land already allocated to projects in accordance with the land

b/ To maintain and improve infrastructure in functional zones, technical infrastructures, service and public facilities in Hon La economic zone so as to ensure their quality;

c/ To observe this Regulation; detailed plannings on functional zones already approved by competent agencies; and use land for proper allocation or lease purposes;

d/ To perform tax and customs and other obligations in accordance with law;

e/To make and submit monthly, quarterly and annual reports to the Hon La Economic Zone Management Board.

Article 7.-

1. Annually, based on socio-economic infrastructure investment projects approved by competent authorities and project execution schedules, the central budget shall make additional allocations to Quang Binh province's budget for investment in the construction of socio-economic infrastructure, service and public facilities of Hon La economic zone in accordance with the state budget law.

2. To allow the application of the following modes of capital raising for investment in and development of Hon La economic zone:

a/To prioritize ODA sources and preferential credits for investment in the construction of socio-economic technical infrastructure, service and public facilities of Hon La economic zone, and other technical auxiliary works:

b/ To attract investment capital in BOT, BT, BTO and other forms undercurrent regulations:

c/To raise capital from the land fund according to the land law for investment in the development of socio-economic infrastructure in Hon La economic zone;

d/ To raise direct investment capital from domestic and foreign organizations and individuals: advanced capital of those that need to use infrastructure and capital of enterprises functioned to build and deal in technical infrastructure. To expand co-financing credits of credit institutions and mobilize every capital source in other forms in accordance with law.

e/ To issue local bonds for raising investment capital for large-scale infrastructure construction investment projects which are essential to development of Hon La economic zone in accordance with law.

Chapter II

ORGANIZATION AND OPERATION OF HON LA ECONOMIC ZONE

Article 8.-

1. Hon La economic zone includes has functional zones: the non-tariff zone and the tariff zone.

The non-tariff zone in Hon La economic zone is an area identified in the socio-economic development master plan and the construction overall planning. The non-tariff zone is separated from the tariff zone in the Hon La economic zone and inland Vietnam with a system of fences that have entrances under the control of related functional agencies. The non-tariff zone has customs agencies to check, monitor and carry out customs procedures for goods in and out of the zone. It has no population quarters, permanent or temporary residents (even foreigners).

The tariff zone covers the remaining area of the economic zone. It has such functional zones as industrial parks and port logistic service areas. population, uroan, tourist, service and administrative quarters.

The size and position of each functional zone is identified in the overall planning on construction of Hon La economic zone approved by the Prime Minister.

2. The Hon La Economic Zone Management Board may hire foreign consultancy companies formulate detailed plannings on such functional zones as urban quarters, the non-tariff zone, tourist resorts and other functional zones in line with the master plan.

Article 9.- Operation of the non-tariff zone covers the following major form's of production and business:

1. Transit, receipt, transshipment and transportation of goods abroad and vice versa.

2. Production, processing, recycling, assembly of imports, exports and goods for local supply.

3. Trade in goods, including import, export, cross-border transportation, temporary import for re-export, distribution, retail shops and supermarkets, duty-free shops and supermarkets.

4. Trade in services, including classification, packaging, transportation and delivery of transit goods, preservation, warehousing, bonded warehouses, post and telecommunications, finance and banking, transportation, insurance, recreation, entertainment, and restaurants.

5. Trade promotion, including trade fairs and exhibitions, showrooms, branches and representative offices of domestic and foreign companies, financial institutions, banks and other trade activities.

Article 10.-

1. The relation of exchange of goods and services between the non-tariff zone and foreign

countries and among economic organizations within the non-tariff zone must comply with regulations on exchange relations between foreign countries. Economic organizations operating in the non-tariff zone may export to and import from foreign countries all goods and services not banned from import and export by Vietnamese law. Goods imported from overseas into the non-tariff zone or exported from the non-tariff zone to foreign countries are not liable to import and export duties (except those defined in Clause 2. Article 15 of this Regulation).

2. Goods may be kept in the non-tariff zone for unrestricted time.

3. Foreign ships may enter the non-tariff port area to receive and deliver goods without going through entry and exit procedures for their crews, but must go through entry and exit procedures for ships at buoy zero.

Article 11.-

1. Goods in and out of the tariff zone in Hon La economic zone must comply with legal provisions on customs, import and export duties: and may enjoy the most convenient customs procedures.

2. Goods may freely circulate between the tariff zone and inland Vietnam.

Article 12.-

1. The relation of exchange of goods and services between the non-tariff zone and the tariff zone (except processing zones) in Hon La economic zone and inland Vietnam must comply with regulations on exchange relations between foreign countries and Vietnam as well as current legal provisions on the customs, import and export duties. The relation of exchange of goods and services between the non-tariff zone and processing zones in Hon La economic zone must comply with the regulations on exchange relations between foreign countries.

2. Investors that invest in the production or trading of goods and services in the tariff zone in Hon La economic zone and inland Vietnam may only import from the non-tariff zone goods and services which are not banned or restricted from import by Vietnam and may sell to the non-tariff zone goods and services which are not banned from export by Vietnam.

Article 13.-

Foreign investors may invest in the commercial provision of international telecommunications services exclusively for Hon La economic zone and decide on charge rates by themselves in line with Vietnam's committed international integration roadmap.

Chapter III

INVESTMENT INCENTIVES

Article 14.-

1.Investors may choose to implement investment projects in Hon La economic zone (except projects on the list of domains prohibited from investment under the investment law).

2. Domestic and foreign investment projects in Hon La economic zone may follow the quick and convenient investment registration and verification process in order to be granted investment certificates.

3. Investment projects in Hon La economic zone, including expanded ones, are entitled to incentive policies applicable to geographical areas on the list of those meeting with exceptional socio-economic difficulties and other incentive policies provided for in the Government's Decree No. 29/2008/ND-CP of March 14. 2008. on industrial parks, export processing zones and economic zones.

4. Investors are entitled to import duty exemption for five years from the date of starting production of raw materials, supplies, components or semi-finished products which cannot yet be produced in the country and may be imported for production in Hon La economic zone.

5. Vietnamese and foreigners working in Hon La economic zone are entitled to a 50% reduction of income tax on their taxable incomes.

6. In addition to incentives provided for in this Regulation, the following investment projects of investors in Hon La economic zone are entitled to the enterprise income tax rate of 10% throughout their execution periods:

a/ Hi-tech projects which meet the requirements in Clause 2. Article 5 of the Regulation on Hi-tech Parks, issued together with the Government's Decree No. 99/2003/ND-CP of August 28,2003;

b/ Projects on the list of domains entitled to special investment preferences which may exert big socio-economic effects, which will be submitted by the Finance Ministry to the Prime Minister when higher incentives are needed.

Article 15.-

1. In the following cases imports and exports are not subject to import and export taxes:

a/ Goods imported from foreign countries or other non-tariff zones into the non-tariff zone of Hon La economic zone:

b/ Goods exported from the non-tariff zone to foreign countries;

c/ Goods transferred or sold from the non-tariff zone to other non-tariff zones or export-processing enterprises in the Vietnamese territory:

d/ Goods not liable to Import tax which originate from inland Vietnam and are brought into the non-tariff zone (except those defined in Clause

2 of this Article).

2. Goods subject to export tax and originating from the tariff zone in Ken La economic zone and inland Vietnam which are brought into the tariff zone for export to foreign countries and do not go through production, processing, recycling or assembly into products at the non-tariff zone are liable to export duty, go through export procedures under current regulations, and subject to customs inspection and supervision.

3. Goods of foreign origin and not on the list of goods banned from import or restricted from import which are imported from the non-tariff zone into the tariff zone (except export processing zones) in Hon La economic zone and inland Vietnam are subject to import duty and import procedures according to current regulations as well as to customs inspection and supervision.

4. Goods produced, processed, recycled or assembled in the non-tariff zone with the use of imported raw materials or components, when imported into the tariff zone (except export processing zones) in Hon La economic zone and inland Vietnam are only be subject to import duty on imported raw materials and components being their constituents and to import procedures according to current regulations, and to customs inspection and supervision.

5. Goods and services produced or consumed in the non-tariff zone and those imported from foreign countries into the tariff zone are not liable to value added tax (VAT). Goods and services brought from inland Vietnam and the tariff zone of Hon La economic zone into the non-tariff zone are entitled to the VAT rate of 0% Goods and services brought from the non-tariff zone into inland Vietnam and the tariff zone except export processing zones) in Hon La economic zone are subject to VAT under current regulations. Goods and sen ices subject to excise tax which are produced and consumed in the non-tariff zone or imported from overseas into the non-tariff zone are not liable to excise tax (except those subject to excise tax under separate regulations of the excise tax law).

6. Goods and services subject to excise tax which are brought from the non-tariff zone into the tariff zone in Hon La economic zone and inland Vietnam are liable to excise tax.

7. Production materials and supplies imported from oyerseas by domestic or foreign organizations and individuals that produce or trade in goods or services in the non-tariff zone which are not fully used and by-products of commercial value may be sold into the tariff zone (except export processing zones) in Hon La economic zone and inland Vietnam after customs clearance and import duty payment according to current regulations.

8. Investment projects to produce goods for export and transport goods in transit must comply with general regulations.

Article 16.- Investors (except those defined at Point d. Clause 4. Article 3 of the Investment Law) may invest in building houses for sale or lease or invest in infrastructure construction in functional zones for lease, sub-lease, or transfer the right to use land with already built infrastructures in Hon La economic zone according to relevant provisions of the land law Overseas Vietnamese may buy houses associated with land use rights in Hon La economic zone: foreigners residing in Vietnam and foreign investors may rent houses associated with land use rights in the economic zone according to the housing law and the land law.

Article 17.-The single price policy is applicable to goods. services of and land rents paid by organizations and individuals, v. nether they are domestic or foreign ones, provided that they are involved in production and business in Hon La economic zone.

Chapter IV

USE OF LAND IN HON LA ECONOMIC ZONE

Article 18.-

1. The whole land and water surface area used exclusively for investment in the construction and development of industrial parks, export processing zones and the non-tariff zone in Hon La economic zone which are included in the overall planning on construction of Hon La economic zone approved by the Prime Minister and detailed plannings on construction of functional zones in Hon La economic zone approved by the Quang Binh provincial People's Committee shall be allocated once by the Quang Binh provincial People's Committee to the Hon La Economic Zone Management Board for organization of construction and development. The Quang Binh provincial People's Committee shall direct the recovery of land and water surface areas planned for construction of functional zones in the economic zone.

2. The Quang Binh provincial People's Committee shall direct the recovery of land and water surface areas under the detailed land use plan already approved with regard to the areas used for other functional zones and other purposes in Hon La economic zone so as to allocate those areas to the Hon La Economic Zone Management Board according to the approved detailed land use plannings for construction and development of the economic zone.

3. The Quang Binh provincial People's Committee shall direct the People's Committee of Quang Trach district to coordinate with the Hon La Economic Zone Management Board in conducting compensation and ground clearance with regard to land and water surface areas already recovered by competent state agencies for allocation to the Hon La Economic Zone Management Board which shall re-allocate or sub-lease those areas to persons having the land use demand and for resettlement by households that have recovered land in accordance with the land law.

The Hon La Economic Zone Management Board shall manage and use effectively the allocated special-use land and water surface fund for proper purposes and in line with the overall planning on the construction of Hon La economic zone which has been approved by the Prime Minister and the detailed construction planning;, detailed land use plannings and land use plans already approved by the Quang Binh provincial People's Committee.

4. For cases of re-allocation and lease of land without auction of land use rights or bidding for projects involving land use:

Based on land prices and levels of reduction or exemption of land use levies and land rents set by the Quang Binh provincial People's Committee as well as the investment law and the land law, the Hon La Economic Zone Management Board shall decide on the level of collection, reduction or exemption of special-use land and water surface use levies and land rents for each investment project so as to ensure investment promotion.

5. For cases of re-allocation of land with the collection of land use levies and lease of land in the form of auction of land use rights or bidding for projects involving land use: Based on the financial plans and land prices already approved by the Quang Binh provincial People's Committee, the Hon La Economic Zone Management Board shall decide to re-allocate and lease land or water surface areas that have been compensated or cleared to persons with land use demand in accordance with the land law.

6. Investors being domestic organizations and individuals and overseas Vietnamese will be allocated or leased land; investors being foreign organizations and individuals may rent land for execution of investment projects in Hon La economic zone and have rights and obligations corresponding to the forms of land allocation or land lease prescribed by the land law.

Article 19.- The State shall support investment in the construction of the systems of technical infrastructure up to the fences of functional zones in Hon La economic zone; support compensation and ground clearance in functional zones and resettlement of households that have land recovered; and support investment in wastewater and waste treatment works of functional zones according to the national target programs on investment support.

Article 20.- Before building works in service of production and business, infrastructure in functional zones, technical infrastructure systems or service and public facilities in Hon La economic zone, investors must tile dossiers of application for permits with the Hon La Economic Zone Management Board in accordance with the construction law. Within 7 working days after receiving a complete and valid dossier, the Hon La Economic Zone Management Board shall consider, decide on permit issuance and reply the investor in writing.

Historical or cultural relics found in the course of construction shall be handled in accordance with the Law on Cultural Heritage.

Article 21.- The management of construction of works in service of production, business, infrastructure in functional zones, technical infrastructure and service and public facilities in Hon La economic zone must comply with the construction law.

Chapter V

FINANCIAL REGIME, LABOR, BUSINESS, ENTRY, EXIT. RESIDENCE AND COMMUNICATION

Article 22.-

1. Foreigners and overseas Vietnamese working, investing or doing business in Hon La economic zone and their family members will be granted multiple visas with validity terms suitable to their working, investment and business durations in Hon La economic zone; may permanently or temporarily reside in the economic zone and Vietnam.

2. Tourists arriving in the seaport of Hon La economic zone by seagoing vessels under contracts with domestic tourism companies may fill in entry procedures at the port.

The Ministry of Public Security shall guide the Quang Binh province's Public Security Service to implement Clauses 1 and 2 of this Article.

3. The Hon La Economic Zone Management Board may grant labor permits to foreigners and overseas Vietnamese who work or conduct investment and business in Hon La economic zone in accordance with the labor law.

The Ministry of Labor. War Invalids and Social Affairs shall guide the Hon La Economic Zone Management Board to comply with Clause 3 of this Article.

Article 23.- The purchase, sale. payment and transfer of goods and services as well as other transactions between economic organizations and individuals in the non-tariff zone may be conducted in freely convertible currencies through bank accounts. Ordinary goods for daily-life activities may be bought in Vietnam dong.

Article 24-

1. Commercial banks and credit institutions established and operating according to the Law on Credit Institutions may open branches in Hon La economic zone to perform credit functions in Vietnam dong and foreign currencies which are related to economic activities in Hon La economic zone under current regulations.

2. Goods transported out of or into the non-tariff zone must all be valuated in freely convertible currencies; charges paid to state management agencies in Hon La economic zone shall be calculated in Vietnam dong. other charges shall be calculated in freely convertible currencies or in Vietnam dong in accordance with regulations on foreign exchange management.

Chapter VI

STATE MANEGEMTN OF HON LA ECONOMIC ZONE

Article 25.- Contents of state management of Hon La economic zone are provided for in Article 22 of the Government's Decree No. 29/2008/ND-CP of March 14,2008. on industrial parks, export processing zones and economic zones.

Article 26.- Powers and state management responsibilities of various authorities and branches with regard to Hon La economic zone comply with the provisions of Articles 23 thru 35 of the Government's Decree No. 29/2008/ND-CP of March 14. 2008, on industrial parks, export processing zones and economic zones.

Article 27.- Functions, tasks, powers and organizational structure of the Hon La Economic Zone Management Board comply with the provisions of Articles 36 thru 39 of the Government's Decree No. 29/2008/ND-CP of March 14. 2008. on industrial parks, export processing zones and economic zones.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 28.- Operations, rights and duties of domestic and individuals involved in production and trading of goods and services and enterprises investing in infrastructure construction and business in Hon La economic zone which are not provided for in this Regulation must comply with the provisions of Government's Decree No. 29/ 2008/ND-CP of March 14, 2008, on industrial parks, export processing zones and economic zones, and related legal provisions on investment, enterprises, cooperatives, customs, land, construction, commerce, labor, environmental protection, tax. as well as relevant laws and treaties to which Vietnam is a contracting party.

Article 29.- From the effective date of this Regulation, domestic and foreign organizations and individuals that have been investing and trading in goods and services in Hon La economic zone before the promulgation of this Regulation are entitled to incentives for their remaining preferential durations like those that invest, produce or trade in goods or services in the economic zone under this Regulation.