Laws of Vietnam

THE PRIME MINISTER

DECIDES:

Article 1.- To promulgate together with this Decision the Regulation on operation of Cau Treo international border-gate economic zone, Ha Tinh province.

Article 2.- This Decision takes effect 15 days after its publication in "CONG BAO" and replaces the Prime Minister's Decision No. 177/1998/QD-TTg of September 15, 1998, on the pilot application of a number of policies in Cau Treo international border-gate area, Ha Tinh province.

Article 3.- Ministers, heads of ministerial-level agencies, heads of government-attached agencies and the president of the People's Committee of Ha Tinh province shall implement this Decision.

Prime Minister
NGUYEN TAN DUNG

REGULATION ON OPERATION OF CAU TREO INTERNATIONAL BORDER-GATE ECONOMIC ZONE, HA TINH PROVINCE

Chapter I

GENERAL PROVISIONS

Article 1.- Scope of regulation

This Regulation provides for the operation policies applicable to, and state management of Cau Treo international border-gate economic zone, Ha Tinh province; rights and obligations of domestic and foreign organizations and individuals investing, conducting business activities, entering, leaving or residing in Cau Treo international border-gate economic zone, Ha Tinh province.

Article 2.- Geographical boundary of Cau Treo international border-gate economic zone

Cau Treo international border-gate economic zone covers an area with delimited geographical boundary in the national territory and under the national sovereignty but has a unique economic-commercial space, embracing Tay Son township and Son Kim 1, Son Kim 2 and Son Tay communes of Huong Son district, Ha Tinh province.

Article 3.- Purposes of establishment of Cau Treo border-gate economic zone

1. To further enhance economic and commercial cooperation between the Socialist Republic of Vietnam and the People's Democratic Republic of Laos and other neighboring countries.

2. To tap economic benefits through regional cooperation mechanisms in order to boost socio-economic development of the Central Vietnam and contribute to national development and international economic integration.

3. To create an environment attractive to domestic and foreign investment; to exploit to the utmost existing advantages; to develop production and services; to boost export and expand markets.

4. To create jobs, promote training and raise the quality of human resources.

5. To build mountainous urban centers, create a motive-force economic zone and contribute to boosting economic restructuring in Ha Tinh province.

Article 4.- Encouragement and protection policies

1. The Government of the Socialist Republic of Vietnam encourages and protects the lawful rights and interests of domestic and foreign investors that invest or do business in Cau Treo international border-gate economic zone in such fields as investment in infrastructure and urban development; industrial development; trade in goods and services and other business activities in accordance with Vietnamese law and treaties to which Vietnam is a contracting party.

2. The State supports the promotion of investment, tourism and commerce in Cau Treo international border-gate economic zone and the provision of information on the zone's investment environment for potential investors at home and abroad.

Article 5.- Rights of organizations and individuals investing or doing business in Cau Treo international border-gate economic zone

Apart from rights provided for by Vietnamese law and treaties to which Vietnam is a contracting party, organizations and individuals that invest or do business in Cau Treo international border-gate economic zone may:

1. Enjoy incentives provided for by the Government for Cau Treo international border-gate economic zone. In case different incentive levels are prescribed in different legal documents regarding a single issue, the incentive level specified in the document of the highest legal validity shall be applied.

2. Use and pay charges for infrastructure works, public utilities and services in Cau Treo international border-gate economic zone such as roads, the system of technical infrastructure, lighting power, power supply, water supply and communication under agreement with infrastructure enterprises.

3. Transfer the rights to use land and assets attached to land within the lease or sub-lease duration in accordance with law and land-use purposes of projects. In case the initial investment purposes of the projects are changed, land-use rights and assets attached to land may only be transferred with the approval of competent agencies.

4. Mortgage the value of land-use rights and assets attached to land within the land lease or sub-lease duration at Vietnamese or international credit institutions operating in Vietnam under current provisions of Vietnamese law.

Article 6.- Capital sources for development of Cau Treo international border-gate economic zone

Cau Treo international border-gate economic zone is developed with the following major capital sources:

1. Annually, based on the State Budget Law, the state budget's capacity and investment projects on important socio-economic infrastructure works already 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 related agencies in, allocating capital from the source of targeted state budget support for Ha Tinh province to implement important investment projects on socio-economic infrastructure of Cau Treo international border-gate economic zone.

2. Development investment credit capital of the State.

3. Capital of domestic enterprises and people mobilized through direct investment projects or issuance of bonds, advance capital of subjects wishing to use infrastructure, and co-financed credit.

4. Foreign capital, including foreign direct investment in the forms of build-operate-transfer (BOT), build-transfer (BT) and build-transfer-operate (BTO); capital of credit institutions; and capital of foreign organizations and individuals.

5. The land may be used to raise capital for investment in infrastructure construction and ground clearance for development investment.

6. Technical and social infrastructure facilities in Cau Treo international border-gate economic zone will be included in the list of projects calling for official development assistance (ODA).

7. Commercial banks and credit institutions set up and operating under the Law on Credit Institutions may open branches in Cau Treo international border-gate economic zone to perform credit operations in Vietnam dong and foreign currencies for economic activities in the zone under current regulations.

Article 7.- Goods and service exchange relations between Cau Treo international border-gate economic zone and the domestic market

Goods and service exchange relations between Cau Treo international border-gate economic zone and the domestic market are considered import and export relations and subject to customs inspection and supervision under current provisions of law.

Article 8.- Customs procedures at Cau Treo international border-gate economic zone

1. Goods, means of transport, luggage and foreign currencies brought from inland Vietnam into Cau Treo international border-gate economic zone and vice versa must go through all customs procedures and be subject to customs inspection and supervision in accordance with current provisions of Vietnam law.

2. Farm produce turned out by inhabitants in Cau Treo international border-gate economic zone and goods produced or processed in Cau Treo international border-gate economic zone without using raw materials or accessories imported from abroad, when being imported into inland Vietnam, are exempt from customs procedures.

3. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the People's Committee of Ha Tinh province in, specifying customs procedures at Cau Treo international border-gate economic zone, ensuring clear and convenient customs clearance procedures so as to meet requirements of investment, production and business activities in the zone.

Article 9.- Import and export activities in Cau Treo international border-gate economic zone

1. Organizations and individuals doing business in Cau Treo international border-gate economic zone may import and export all kinds of goods, except those on the list of goods banned from import or export in accordance with Vietnamese law.

2. The import and export of goods on the list of goods subject to conditional import or export and goods subject to business restriction comply with the guidance of line management ministries.

Article 10.- Processing, temporary import for re-export, transportation from or to border gates, transit through and transportation within Cau Treo international border-gate economic zone

1. The processing, temporary import for re-export, transportation from or to border gates and transit of goods in Cau Treo international border-gate economic zone comply with current provisions of Vietnamese law regarding processing, temporary import for re-export, transportation from or to border gates and transit, and treaties to which Vietnam is a contracting party.

2. The transportation of goods from Cau Treo international border-gate economic zone to commercial and economic zones of Laos and vice versa complies with relevant treaties signed between the Vietnamese Government and Lao Government.

3. Unused quantities of production raw materials and supplies imported from abroad by domestic and foreign organizations and individuals that are engaged in goods production and trading or service provision in Cau Treo international border-gate economic zone, and faulty products of some commercial value may be sold into inland Vietnam after customs procedures are completed and import tax thereon is paid according to current regulations.

4. Investment projects on production of exports and transportation of in-transit goods must comply with current provisions of laws.

Article 11.- Goods banned from circulation in Cau Treo international border-gate economic zone

The following goods are banned from circulation in Cau Treo international border-gate economic zone:

1. Goods banned from import or export under Vietnamese law;

2. Goods banned from circulation under Vietnamese law.

Article 12.- Goods subject to separate management regulations

Goods subject to separate management regulations in Cau Treo international border-gate economic zone include:

1. Gifts;

2. Movables;

3. Items of diplomatic missions and international organizations currently operating in Vietnam and luggage of persons entitled to diplomatic immunities.

Article 13.- Entry and exit of Lao citizens residing in districts bordering on Ha Tinh province

1. Citizens of the People's Democratic Republic of Laos (bellow referred to as Lao citizens for short) who reside in districts bordering on Ha Tinh province may enter and leave Cau Treo international border-gate economic zone with border identity cards or border laissez-passers granted by a competent Lao agency. They may sojourn in the zone for not more than 15 days.

2. When Lao citizens of the above category are invited by an agency or organization in Ha Tinh province to other places in Ha Tinh province, that agency or organization shall send to the Police Department of Ha Tinh province a written request for the grant of a travel permit. A permit is valid for a single use within five days and non-extendable.

Article 14.- Entry into, exit from, and stay and sojourn in, Cau Treo international border-gate economic zone

1. If foreigners, overseas Vietnamese and members of their families who are not entitled to visa exemption wish to enter Cau Treo international border-gate economic zone for market survey, working, investment or business purposes, they may enter the zone without a visa and stay or sojourn there for no more than 15 days.

2. The stay and sojourn in Cau Treo international border-gate economic zone shall comply wit regulations of the Ministry of Public Security and the Police Department of Ha Tinh province.

Article 15.- Vietnamese citizens' entering and leaving Cau Treo international border-gate economic zone

1. Vietnamese citizens may freely enter and leave Cau Treo international border-gate economic zone in accordance with regulations.

2. When Vietnamese citizens go abroad through Cau Treo international border-gate economic zone, they shall comply with Vietnamese law on entry and exit. All procedures for permitting the exit of persons and vehicles are carried out right at the border gate.

Article 16.- Management of road motor vehicles in Cau Treo international border-gate economic zone

All road motor vehicles, including those with right-hand drive, are permitted to enter and leave Cau Treo international border-gate economic zone for transporting cargo and passengers between Cau Treo international border-gate economic zone and Laos and other neighboring countries; when traveling into inland Vietnam, these vehicles must comply with international agreements which Vietnam has concluded or acceded to.

Chapter IV

INCENTIVE POLICIES

Article 17.- Investment incentives

1. Foreign direct investment projects and domestic investment projects in Cau Treo international border-gate economic zone are implemented under the Investment Law.

2. Domestic and foreign organizations and individuals may select and implement investment projects in Cau Treo international border-gate economic zone (except projects on the list of domains in which investment is banned under Vietnamese laws).

3. Domestic and foreign investors are encouraged to invest in the building of infrastructure in Cau Treo international border-gate economic zone.

4. All investment projects in Cau Treo international border-gate economic zone are entitled to the highest incentives granted to geographical areas with exceptionally difficult socio-economic conditions prescribed by the Investment Law, the Law on Value Added Tax, the Law on Special Consumption Tax, the Law on Enterprise Income Tax and other incentives under treaties to which Vietnam is a contracting party. In case different incentives are prescribed in different legal documents regarding a single issue, the highest incentive level shall be applied.

5. Organizations and individuals that have recorded outstanding achievements in mobilizing investment capital from official development assistance sources or in calling for foreign direct investment projects or domestic projects will be commended in accordance with the Law on Emulation and Commendation.

Article 18.- Enterprise income tax incentives

1. Investment projects in Cau Treo international border-gate economic zone are entitled to an enterprise income tax rate of 10% for five years from the date of commencement of business operation; enterprise income tax exemption for four years after taxable income is generated and a 50% reduction of payable enterprise income tax amounts in subsequent nine years.

2. Investment projects on building new production lines, expanding production, renewing technology, improving the ecological environment or raising production capacity are entitled to exemption from enterprise income tax on the additional income brought about by the investment for a maximum duration of four years and a 50% reduction of payable tax amounts for a maximum duration of subsequent seven years.

Article 19.- Personal income tax incentives

Persons working in Cau Treo international border-gate economic zone who are liable to personal income tax under law are entitled to a 50% reduction of payable tax amounts.

Article 20.- Value added tax and special consumption tax incentives

1. Goods and services produced and consumed in Cau Treo international border-gate economic zone and goods and services imported from abroad into the zone are not subject to value added tax. Particularly for under-24 seat cars which are imported into the zone by those other than enterprises having production or business establishments there, tax shall be paid in accordance with law.

2. Goods and services brought from inland Vietnam into Cau Treo international border-gate economic zone are entitled to a value added tax rate of 0%; goods and services brought from Cau Treo international border-gate economic zone into inland Vietnam for consumption are liable to value added tax in accordance with law.

3. Goods and services liable to special consumption tax which are produced and consumed in Cau Treo international border-gate economic zone and goods and services liable to special consumption tax which are imported from abroad into the zone are not subject to special consumption tax. Particularly for under-24 seat cars, tax shall be paid in accordance with law.

4. Goods and services liable to special consumption tax which are exported abroad from Cau Treo international border-gate economic zone are not subject to special consumption tax.

5. Goods and services liable to special consumption tax which are brought from Cau Treo international border-gate economic zone into inland Vietnam for consumption are subject to special consumption tax in accordance with law.

Article 21.- Import tax and export tax incentives

1. Goods and services originating from inland Vietnam and goods and services imported from abroad into Cau Treo international border-gate economic zone are exempt from import tax and export tax. Particularly for under-24 seat cars which are imported into the zone by enterprises having no production or business establishments there, tax shall be paid in accordance with law.

2. When exported abroad, goods produced, processed, re-processed or assembled in Cau Treo international border-gate economic zone are exempt from export tax.

3. Goods produced, processed, re-processed or assembled in Cau Treo international border-gate economic zone with the use of imported raw materials, supplies, accessories and semi-finished products, when imported into inland Vietnam, are exempt from import tax for five years after the date of commencement of production; if these goods do not contain imported raw materials or accessories, they are not liable to import tax upon importation into inland Vietnam.

4. Goods which are produced in Laos and imported from Cau Treo international border-gate economic zone into inland Vietnam are entitled to import tax reduction according to current provisions of Vietnamese law on the basis of treaties signed between the two governments.

5. Domestic and foreign tourists, when entering Cau Treo international border-gate economic zone, may buy in the zone and bring into inland Vietnam duty-free imported goods (other than those on the list of goods banned from import) valued at not more than VND 500,000/tourist/day. When the value of goods exceeds VND 500,000/tourist/day, goods owners shall pay import tax on the excessive value in accordance with law.

Before implementing this policy, the People's Committee of Ha Tinh province shall promulgate regulations on the identification of tourists entitled to this policy, ensuring strict management and preventing tax evasion.

Article 22.- Credit incentives

Enterprises of all economic sectors that invest or conduct production or business activities in Cau Treo international border-gate economic zone may borrow concessional credit loans under the Government's regulations on development investment credit of the State.

Article 23.- Carrying forward of business losses

After making tax finalization with tax offices, if organizations or individuals engaged in goods production or trading or service provision, foreign-invested enterprises or foreign parties to business cooperation contracts operating in Cau Treo international border-gate economic zone suffer from losses, they may carry forward such losses to subsequent years and clear them against taxable incomes. The maximum duration for loss carrying-forward is five years.

Article 24.- Land and housing incentives

1. Organizations and individuals having investment projects in Cau Treo international border-gate economic zone are entitled to land rental exemption for the first 11 years after the date of signing of the land lease contract and a land rent rate equal to 30% of the land rent rate applicable to mountainous districts of Ha Tinh province from the 12th year on.

2. All land and water surface areas already planned for development investment in Cau Treo international border-gate economic zone shall be allocated once to the Management Board of Cau Treo international border-gate economic zone.

The Management Board of Cau Treo international border-gate economic zone shall organize compensation and ground clearance in accordance with law in order to re-allocate or lease land to investors. The allocation or lease of land to each specific investment project shall be decided by the Management Board of Cau Treo international border-gate economic zone in accordance with law; the Management Board of Cau Treo international border-gate economic zone shall take responsibility for the efficient use of allocated land and water surface areas. The land rent rates shall be based on the levels decided by the People's Committee of Ha Tinh province.

Article 25.- Implementation of financial regime

1. Organizations and individuals doing business in Cau Treo international border-gate economic zone shall comply with the financial regime currently prescribed by Vietnamese law.

2. The Ministry of Finance shall specify the financial regime and customs procedures applicable to Cau Treo international border-gate economic zone.

Article 26.- Transaction and payment currencies

The purchase, sale, payment, transfer and other transaction relations between organizations and individuals doing business in Cau Treo international border-gate economic zone are made in Vietnam dong, Laos kip and other freely convertible foreign currencies in accordance with regulations of the State Bank of Vietnam.

Article 27.- Responsibilities of the People's Committee of Ha Tinh province

1. To direct the formulation and approval of the master planning and detailed development planning; to formulate a Regulation on coordinated operation of Cau Treo international border-gate economic zone and a Regulation on management of land in Cau Treo international border-gate economic zone.

2. To direct the management of projects under approved plannings, approve development investment projects and annual plans on capital construction investment in Cau Treo international border-gate economic zone.

3. To assume the prime responsibility for, and coordinate with concerned ministries and branches in, promulgating separate regulations, ensuring strict management of the operation of Cau Treo international border-gate economic zone.

4. To direct the Management Board of Cau Treo international border-gate economic zone to perform tasks specified by the Prime Minister and the People's Committee of Ha Tinh province.

5. To direct the People's Committee of Huong Son district and functional agencies of Ha Tinh province to apply solutions so as to ensure social security, order and safety, facilitate the operation of enterprises in Cau Treo international border-gate economic zone and effectively combat smuggling activities in the province related to Cau Treo international border-gate economic zone.

6. To perform the work of compensation, ground clearance and resettlement for projects in Cau Treo international border-gate economic zone.

7. To make written agreement with the administration of Lao Bolykhamsay province on the principles for coordination in management and administration of the operation of Cau Treo international border-gate economic zone on the basis of each country's laws in force and the special friendship relation between the two peoples.

Article 28.- Organizational structure of the Management Board of Cau Treo international border-gate economic zone

1. The Management Board of Cau Treo international border-gate economic zone is set up by the Prime Minister at the proposal of the People's Committee of Ha Tinh province and the Minister of Home Affairs.

2. The Management Board of Cau Treo international border-gate economic zone is a state management agency under the People's Committee of Ha Tinh province which performs the centralized and unified management of investment, construction and economic development activities in the zone according to its own regulation, regulations on coordinated operation, and the implementation schedule, planning and plans approved by competent state agencies.

3. The Management Board of Cau Treo international border-gate economic zone has the legal person status; seal bearing the national emblem; a working office; full-time staff; administrative and non-business operating funds and development investment capital allocated annually from the state budget.

4. The head and deputy heads of the Management Board of Cau Treo international border-gate economic zone are appointed by the president of the People's Committee of Ha Tinh province.

Article 29.- Tasks and powers of the Management Board of Cau Treo international border-gate economic zone

The Management Board of Cau Treo international border-gate economic zone shall perform tasks and powers specified for management boards of border-gate economic zones, those prescribed in this Regulation, and has the following tasks and powers:

1. To formulate a master plan and a detailed development plan, formulate a regulation on coordinated operation of Cau Treo international border-gate economic zone and submit them to competent authorities for approval, and organize their implementation.

2. To grant, modify and withdraw business registration certificates, licenses for establishment of commercial representative offices and branches of foreign organizations and traders, investment certificates, investment incentive certificates, work permits for foreigners and overseas Vietnamese working or conducting production or business activities in Cau Treo international border-gate economic zone and other permits and certificates under the authorization of competent state agencies.

3. To formulate price brackets and rates of fees and charges to be applied in Cau Treo international border-gate economic zone and submit them to competent agencies for consideration and promulgation in accordance with law.

4. To act as the focal agency for administrative reform and information technology application in service of management work in the border gate and Cau Treo international border-gate economic zone.

5. To formulate programs on promotion of investment, trade, tourism and services and submit them to competent agencies for approval, and organize the introduction, negotiation and promotion of investment, trade and services at home and abroad.

6. To formulate a list of investment projects and annual plans on capital construction investment and submit them to competent agencies for approval, and organize their implementation.

7. To manage and efficiently use investment sources in Cau Treo international border-gate economic zone; to direct and effectively manage construction projects funded with the state budget in the zone in strict accordance with regulations.

8. To allocate or lease land or water surface areas to investors for the implementation of investment projects in accordance with current provisions of law.

9. To manage and organize the provision of support services for investment, production and business activities of investors in Cau Treo international border-gate economic zone.

10. To assume the prime responsibility for, and coordinate with local administration and related agencies in, ensuring the compliance of all activities in Cau Treo international border-gate economic zone with this Regulation and the Regulation on coordinated operation of Cau Treo international border-gate economic zone.

11. To coordinate with the management board of economic zones (commercial zones) of the People's Democratic Republic of Laos in order to ensure that economic zones (commercial zones) are developed in accordance with current agreements between the Government of the Socialist Republic of Vietnam and the Government of the People's Democratic Republic of Laos as well as between Ha Tinh province and Bolykhamsay province.

Article 30.- Coordination in state management of Cau Treo international border-gate economic zone

Concerned ministries and branches shall perform the state management of Cau Treo international border-gate economic zone, guide and authorize the Management Board of Cau Treo international border-gate economic zone to perform functions and tasks within their competence in the domains of investment, construction, planning, management of natural resources and environment, urban management and development, labor management, import and export and other domains in accordance with law and this Regulation.

For domains not decentralized or authorized to the Management Board of Cau Treo international border-gate economic zone, concerned ministries, branches and People's Committee of Ha Tinh province shall perform the state management of Cau Treo international border-gate economic zone by setting up their attached units in the zone to perform assigned tasks so as to facilitate operations of investors and enterprises in the zone.

Article 31.- Implementation provisions

Other issues concerning the operation of organizations and individuals in Cau Treo international border-gate economic zone not yet mentioned in this Regulation comply with relevant provisions of the Commercial Law, Investment Law, Enterprise Law, Land Law, other legal documents, and treaties to which Vietnam is a contracting party.

From the effective date of this Regulation, incentive mechanisms and policies specified in this Regulation are also applied to domestic and foreign organizations and individuals that have been conducting investment or business activities in Cau Treo international border-gate economic zone for the remaining period.