THE PRIME
MINISTER OF GOVERNMENT
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No: 53/1999/QD-TTg
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Hanoi, March 26,
1999
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DECISION
ON A NUMBER OF MEASURES TO ENCOURAGE FOREIGN
DIRECT INVESTMENT
THE PRIME MINISTER
Pursuant
to the Law on Organization of the Government of September 30, 1992;
Pursuant to the Law on Foreign Investment in Vietnam of November 12, 1996;
With the aim of encouraging and creating even more favorable conditions for the
activities of the enterprises with direct foreign investments;
At the proposal of the Minister of Planning and Investment,
DECIDES:
Article 1.- Prices of goods and services
To adjust the prices of some following goods and
services:
1. Power selling price:
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Basing itself on this selling price of power,
the Government Pricing Commission shall set the concrete selling price of power
for production, business and services of foreign-invested enterprises.
2. Telecommunication prices and charges
- From July 1st, 1999 the price of telephone
installation for foreign-invested enterprises and foreigners shall be the same
as for domestic enterprises and Vietnamese.
- From July 1st, 1999 telephone subscribers
charge for foreign-invested enterprises and foreigners is 10 USD/unit/month.
Inner region telephone charge shall apply the same rate as for domestic
enterprises and Vietnamese.
- From July 1st, 1999 international
telecom-munication charge from Vietnam to other countries shall be reduced by
an average of 10%. From July 1st, 1999 telecommunication surcharge from the
hotels shall not exceed 15% of the charge at post offices.
Basing itself on the above-said prices and
charges, and after consulting the Government Pricing Commission, the General
Department of Post and Telecommunications shall provide for the concrete charge
for telephone installation, the telephone subscribers charge, the inner region
telephone charge and the international telecom-munication charge from Vietnam
to other countries.
3. Price of clean water
From July 1st, 1999 the People’s Committees of the provinces and centrally-run
cities shall apply the same selling price of clean water for use purpose
without distinction of domestic enterprises, foreign invested enterprises,
Vietnamese and foreigners as stipulated in Inter-ministerial Circular No.
02/TTLB of April 28, 1997 of the Ministry of Construction and the Government
Pricing Commission.
Article 2.- Charges and fees
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The Ministry of Finance and the People’s Committees of the provinces and centrally-run
cities shall have to guide and inspect the implementation of this regulation.
2. The Ministry of Finance shall propose to the
Government for amendments to Decree No.193/CP of December 29,1994 of the
Government so that administrative fee shall be collected only for the
registration of licenses of foreign invested enterprises as from July 1st,
1999.
3. From July 1st, 1999 the fees for the
installation of representative offices of foreign economic organizations in
Vietnam shall be conducted at the rate of one million Vietnam Dong, and no fee
shall be collected for the extension of permits.
4. Basing itself on Decision No. 04/1999/ND-CP
of January 30, 1999 of the Government, the Ministry of Finance shall decide according
to its competence or shall propose to the Prime Minister for the reduction or
abolition effective from July 1st, 1999 of the charges and fees issued by the
ministries, branches or People’s
Committees of the provinces and cities directly under the Central Government
and the Managing Boards of Industrial Zones at provincial level which do not
conform with their competence or with the character and objective of the
collection of charges and fees.
Article 3.- Currency unit to determine the prices of services,
charges and fees
From July 1st, 1999 the Vietnam Dong shall be
used to determine the various prices of services, charges and fees except
otherwise provided for in separate regulations. The prices of services, charges
and fees set in the US dollar stipulated in Article 1 and Article 2 of this
Decision shall be converted into Vietnam Dong at the average exchange rate on
the inter-bank foreign exchange market announced by the Vietnam State Bank.
Article 4.- Wages of Vietnamese laborers working at foreign-invested
enterprises
1. From July 1st, 1999 the minimum wage and the
wages of Vietnamese laborers working at foreign-invested enterprises shall be
determined and paid in Vietnam Dong on the basis of the conversion of the
current minimum wage and wages set in the US dollar into Vietnam Dong at the
average exchange rate on the inter-bank foreign exchange market announced by
the Vietnam State Bank.
From July 1st, 1999 when the consumer price
index rises by 10% and more compared with the latest readjustment, the minimum
wage and the wages of the Vietnamese laborers working at foreign-invested
enterprises shall be readjusted accordingly.
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The minimum wage as stipulated in this clause
shall apply to the projects which are licensed for investment after the date
when this Decision takes effect. For the projects which have been licensed
before the date when this Decision takes effect, the foreign-invested
enterprises and the collectives of laborers there shall agree on the payment of
wages as stipulated in this clause on the basis of voluntariness, preservation
of stability of production and maintenance of jobs for the laborers.
3. The Ministry of Finance shall propose to the
Government to lay down concrete stipulations for the implementation of Point b,
Clause 2 of Article 16 of the Trade Union Law. For the foreign-invested
enterprises, the regime of deduction of trade union expenditures from the wage
fund shall not apply.
Article 5.- Issue of work permits
The Ministry of Labor, War Invalids and Social
Affairs shall propose to the Government to amend Decree No. 58/CP of October 3,
1996 of the Government by authorizing the Labor, War Invalids and Social
Affairs Services and the Managing Boards of Industrial Zones at provincial
level to issue work permits for foreigners to work at foreign-invested
enterprises through simple and convenient procedures, effective from July 1st,
1999. The time limit of the work permit shall have to conform with that of the
work contract signed between the enterprise and the foreigner laborer.
Article 6.- Recruitment and training of laborers
Foreign-invested enterprises shall recruit
Vietnamese labor through Vietnam labor supply organizations. Following a
maximum period of 30 days after receiving the request for labor supply of the
enterprise if the Vietnam labor supply organization cannot meet the request,
the enterprise can directly recruit Vietnamese labor. The Ministry of Labor,
War Invalids and Social Affairs shall propose to the Government to amend Decree
No. 72/CP of October 31, 1995 and Decree No. 85/1998/ND-CP of October 20,1998
of the Government with a view to the implementation of the above stipulation as
from July 1st, 1999.
The Ministry of Labor, War Invalids and Social
Affairs shall arrange and strengthen labor supply organizations in order to
raise the quality of labor supply for foreign-invested enterprises.
The Ministry of Labor, War Invalids and Social
Affairs shall coordinate with the People�s
Committees of the provinces and centrally-run cities in organizing job training
in order to supply labor for foreign-invested enterprises.
Article 7.- A number of cases where value added tax is
applied
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2. The Ministry of Finance shall propose to the
Government to amend and supplement Decree No. 28/1998/ND-CP of May 11, 1998 and
Decree No. 102/1998/ND-CP of December 21, 1998 of the Government whereby the
following subjects which are imported by foreign-invested enterprises and
foreign parties to business cooperation contracts to create fixed assets
(exempt from import tax as stipulated in Article 63 of Decree No. 12/CP of
February 18, 1997 and Article 10 of Decree No. 10/1998/ND-CP of January 23,
1998 of the Government) are subjects not liable to value added tax:
- Equipment, machinery, specialized means of
transport in the technological line to create the fixed assets of the
enterprise;
- Construction materials that cannot yet be
produced in the country to create fixed assets for the enterprise.
Article 8.- Buying goods from and selling goods to export
processing enterprises
1. Except goods banned from export, enterprises
and individuals in the country allowed to sell goods to export processing
enterprises are exempt from export tax and need only to make a written
declaration with the Customs Service of the Export Processing Zone.
2. Export processing enterprises can sell into
the domestic market products produced by them:
- Raw materials, semi-finished products for
enterprises directly producing export goods.
- Goods on the list of substitutes to essential
imports that the country needs to import;
- Discarded materials and discarded products
which still have commercial value.
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Article 9.- Land use right of enterprises at industrial
parks and export processing enterprises
Enterprises at industrial parks and export
processing enterprises shall be issued with certificates of land use right
within the period of the contracts signed with the enterprises building and
trading in the infrastructures of industrial parks and export processing zones.
The General Land Administration shall issue
necessary documents to carry out the above stipulation.
Article 10.- Encouragement to the building of dwelling
houses for workers and infrastructure works out of the fences
Enterprises of all economic sectors and
foreign-invested enterprises can lease land at the lowest rent rate and are
exempt from or enjoy maximum reduction of taxes so as to invest in the
construction of dwelling houses for workers and infrastructure works out of the
fences of industrial parks and foreign-invested enterprises (educational,
training, medical establishments...)
Article
11.- A number of supplementary measures on investment promotion
1. The foreign-invested enterprises which meet
one of the following conditions shall enjoy the same preferences as the
projects on the List of projects to receive special encouragement for
investment:
a/ Exporting 80% and more of their products;
b/ Exporting 50% and more of their products and
using a big work force and a large quantity of raw materials and materials in
the country (making up from 30% upward of the production cost);
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- Exporting 50% and more of their products in
the field of raising, planting and processing agricultural, forestry and
aquatic products;
- Exporting 50% and more of their products and
using more than 500 laborers;
- Exporting 30% and more of their products and
using a large quantity of raw materials and materials in the country (making up
from 30% upward of production cost).
d/ Producing components and accessories of
engineering, electric, electronic goods with high added value, and using a
large quantity of raw materials and materials in the country;
e/ Processing minerals exploited in Vietnam.
2. Projects on the production of components and
accessories of engineering, electric and electronic goods are exempt from
import tax on production raw materials for 3 years after starting production.
3. Foreign investors investing in mountain areas
or deep-lying and remote areas shall enjoy a 5% tax rate on transferring
profits abroad.
4. Foreign-invested enterprises that meet
difficulties in implementing the projects and have to temporarily suspend
construction or operation shall enjoy reduction or exemption from land rental
corresponding to the time of stoppage.
5. Foreign-invested enterprises that have been
issued with quotas of exporting rice are allowed to directly buy raw material
paddy and rice of producers according to the guidance from the Ministry of
Trade.
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1. This Decision takes effect 15 days after its
signing.
2. The Ministers, the heads of ministerial-level
agencies, the heads of the agencies attached to the Government and the
presidents of the People’s Committees of the
provinces and centrally-run cities shall have to implement this Decision.
THE PRIME MINISTER OF
GOVERNMENT
Phan Van Khai