No.369/QD-UB dated February 8, 2002 of Haiphong People's Committee on issuance of local incentives, preferential treatments and encouragement for foreign direct investment in Haiphong

HAI PHONG PEOPLE'S COMMITTEE

• Based on the Law on organization of People's Council and People's Committee;

• Based on the Law on Foreign Investment in Vietnam dated 12 November 1996, the Law on Amendments of and Additions to a number of articles of the Law on Foreign Investment in Vietnam dated 9 June 2000 and Government Decree No. 24/2000/ND-CP dated 31 July 2000 making details regulations for implementation of the Law on Foreign Investment in Vietnam;

• Based on Government Resolution No. 09/2001/NQ-CP dated 28 August 2001 and Government Instruction No. 19/2001/CT-TTg dated 28 August 2001 on enhancing the attractiveness and raising effectiveness for foreign direct investment in the 2001-2005 period;

• Based on Decision No. 189/2000/QD-BTC dated 24 November 2000 by Minister of Finance on promulgating Regulation for rental of land, water surface, sea surface applicable to forms of foreign investment in Vietnam;

• Based on Resolution No 34/2002/NQ-HDND dated 11 January 2002 by Haiphong People's Council on a number of local preferential policies for encouraging Foreign Direct Investment in Haiphong;

• At the proposal of Director of Department of Planning and Investment of Haiphong (DPI) and Chairman of Haiphong Export Processing Zone and Industrial Zone Authority (HEPIZA);

Decides:

Article 1:  Projects in which investment is encouraged and entitled to preferential treatment include:

• Production of products for export;

• Processing of aquatic products of which at least 50% of products for export;

• Breeding aquatic products; breeding cattle, poultry; creation of various kinds of new strains;

• Shipbuilding; manufacturing of navigational equipment and devices; equipment and devices serving shipbuilding industry;

• Manufacturing of equipment, spare parts for vessels, fishing boats;

• Manufacturing of machinery, spare part for engines, hydraulics, compressing machines, and machining tools for mechanical processing;

• Metallurgy, production of steel billets, alloy steels, special metals;

• Production of heavy duty lifting equipment of from 10-ton capacity upward;

• Production of raw materials, ancillary materials for foot wears and garments for export;

• Projects in the field of info-tech, bio-tech and production of new material;

• Projects in the field of electronics serving industry and automation inputs;

• Projects in the field of social welfare (public health, education - training, culture);

• Projects investing in areas of socio-economic difficulty of Haiphong as specified in Appendix III attached to this Decision;

Article 2:  Preferential treatment for land rental and exemption from land rental

- To apply the preferential investment land rental unit price to FDI projects on land leased from the City as regulated in Appendix I attached to this Decision.

- Exemption from land rental for a number of years shall be applied to various projects on the basis of fields of investment; location of project; scale of investment; number of labors employed; proportion of products for export as regulated in Appendix I and Appendix II attached to this Decision.

- Enterprises investing in industrial zones and export processing zones are entitled to exemption from raw land rental as regulated in Appendix II attached to this Decision. The amount of raw land rental exempted in favour of enterprises invested in industrial zones or export processing zones shall be deducted either from land rental to be paid by the infrastructure development enterprises or from tax on capital use to be paid to the State by Vietnamese party in the joint venture enterprise or reimbursed gradually for every year from the City's budget. (Raw land is land in its original conditions without any leveling work for reclamation. Raw land rental is the land rental to be paid to the City by infrastructure development enterprises)

Article 3:

Support of compensation and relocation; site clearance; explosive detection and clearance

In case the land areas of project falls in planned areas for development of industrial zones, small sized industrial parks (using agricultural land), Haiphong People's Committee shall:

- Be responsible for organizing the implementation of site relocation and compensation.

- Subsidize 100% of the costs of compensation and site clearance, explosive detection and clearance on the land plot leased by the investor for project implementation in case the investor has paid the costs in advance. The subsidized cost shall be deducted gradually from annual payable land rental.

- Subsidize 50% of the costs of compensation and site clearance, explosive detection and clearance on the land plot leased by the investor for project implementation in other cases.

Separate regulations will be made applicable to investment project for developing infrastructure of industrial zones or new urban areas.

After 6 months from completion date of compensation and site clearance for the project, should the investor has not proceeded the project without any sound reasons, the land plot shall be withdrawn.

Article 4:  Support of site leveling cost

With regard to lower elevation land plots which require big amounts of site leveling costs, the investor shall be given partial support in term of leveling cost through gradual deduction from annual land rental to be paid by the investor; level of support is regulated in Appendix IV attached to this Decision.

Article 5:  Guarantee of infrastructure to boundary of the site

- For the land areas planned for development of industrial zones, small industrial parks, Haiphong People's Committee guarantees provision of basic infrastructure including power supply, water supply, drainage and sewage, traffic roads access to boundary of the site. In case the above mentioned infrastructure has been developed by the investor, those costs shall be reimbursed to the investor.

- With regard to off-site land area for development of basic infrastructure including roads, power grids corridor, water supply, drainage and sewage systems, the investor will be exempted from paying land rental, compensation and clearance cost. Should those costs have been paid in advance by the investor, they will gradually be deducted every year from the land rental to be paid by the investor.

- The cost to be reimbursed to the investor stated in this article shall be calculated in accordance with the construction norms of the City at the time of construction and to be approved by competent authorized agency.

Article 6:  Support of labour training

Haiphong People's Committee shall be responsible for training of labour with qualification of Grade 2 (in accordance with current regulations of the Vietnamese Government) at local Vocational Training Centers for projects at the requests of investor.

In case the investor trains workers by themselves, the training costs to qualification of Grade 2 shall be partially subsidized as follows:

+ 20% of training costs for projects employing less than 500 employees.

+ 30% of training costs for projects employing from 500 employees upward.

The support is applicable only to employees being local residents recruited the first time and signatories of long-term labour contracts. The training costs shall be calculated based on norms prescribed by Ministry of Labour, War invalid and Social Affairs and apply to training of labour in Vietnam.

Article 7:  Single price policy

Prices of clean water, raw water, waste collection charges, construction charges, and others charges under local authority's power shall be single-priced for both local and FDI enterprises.