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HOCHIMINH city (HCM)-Saigon: Industrial Parks

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LINH TRUNG EPZ - HCM CITY, VIETNAM

LEASE OF STANDARD FACTORY BUILDING

BASIC RENTAL	1st TO 5st YEAR	6st TO 10st YEAR	11st TO 15st YEAR	AFTER 15st YEAR
BUILDING AREA ( price per m2/month )	1.6 USD per m2/ month	1.5 USD per m2/ month	1.4 USD per m2/ month	1.3USD per m2/ month
OPEN SPACE ( price per m2/ year )	2.5 USD per m2/ year	2.0 USD per m2/ year	1.6 USD per m2/ year	1.2 USD per m2/ year

DEPOSIT: equal to the first year rental, to be paid upon signing the Agreement to Lease Factory Building.

NOTE: No VAT for EPZ enterprises. For IP enterprises, rental & utility fees will be added with VAT (which is refundable as to the regulations).

LAND RENTAL

Applied from November 3, 2003.

INSTALLMENT PAYMENT: (Lease term up to Dec 26, 2052):

BASIC RENTAL	PAYMENT METHOD: 3 OPTIONS
USD 25/m2	First year: 50% of the total land rental. Each of the next 5 years: 10% of the total land rental, together with 7% interest on the reducing balance. First year: 30% of the total land rental. Each of the next 7 years: 10% of the total land rental, together with 7% interest on the reducing balance. First year: 100% of the total land rental

DEPOSIT: equal to 15% of the total land rental, to be paid upon signing the Agreement to Lease Land.

YEARLY PAYMENT:

BASIC RENTAL	1ST TO 10TH YEAR	11TH TO 20TH YEAR	21ST TO 30TH YEAR	AFTER 3OTH YEAR
BASIC RENTAL	2.5 USD/ m2/ year	2.0 USD/ m2/ year	1.5 USD/ m2/ year	1.0 USD/ m2/ year

DEPOSIT : equal to the first year rental, to be paid upon signing Agreement to Lease Land.

UTILITIES RATE (Exclusive of VAT)

UTILITIES RATE

Electricity	Normal time (4:00?18:00)	Low time (22:00-4:00)	Peak time (18:00-22:00)
Low voltage (380 V)	7.2 cents/KWH	3.9 cents/KWH	11.2 cents/KWH
Medium voltage (15KV)	6.7 cents/KWH	3.6 cents/KWH	10.5 cents/KWH
Water	22 cents / m3
Fee for use of public utilities	3 cents / m2 / month (applied since completion of factory building)
Wastewater treatment fee	20 cents /m3 (accounted as 80% of consumed clean water).

NOTE:

RENTAL shall be increased by 10% for warehousing enterprises; and 20% for commercial service enterprises .
For manufacturing and warehousing enterprises the maximum lease term is 50 YEARS; for service enterprises 25 YEARS.
No VAT for EPZ enterprises. For IP enterprises, rental & utility fees will be added with VAT (which is refundable as to the regulations).
Land rental may be adjusted without prior notice.

FINANCIAL INCENTIVES:

TYPES OF TAX	EPZ ENTERPRISES	IP ENTERPRISES
EXPORT TAX	FREE
IMPORT TAX	FREE In respect of goods imported to form fixed assets of enterprises; Raw materials, goods imported for production of goods for exports and service business.	FREE In respect of goods imported to form fixed assets of enterprises; In respect of raw materials for production for five (5) years from the time when production commences; In respect of raw materials, spare parts, parts and materials imported for production of goods for export.
CORPORATE INCOME TAX TAX EXEMPTION TAX REDUCTION	TAX RATE: 10% 4 years exemption since operation starts to earn profit 4 subsequent years: 5% on net profit Years after: 10% on net profit
VALUE ADDED TAX	FREE In respect of equipment, machinery and specialized means of transportation which form part of technological line not yet domestically produced and which are imported to form fixed assets of enterprises; In respect of raw materials imported for production of products to be supplied to other enterprises directly producing goods for export; In respect of goods imported for service business (Only applicable to EPZ Enterprises)
TAX ON PROFIT REMITTANCE TO FOREIGN COUNTRY	3 % on the remitted profit amount

Source: Department of Ministry of Investment and Planning, HCM city, Vietnam (HCMC website)