INVESTMENT OPPORTUNITIES IN INDUSTRIAL ZONES

HIEP PHUOC INDUSTRIAL PARK

Location

Hiep Phuoc Commune, Nha Be District, Ho Chi Minh City, Vietnam - at a distance of 20 kilometers Southward of Ho Chi Minh City Center (HCMC) and 40 kilometers away from Soai Rap estuary.

Objective

Within the approved  Master Plan of 2.000 hectares, the first phase of 332 hectares has been carrying out

An Industrial Zone specialized for basic industries which need wide area and sea port. 

A Deep-Sea Port which is capable for vessels up to 30.000 DWT and more;

An Improved Access for vessels navigating from the East Sea to HPIP and Saigon Port system.

Infrastructure

Power: supplied by Hiep Phuoc Thermal Power Plant, a wholly foreign owned enterprise operated under the Law on Foreign Investment in Vietnam.

Fresh Water: currently supplied by Ho Chi Minh City Water Supply Company and Long Hau Ground Water Plant at the total capacity of 10,000 m3 per day.

Sewage Treatment: a 5,000 m3 capacity sewage treatment plant will be built up in the year 2007. Telecommunication: equipped with the latest technological devices and ready to serve.

Other Public Utilities

Particularities of the leased land

The Site: already be leveled with sands to reach the elevation of + 1.8 meter compared to the National Standardized Elevation (Mui Nai Datum), and the sub-grade compression  ratio (k) equals 0.85.

Infrastructure: All elements  including accessing road, electricity lines, water supply pipe, and sewage water drain- age are connected to the border of the site.

Leasing Area: not less than 10,000 m2

Lease term: Lease term commences at the date the Land Subleased Contract takes into effect and ends on December 29th, 2048.

Rent: US$ 100-120/m2/lease term

Payment Terms

Investors can choose either payment  in full or payment  by installments

Interest rate applied for payment  by installments: 8% per year for all installments based on the diminishing balance.

Infrastructure Maintenance and Public Services Fee

Amount             US$ 0.64 / m2 / year

Base     Calculated on the actual leased area and only charged when tenant  puts the factory into operation

Legal aspect of the leased land

When the whole rent paid, the investors shall be granted  the Certificates of Land Use Rights by the competent authority.

Taxation and Incentives

Enterprise income tax: preferential tax rates, exemption and reduction

For Newly-Established Entities

Criteria                                                                                   Place of investment

Preferential Tax Rate                                                            Hiep Phuoc IZ          Outside Izs        

                                                                                              (15%)                        (28%)       

Exempt period (after taxable income is generated)                              3 years       2 years

50% reduction of the payable tax amount                                           7 years       3 years

(subsequent to the exempt period)          

 Duration of enjoying of the preferential enterprise income tax rate is specified as follows:

-           The enterprise income tax rate of 15% shall be applied for 12 years after the entities start their business operations;

-           After the duration of enjoying of the preferential enterprise income tax rate described above, the entities shall pay enterprise income tax rate of 28%.

Conditions for enjoying of enterprise income tax preferences:

-           Making investment in Industrial Zones.

-           Employing an average number of laborers at least 20 laborers in a year;

-           Cost-accounting independently and registering for tax payment  according to declaration.

For Relocated Entities

Criteria                                                                                Place of relocation

                                                                        Hiep Phuoc IZ          Other IZs     Outside Izs

Exempt period                                                   2 years                   2 years       2 years

(after taxable income is generated)

50% reduction of the payable tax                         6 years                   5 years       2 years

amount  (subsequent to the exempt period)         

For entities that build new production chains, expand their scale, renew technology, improve the ecological environment and raise their production capacity

Terms                                                            Place of investment

                                                                     Hiep Phuoc IZ          Other IZs           Outside Izs

Exempt period                                                3 years                   1 years             1 years

(after taxable income is generated)                  

50% reduction of the payable tax                      5 years                   4 years             2 years

Amount (subsequent to the exempt period)      

(**) Source: The Government Decree No. 164/2003/ND-CP dated December 22, 2003 and The Government

Decree No. 152/2004/ND-CP dated August 06, 2004

VALUE ADDED TAX

VAT Rate: The VAT rate of 10% is applied to leasing land included infrastructure in an industrial zone. VAT Reimbursement

Entities that satisfy followed conditions shall be considered  for quarterly tax reimbursement in case of having the amount  of VAT on goods and services used for investment of VND 200 million or more:

. making new investment,

. having already registered their business and tax payment  by the tax deduction method,

. being in investment period,

. having not yet operated.

Objects not subject to value added tax

Equipment, machinery and specialized means of transport in technological chains and construction materials which have not yet been produced locally and need to be imported to form the enterprises’ fixed assets do not subject to VAT.

Import Duty Preferences

Import Duty Exemption

Foreign investment enterprises shall be entitled to exemption from import duties in respect of goods imported to form fixed assets, to expand their projects or to renew technology, including: machinery and equipment; special- ized means of transport which form part of the technological process; components, detailed parts, spare parts, support structures, moulds and accessories of the above equipment; construction materials which have not yet been produced locally.

Reimbursement of Paid Import Duty

Foreign investment enterprises are permitted to temporarily defer payment of import duties in respect of raw mate- rials and supplies imported for the production of goods for export for the period during which they are allowed to temporarily defer payment of import duties in accordance with the provisions of the Law on Export and Import Tax.

Beyond that deadline, foreign investment enterprises must pay import duties, and shall be refunded the import duties on raw materials imported in proportion with the exported  finished products.

Project Developer

Hiep Phuoc Industrial Park Joint Stock Company

Area B, Road No.1, Long Thoi Village, Nha Be District, Ho Chi Minh City, Vietnam

Tel : (+84.8)  37800345 – 37800350 – 37800351   Fax : (+84.8)  37800341

E-mail  : hiepphuocmkg@hcm.vnn.vn

Website: www.hiepphuoc.vn