Vietnam Industrial parks

A. Introduction: EPZs & IPs in Hochiminh city :

At present, Hochiminh city has 02 EPZs,08 IZs being in operation. The EPZs & IZs" Administration Authority is the authorized body in charge of activities of all the EPZs & Izs and is entrusted by the Ministry of Planning and Investment to grant licenses for projects going to be implemented in the EPZs & IZs. The HCMC EPZs & IZs? Administration is authorized to issue investment licenses for projects with investment capital up to USD 40 million

Fields of investment at the IZs :

  • Garment
  • Machinery
  • Electricity, Electronics, Rubber, Plastics
  • Wood processing
  • Paper
  • Packaging
  • Leather, Footwear
  • Chemicals
  • Metals
  • Foodstuff, Beverage.
  • 1. The EPZs & IZs accepting pollution causing projects:

    • Le Minh Xuan industrial zone and Hiep Phuoc industrial zone.
    •  At Tan Tao industrial zone, the acceptance depends on degree of pollution.

    2. Labour:

    • The EPZs attract 47 000 employees
    • The IZs attract 60 000 employees

    3. Investment supporting services ( in EPZs & IZs in HCMC ):

  • Banking
  • Accounting
  • Post & telecommunications
  • Supplying services: Fuel, Office stationery, Food...
  • Sanitary services
  • Insurance services
  • Project surveying
  • Law consulting
  • Transportation
  • Export-Import
  •  

    B. The EPZs & IZs in HCMC

    1. The EPZ Tan Thuan:

  • Total Area: 300 hectares
  • Area for rent : 195 hectares
  • Occupied Areas : 135.15 hectares
  • Land rental: USD 108 per m2 for 41 years
  • Ready-built workshops: USD 170/m2
  • Electricity rate: 0.075 US$/kWh, Water rate: 0.22 US$/m3
  • The conditions:
    + The minimum leased area: 2500 ha
    + Deposit: 5% of land rental
  • 2. The Linh Trung EPZ:

  • The first site area: 62 hectares
  • Area for rent: 45,39 hectares.
  • Occupied Areas : 43.32 hectares takes 95.42% of the total .
  • The second site area ( expanded area) : 61.7 hectares
    Land rental: : 50 USD/m2 /for 24 years at the EPZ
    45 USD/m2/for 25 years at the IZ
  • Rental conditions:
    Deposit: 5% of the land rental.
  • Electricity rate: 0.075 US$/kWh, Water rate: 0.38 US$/m3 at the EPZ. Electricity rate: 0.085 US$/kWh, Water rate: 0.40 US$/m3 at the IZ.
  • 3. The IZ Binh Chieu:

  • Total Area:27 hectares
  • Rental Areas :21 hectares
  • Occupied Areas :20 hectares
  • Land rental:30-40 USD/m2/for 47 years
  • Electricity rate: 0.085 US$/kWh
  • Rental conditions: Land rental depends on land position, Land area and payment methods.
    Deposit: 5% of the land rental
  • 4. The IZ Hiep Phuoc:

  • Total Area: 332 hectares
  • Rental Area : 198 hectares
  • Occupied Areas :18 hectares
  • Land rental : 35-50 USD/m2/for 48 years
    30-40 USD/m2/for 48 years
  •  

  • Conditions:
    Deposit 5% of land rental, in case with joint ventures
    Deposit depends on negotiations, in case with IPC company
  • Electricity rate: 0.75-0.90 US$/kWh, Water rate: 0.35 US$/m3
  • 5. The IZ Tan Tao.

  • Total Area:181 hectares
  • Rental Area :90 hectares
  • Occupied areas:52 hectares.
  • Land rental:45-64 USD/m2/for 48 years. The rental price of built factory: 1.7 US$/m2/month.
  • Conditions::
    - land rental rates depend on land position ,land area and payment methods.
    - The minimum leased area: 3000m2.
    - Deposit: 10%
  • Electricity rate: 0.070 US$/kWh, Water rate: 0.35 US$/m3.
  • 6. The IZ Tan Binh:

  • Total area:155 hectares.
  • Rental area :95 hectares.
  • Occupied Areas :13 hectares.
  • Land rental:45-55 USD/m2/for 48 years.
  • Conditions:
    Land rental is fully paid (01)and depends on rent duration and payment.
    Deposit:5% The minimum leased area:2000m2.
    Rental duration: not less than 20 years.
  • Electricity rate: 0.085 US$/kWh, Water rate: 0.35 US$/m3
  • 7. The IZ Vinh Loc:

  • Total Area: 207 hectares
  • Rental Area : 119 hectares
  • Occupied Areas : 30 hectares
  • Land rental: 30-40 USD/m2 /for 48 years
    Ready-built workshop: 2USD/m2/ per month
  • Conditions:
    Land rental is fully paid (01) and depends on rent duration and payment methods.
    Deposit: 5%
    The minimum leased area: 5000m2
  • Electricity rate: 0.085 US$/kWh, Water rate: 0.18 US$/m3
  • 8. The IZ Tan Thoi Hiep:

  • Total Area: 215 hectares
  • Rental Area : 135 hectares
  • Occupied Areas : 9 hectares
  • Land rental rates: 26-30 USD/m2 / for 48 years
    Ready-built workshop: 1.7 USD/m2/ per month
  • Conditions:
    Land rental is fully paid(01) and depends on rent duration and payment methods.
    Deposit 5-10%
    The minimum leased area: 5000m2
  • Electricity rate: 0.085 US$/kWh, Water rate: 0.35 US$/m3
  • 9. The IZ Tay Bac Cu Chi:

  • Total Area: 220 hectares
  • Rental Area : 140 hectares
  • Occupied Area : 11 hectares
  • Land rental rates: 28 - 45 USD/m2 /for 45 years
  • Conditions:
    Land rental depends on land position, land area and payment methods.
    Deposit: 5%
  • Electricity rate: 0.085 US$/kWh, Water rate: 0.30 US$/m3
  • 10. The IZ Le Minh Xuan:

  • Total Area: 100 hectares
  • Rental area: 66 hectares
  • Occupied Areas : 10 hectares
  • Land rental: 36 USD/for 48 years
    Ready-built workshop: 1.5 USD/m2/ per month
  • Conditions:
    Land rental depends on rent duration and payment methods.
    Fully paid (01).
    Deposit : 5%
  • Electricity rate: 0.085 US$/kWh, Water rate: 0.28 US$/m3
  •  

    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

    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)


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