HO CHI MINH CITY EXPORT PROCESSING AND INDUSTRIAL ZONES AUTHORITY (HEPZA)

*** HEPZA (Ho Chi Minh City Export Processing and Industrial Zones Authority) was established under a policy of the Government to establish a new economic model to implement the renovation and open door policies of the 6th Congress of the CPV (1986) for industrialization and modernization.

1.1. Overview:

HEPZA (Ho Chi Minh City Export Processing and Industrial Zones Authority) was established under a policy of the Government to establish a new economic model to implement the renovation and open door policies of the 6^th Congress of the CPV (1986) for industrialization and modernization.

Until 2010, under the authority of HEPZA, there have been more than 15 industrial zones and export processing zones, with over 900 enterprises and 170,000 workers. Until 2020, the City would be home to more than 22 industrial zones and export processing zones.

1.2. Investment Incentives

Exemption from import tax on equipment, machinery, special-use vehicles as part of the fixed assets of the enterprise; materials, accessories for export production; constructional material which have not been produced yet in Vietnam.
Exemption from export tax on export products.
Applicable VAT rates are 0%, 5% and 10%. The 0% rate applies to export of goods and certain services, including sales to EPZs.
Tax rate:
- 25 % applied for enterprises operating in EPZ&IZ excluding enterprises applied the incentive tax rate.
- 10% for 15 year period, exemption 4 years and reduction for 9 consecutive years applied for new enterprises established to conduct projects in the following sectors:
  - Manufacturing software products.
  - High technology in accordance with the provisions of the law, scientific research and technology development;
  - Investing in development of water plants, hydroelectric plants, water supply and drainage systems; bridges, roads, railroads, airports, seaports, river ports, stations and other important infrastructure projects determined by the Prime Minister

1.3. Preferential industries and services to attract investment until 2015

Mechanical manufacturing:

- To manufacture and assemble,

- To manufacture ship, machinery for agriculture and processing industry

- To manufacture machine-tool, electric equipment, engineering- electronics, industrial robots

Electronics and IT:

- To manufacture accessories, parts, industrial electronic products

- To manufacture computer, telecommunication equipment

- To manufacture software

- Research and development

- Human resource training

Processing Foodstuff

Chemicals industry:

- To manufacture pharmaceutical products, medicinal herbs, medicine.

- To manufacture chemical products for plastic industry, high-technical rubber products

1.4. Investment Process

One–stop procedure

	Contacts:	Procedure / documents
Step 1	EPZ or IZ’s Infrastructure Developing Company	Find available land/factories in EPZs and IZs and discuss land lease.
Step 2	HEPZA's Investment Department	Register for investment certificates
Step 3	HEPZA's Investment Department	Publish an announcement of establishment (Publish on three consecutively issues of a newspaper)
	HCMC Police Department (PC 13)	Register enterprise seal/contact
		Complete legal procedures: Register the list of key executives (if any)
	The Branch of HCMC State Bank – Department of Foreign Currencies	Open a bank account
	HCMC Tax Department	Register for enterprise tax code
	Industry and Information Service Centerof HEPZA	Visas for foreigners working in IZs and EPZs Immigration: Apply for visas and extended visas
	Local Police Station	Register for temporary residence for foreigners in EPZs and IZs
Step 4	EPZ and IZ Infrastructure Developing Companies	Sign land lease contract or rent/purchase factory contract
Step 5	Environment And Construction Management Department of HEPZA	Build/rent factories
Step 6	HEPZA Job Center	Recruit labor

(Source: HEPZA, 2010)

1.5. Land rates:

NO.	IZs/EPZs	Area (ha)	Leased land rate	Land lease price (for reference)
1	Tan Thuận EPZ	300	95.40%	168 – 200 USD/m²/lease period
2	Linh Trung 1 EPZ	62	100%	-
3	Linh Trung 2 EPZ	61.7	100%	-
4	Tân Tạo IZ (phase 1 & phase 2)	373,3	94%	210 – 250 USD/m²/lease period
5	Tân Bình IZ	130	100%	-
6	Lê Minh Xuân IZ	100	95.04%	80 – 150 USD/m²/lease period
7	Vĩnh Lộc IZ	203	88.04%	200 USD/m²/lease period
8	Tân Thới Hiệp IZ	28	100%	-
9	Tây Bắc Củ Chi IZ	208	100%	-
10	Bình Chiểu IZ	27.34	100%	-
11	Hiệp Phước IZ (phase 1)	311.4	100%	-
12	Hiệp Phước IZ (phase 2)	597	0%	110 USD/m²/lease period
13	Cát Lái II IZ	124	100%	-
14	Phong Phú IZ	148.4	0%	-
15	Tân Phú Trung IZ	542.64	24%	80 USD/m²/lease period
16	Đông Nam IZ	283	0%	55 USD/m²/lease period