Decree No. 111/2015/ND-CP on the Development of Support Industries

 

DECREE

On the development of supporting industries

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Investment Law on November 26, 2014;

Pursuant to the High Technology Law dated November 13, 2008;

Pursuant to the Law on Export Duties and Import Duties dated June 14, 2005;

Pursuant to the Enterprise Income Tax Law on June 3, 2008; Law Amending and Supplementing Certain Provisions of the Enterprise Income Tax Law on June 19, 2013;

Pursuant to the Value Added Tax Law on June 3, 2008; Law Amending and Supplementing Certain Provisions of the Value Added Tax Law on June 19, 2013;

Pursuant to the Law on Tax Administration dated November 29, 2006; the Law Amending and Supplementing Certain Articles of the Law on Tax Administration dated November 20, 2012;

Pursuant to Law No. 71/2014/QH13 dated November 26, 2014 amending and supplementing certain articles of the Laws on Taxation;

The Government issues this Decree on management and development of industrial clusters.

Pursuant to the State Budget Law on December 16, 2002;

At the proposal of the Minister of Industry and Trade,

The Government promulgates the Decree on the development of supporting industries.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates support policies and preferential policies aimed at developing supporting industries.

Article 2. Applicability

Organizations and individuals carry out activities to develop supporting industries in Vietnam.

Article 3. Explanation of Terms

In this Decree, the following terms are understood as follows:

2. A supporting industry production project is an investment project in Vietnam to produce supporting industry products.

3. The priority list of supporting industry products for development is a list of supporting industry products specified in the Appendix attached to this Decree, which is adjusted appropriately according to the country's economic and social development situation at different periods.

5. A supporting industry development program is a collection of contents and tasks regarding promotional and assistance activities aimed at developing the production of supporting industry products.

Chapter II
SUPPORT POLICIES FOR THE DEVELOPMENT OF
SUPPORTING INDUSTRIES

Article 4. Research and Development

1. Organizations and individuals conducting research and development of production of supporting industry products listed in the priority list of supporting industry products for development shall enjoy preferential treatment and support as follows:

a) They shall be funded from the supporting industry development program, supported by funds and other sources allocated for research, development, and training;

b) They shall be considered for partial funding for research and development from the supporting industry development program in cases where they invest in research and development of technology that yields high application results;

c) They shall be supported by the State up to a maximum of 50% of the costs for trial production projects of supporting industry products.

Article 5. Application and Transfer

a) Joint projects and plans between manufacturing enterprises and units with applicable technologies in technology transfer shall be partially funded;

b) Costs for testing and manufacturing supporting industry products listed in the priority list of supporting industry products for development shall be supported up to a maximum of 50%.

3. The State shall support up to 75% of the costs for technology transfer for projects producing materials using more than 85% of raw materials derived from deep processing of domestic mineral resources including metal ores, non-metallic ores, and petrochemical products for the production of supporting industry products.

a) Projects producing products listed in the Priority Supporting Industry Products Catalogue shall be supported with funding from the Supporting Industry Development Program for training human resources;

b) Individuals directly implementing tasks under the Supporting Industry Development Program shall be prioritized for training to improve their qualifications both domestically and internationally according to state training programs.

2. Training institutions for human resources in supporting industries:

a) The State encourages organizations and individuals to invest, form joint ventures, and collaborate to establish training institutions directly serving the production of supporting industry products;

b) Training institutions serving the production of supporting industry products shall be sponsored and supported by science and technology funds, training funds, and other funds;

c) The State encourages universities, research institutes, and existing training institutions to participate in training human resources for the supporting industry sector.

Article 7. International Cooperation on Supporting Industries

1. Expanding international cooperation in supporting industry activities, particularly with foreign countries, regions, organizations, and individuals, multinational corporations, and foreign economic groups with advanced science and technology levels to attract investment and create connections between domestic and foreign organizations and individuals engaged in supporting industry activities.

2. Strengthening activities to seek and transfer advanced technology into Vietnam to enhance the capabilities of domestic supporting industry enterprises.

3. Promoting international cooperation in the field of developing human resources for supporting industries, prioritizing cooperation in training students in supporting industry engineering fields at advanced universities, colleges, and vocational schools in the region and worldwide; attracting and effectively utilizing highly qualified young talents to cooperate in researching and teaching supporting industries in Vietnam.

Products in the Priority Supporting Industry Products Catalogue shall be entitled to:

1. Prioritize participation in the National Trade Promotion Program.

2. Support for part of the costs of registering trademarks, expenses for participating in domestic and international trade fairs, market information access fees, and service fees from the Supporting Industry Development Program.

1. Supporting Industry Development Centers shall be established based on reorganizing existing units of the Ministry of Industry and Trade to perform one of the following tasks:

a) Implementing activities related to the application and transfer of technology, and assisting in the trial production of supporting industry products listed in the Priority Supporting Industry Products Catalogue;

b) Assisting enterprises in establishing production management systems that meet international standards;

c) Providing training to improve technical management personnel for the production of supporting industry products;

d) Promoting trade; organizing trade fairs and exhibitions;

e) Promoting domestic and foreign investment to boost supporting industry activities.

2. Supporting Industry Development Centers shall be built with the following conditions met:

a) Technical infrastructure, testing and trial production equipment, and a professional management team meeting the requirements for supporting industry development;

b) A team of experts advising on technology, intellectual property, and business management for supporting industries;

c) The ability to link with production, research, and training institutions both domestically and internationally to serve supporting industry activities.

Article 10. Support Industry Development Program

1. Objectives:

Support organizations and individuals to enhance their capacity in activities related to support industry development.

a) Enhance enterprise capacity: Enterprise management; production management; create linkages and connections between enterprises producing support industry products and customers, becoming suppliers of products for multinational corporations and other support industry manufacturers both domestically and internationally; promote and support markets for the consumption of support industry products;

b) Support training of human resources to meet the requirements of industries producing support industry products;

c) Support research and development, application, transfer, and innovation of technology in the experimental production of components, spare parts, and materials;

d) Disseminate awareness and provide information on policies, markets, and capabilities of Vietnam's support industries through forms such as organizing seminars, publishing newsletters, publications, and promoting on various mass media;

đ) International cooperation in support industry development; promote foreign investment attraction in the support industry sector;

e) Support the establishment of technical standards and regulations for support industry products included in the priority support industry product list, harmonizing with international and regional standards;

g) Establish and update databases on domestic and international support industries on specialized websites for support industries.

3. Funding:

a) Sources of funding for the Support Industry Development Program:

- State budget funds provided according to current budget allocation levels;

- Funding from organizations and individuals implementing support industry development activities;

- Sponsorship and contributions from organizations and individuals both domestically and internationally;

- Other lawful sources of capital as prescribed by law.

b) Plan and Budget Estimate:

- The Ministry of Industry and Trade shall prepare and consolidate the annual budget estimate of the Ministry of Industry and Trade to be submitted to the Ministry of Finance, the Ministry of Planning and Investment, and relevant units as prescribed;

- Provincial People's Committees and municipal people's committees under the central government shall prepare and consolidate the annual budget estimate of their respective localities, to be submitted to competent authorities for approval as prescribed.

4. The Prime Minister shall specify detailed regulations on the establishment, management, and implementation of the Support Industry Development Program.

Chapter III
INCENTIVE POLICIES FOR SUPPORT INDUSTRIES

1. Eligible Recipients:

Production projects of support industry products listed in the Priority Support Industry Product List: Including new investment projects, expansion projects, and technological innovation projects applying new equipment and production processes, increasing production capacity by at least 20%.

2. Procedures for Incentive Confirmation:

a) Small and medium-sized enterprises' production projects of support industry products listed in the Priority Support Industry Product List may submit applications for confirmation to the competent authority of the locality where the project is located or the Ministry of Industry and Trade to obtain confirmation. The competent authority of the locality sends the Decision confirming incentives to the Ministry of Industry and Trade;

b) All other entities not covered by the above provisions shall submit applications for confirmation to the Ministry of Industry and Trade.

3. Timeframe for Incentive Confirmation:

a) Based on the application for incentive confirmation submitted by the enterprise, the confirming authority shall notify the result to the enterprise within thirty working days;

b) If the application lacks sufficient grounds to confirm eligibility for incentives, the confirming authority must notify the organization or individual concerned in writing within five working days from the date of receipt of the application to supplement the application; once the supplementary application is complete, the confirming authority must issue a notification of the incentive review result no later than thirty working days from the date of receipt of the completed supplementary application.

4. Post-Incentive Review:

Production projects of support industry products listed in the priority development list but failing to meet the conditions for incentives will have their incentives revoked and compensation for previously enjoyed incentives.

5. The Ministry of Industry and Trade shall specify detailed procedures for incentive applications and post-incentive reviews.

1. General preferential measures:

a) Corporate income tax:

Shall be entitled to tax incentives as prescribed in Law No. 71/2014/QH13 dated November 26, 2014 amending and supplementing certain provisions of laws on taxes.

b) Import tax:

Shall be exempted from import duties on goods imported for fixed asset formation in accordance with the provisions of the Law on Export Duties and Import Duties and guiding documents.

c) Credit:

- Projects producing industrial support products listed in the Priority Development Catalogue shall borrow at preferential investment credit interest rates from state investment credit sources;

- Shall be entitled to short-term loans in Vietnamese dong from credit institutions and foreign bank branches at interest rates not exceeding the ceiling set by the State Bank for each period.

d) Value-added tax:

Revenue from industrial support products listed in the Priority Development Catalogue may choose to declare value-added tax monthly, annually, or quarterly provisional declarations. The Ministry of Finance shall provide detailed guidance on this point.

đ) Environmental protection:

Projects producing industrial support products listed in the Priority Development Catalogue shall borrow at preferential interest rates from the Vietnam Environment Protection Fund for pollution control and environmental protection components of the project.

2. Preferential measures for small and medium-sized enterprises:

In addition to the general preferential measures stipulated in Clause 1 of this Article, small and medium-sized enterprises producing industrial support products listed in the Priority Development Catalogue shall also enjoy the following preferential measures:

a) Investment credit:

Shall be entitled to borrow up to 70% of the investment capital from credit institutions based on guarantees provided by credit guarantee organizations for small and medium-sized enterprises in accordance with regulations when meeting the following conditions:

- Having collateral or pledged assets valued at least 15% of the loan amount at credit institutions in accordance with the law, excluding the value of collateral or pledged assets for other loans;

- Having at least 20% of equity participating in the investment project, after deducting the equity invested in other projects;

- At the time of requesting a guarantee, having no overdue obligations to the state budget, bad debts at credit institutions or economic organizations.

b) Land and water rental fees:

- Shall be exempted or reduced from land and water rental fees in accordance with the law on land;

- In cases where the project has special characteristics or large scale, providing significant socio-economic benefits requiring higher support than the level specified above, the Ministry of Finance shall coordinate with the Ministry of Planning and Investment to submit to the Prime Minister for decision based on the proposal of the provincial People's Committee in accordance with the law on land.

3. Investment projects producing industrial support products listed in the Priority Development Catalogue located in areas with difficult socio-economic conditions or extremely difficult socio-economic conditions, in addition to the general preferential measures stipulated in Clause 1 of this Article, shall also enjoy investment incentives specific to those areas.

Article 13. Management of Preferential Policies

1. If the subjects benefiting from the preferential policies under this Decree make false declarations and misuse such policies for purposes other than intended, they shall have their benefits revoked.

2. In cases where a subject enjoys multiple preferential policies of the same type, they shall only be entitled to the highest level of benefit as stipulated by current regulations.

3. Ministries, sectors, and People's Committees of provinces and centrally governed cities shall, within their respective functions and authorities, be responsible for directing inspections, audits, and decisions to revoke preferential benefits.

Chapter IV
IMPLEMENTATION

1. The Ministry of Industry and Trade shall take the lead in performing state management functions over the development of supporting industries according to the following contents:

a) Drafting and submitting to competent authorities for promulgation, or promulgating within its authority, legal normative documents on the development of supporting industries;

b) Taking the lead in drafting plans and budgets for implementing the program to develop supporting industries and consolidating budget estimates in the five-year socio-economic development plan and annual plans of the Ministry of Industry and Trade;

c) Reviewing and updating the list of priority products for developing supporting industries in accordance with actual conditions at each period, and submitting it to the Government for approval;

d) Drafting and submitting to the Prime Minister for approval the Regulation on the establishment, management, and implementation of the Program to Develop Supporting Industries;

đ) Approving the Project to reorganize existing units of the Ministry of Industry and Trade to form a Center for Developing Supporting Industries;

e) Taking the lead and coordinating with the Ministry of Science and Technology to draft and promulgate national technical standards, and to draft and propose the Ministry of Science and Technology to publish national standards on raw materials, materials, components, and spare parts that meet international standards;

g) Taking the lead and coordinating with relevant ministries, sectors, and localities to guide and resolve issues related to the development of supporting industries;

h) Cooperating with organizations and individuals both domestically and internationally to attract capital, investment, and resources to support the development of supporting industries;

i) Guiding the confirmation of benefits and post-benefit inspection procedures;

k) Taking the lead and coordinating with the Ministry of Finance to draft Circulars guiding the preparation, management, and use of funds for the Program to Develop Supporting Industries;

l) Taking the lead and coordinating with relevant ministries, sectors, and provincial People's Committees to inspect, audit, and decide to revoke preferential policies;

2. The Ministry of Finance shall be responsible for:

a) Taking the lead in allocating public expenditure funds to implement the Program to Develop Supporting Industries in accordance with the State Budget Law, and guiding the preparation, management, and use of funds for the Program to Develop Supporting Industries;

b) Supplementing detailed guidance on tax preferential policies for the development of supporting industry products within its authority;

c) Guiding or promulgating within its authority procedures for entities eligible for state investment credit loans to ensure simple and clear procedures for the Vietnam Development Bank to implement;

d) Coordinating with the Ministry of Industry and Trade to guide, inspect, and supervise the use of funds for implementing the Program to Develop Supporting Industries;

đ) Taking the lead in guiding the declaration of value-added tax as prescribed in Point d Clause 1 Article 12 of this Decree;

3. The State Bank of Vietnam shall be responsible:

a) Coordinating with the Ministry of Finance and the Ministry of Industry and Trade to provide specific guidance on the implementation of credit policies as stipulated in Article 12 of this Decree, ensuring quick, simple, and safe loan procedures;

b) Coordinating with relevant ministries, sectors, and localities to inspect, supervise the implementation of credit policies, resolve emerging difficulties, and propose measures to address them during the implementation process;

4. The Ministry of Planning and Investment shall be responsible for:

a) Taking the lead in allocating investment capital to implement the Program to Develop Supporting Industries in accordance with the State Budget Law, and calling for Official Development Assistance (ODA) funds to build Centers for Developing Supporting Industries in accordance with the law;

b) Taking the lead and coordinating with relevant ministries and sectors to formulate policies to encourage foreign investors to use domestically produced supporting industry products;

5. The Ministry of Natural Resources and Environment shall be responsible for:

a) Coordinating with the Ministry of Finance and relevant ministries and sectors to review, study, and propose supplementary preferential policies regarding land and the environment for projects producing supporting industry products listed in the Priority List for Developing Supporting Industries;

b) Supplementing provisions guiding the implementation of preferential mechanisms and repayment for Projects producing supporting industry products listed in the Priority List for Developing Supporting Industries that are invested in industrial zones through lease agreements with infrastructure provided by the zone developer who has paid land rent to the State;

6. The Ministry of Labor, Invalids, and Social Affairs shall be responsible for:

a) Taking the lead and coordinating with relevant ministries and sectors to review, amend, and supplement current regulations concerning foreign experts and highly skilled foreign workers directly participating in the development of supporting industries, simplifying work permit procedures;

b) Coordinating with the Ministry of Industry and Trade in training to improve the skills of workers directly involved in the supporting industry sector;

7. Ministries, ministerial-level agencies, and government agencies within their respective duties and powers shall be responsible for coordinating with the Ministry of Industry and Trade in performing state management functions over the development of supporting industries as prescribed.

Provincial People's Committees and People's Committees of centrally governed cities shall perform state management functions over the development of supporting industries and shall be responsible for:

1. Drafting, amending, and promulgating policies, legal normative documents on the development of supporting industries and assistance for the development of supporting industries in accordance with the law and local conditions.

2. Drafting, approving, and organizing the implementation of the Program to Develop Supporting Industries in their locality.

5. Promote and attract capital sources for the local supporting industry development program.

Chapter V
IMPLEMENTING PROVISIONS

Article 16. Transitional Provisions

Projects currently producing products listed in the priority supporting industry product catalog continue to enjoy existing preferential treatments and will also benefit from new preferential treatments as stipulated in this Decree.

Article 17. Effective Date

This Decree takes effect from January 1, 2016 and revokes Decision No. 12/2011/QĐ-TTg dated February 24, 2011 on policies for developing certain supporting industries and Decision No. 1483/QĐ-TTg dated August 26, 2011 on the issuance of the priority supporting industry product catalog by the Prime Minister and related documents.

Article 18. Responsibility for Implementation

1. The Ministry of Industry and Trade shall be responsible for coordinating with relevant ministries, sectors, provincial People's Committees, and municipal People's Committees under the central government to implement this Decree, report to the Prime Minister on the implementation status and any emerging issues requiring resolution.

2. Ministers, heads of ministerial-level agencies, heads of governmental agencies, and chairpersons of provincial and municipal People's Committees directly under the central government are responsible for enforcing this Decree./.

 

 

ANNEX

LIST OF PRODUCTS

SUPPORTING INDUSTRIES FOR DEVELOPMENT
(Annexed to Decree No. 111/2015/NĐ-CP dated November 3, 2015 of the Government)

I. TEXTILE - GARMENT INDUSTRY:

- Natural fibers: Cotton, ramie, hemp, silk;

- Synthetic fibers: PE, Viscose;

- Knitting yarns, weaving yarns; high-strength polyester yarns, high-strength Spandex yarns, high-strength nylon yarns;

- Fabrics: Technical fabrics, non-woven fabrics, knitted fabrics, woven fabrics;

- Sewing threads in the garment industry;

- Chemicals, auxiliaries, dyes for the final dyeing of fabrics;

- Garment accessories: Buttons, zippers, elastic bands;

II. LEATHER - SHOE INDUSTRY:

- Leather;

- Artificial leather;

- Shoe soles, shoe heels, shoelaces;

- Leather chemicals;

- Salted leather;

- Shoe sewing threads;

- Shoe glue, decorative accessories such as buckles, rings, hooks...;

III. ELECTRONICS INDUSTRY:

- Basic electronic-optoelectronic components: Transistors, integrated circuits, sensors, resistors, capacitors, diodes, antennas, thyristors;

- Quartz components;

- Microchips;

- Materials for manufacturing electronic components: Semiconductors, hard magnetic materials, soft magnetic materials, positive dielectric materials;

- Electronic product components: Plastic components, rubber components, electromechanical parts, glass components;

- Laptop batteries, mobile phone batteries;

- Electrical wires and cables, LED lights, telephone earphones and speakers;

- Mobile phone chargers;

- Various types of screens;

IV. AUTOMOTIVE MANUFACTURING AND ASSEMBLING INDUSTRY:

- Engine parts and components: Engine body, pistons, crankshafts, connecting rods, gears, exhaust pipe assemblies, cylinders, cylinder head assemblies, camshafts, pistons, engine valves;

- Lubrication system: Oil filters, coolers, radiators, oil pumps, various types of valves;

- Cooling system: Radiators, water tanks, fans, thermostats, water pumps;

- Fuel supply system: Fuel tanks, fuel filters, air filters, fuel pump hoses, carburetors, fuel injection systems;

- Vehicle chassis, body, doors: Sheet metal stampings, painted parts, truck bodies, running boards, door assemblies;

- Suspension system: Leaf springs, coil springs, shock absorbers;

- Wheels: Tires, aluminum alloy rims;

- Power transmission system: Clutches, gearboxes, drive shafts;

- Steering system;

- Braking system;

- Electrical-electronic components:

+ Power sources: Batteries, generators;

+ Ignition equipment: Spark plugs, high voltage transformers;

+ Starter relays, electric motor starters;

+ Wires, connectors, fuses, various types of sensors, automatic control devices, processors;

- Lighting and signaling systems: Lights, horns, gauges;

- Exhaust gas treatment systems for automobiles;

- Automotive plastic components;

- Rubber components, vibration dampers;

- Windshields, wipers, car seats;

V. MECHANICAL ENGINEERING INDUSTRY:

- Molds and fixtures: Stamping molds, casting molds, machining fixtures, inspection fixtures;

- Tools and cutting tools: Turning tools, milling cutters, drill bits;

- Components and spare parts for mechanical processing machines, welding machines;

- Components and spare parts for power machinery, agricultural machinery, shipbuilding;

- Components and spare parts for machines and equipment for processing forestry, aquaculture, and salt products;

- Measuring and testing tools used in mechanical engineering: Calipers, three-dimensional measuring machines, metal composition analyzers, ultrasonic weld testers;

- Machine parts: High-strength bolts, high-strength screws, ball bearings, bushings, gears, valves, couplings, machine housings, stamped parts, speed reducers, hydraulic cylinders;

- Steel for manufacturing.

VI. PRODUCTS FOR HIGH TECHNOLOGY INDUSTRIES

- Various types of molds: High-precision molds, high-precision plastic molds;

- High-quality standard mechanical parts: High-precision nuts, bolts, screws used in electronic, electromechanical, medical electronic, industrial robot equipment;

- Various types of electronic components, microelectronic circuits for developing devices: Peripheral devices, computers, household electronics, audiovisual equipment, solar panels; various types of microprocessors; controllers (Programmable Logic Controllers PLC, Computer Numerical Control controllers, etc.);

- Component sets and spare parts for production equipment generating electricity from new and renewable energy sources;

- High-quality plastic parts: Precise drive components, high durability and long-lasting parts resistant to heat and wear;

- Various types of sensors: Gas sensors, acceleration sensors, magnetic field sensors; biological sensors, temperature sensors, humidity sensors, light sensors, pressure sensors...;

- New generation motors: Electric motors, permanent magnet motors, servo motors (stepper motors), reluctance motors, linear motors;

- High-precision actuator mechanisms./.