Decree No. 192-CP on the issuance of the Industrial Zone Regulation

DECREE

Of the Government Decision No. 192-CP dated December 28, 1994 on promulgating the Industrial Zone Regulation

THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;

Pursuant to the Law on Encouraging Domestic Investment dated June 22, 1994;

Pursuant to the Enterprise Law dated December 21, 1990 amended by the Law Amending Certain Articles of the Enterprise Law dated June 22, 1994;

Pursuant to the Law on Private Enterprises dated December 21, 1990 amended by the Law Amending Certain Articles of the Law on Private Enterprises dated June 22, 1994;

Pursuant to the Law on Foreign Investment in Vietnam dated December 29, 1987 amended and supplemented by the Laws Amending and Supplementing Certain Articles of the Law on Foreign Investment in Vietnam dated June 30, 1990; the Law Amending and Supplementing Certain Articles of the Law on Foreign Investment in Vietnam dated December 23, 1992 (hereinafter referred to collectively as the Law on Foreign Investment);

To create favorable conditions for organizations and individuals, both domestic and foreign, to invest in Industrial Zones;

At the proposal of the Minister, Chairman of the State Committee for Cooperation and Investment, the Minister of Justice.

DECREE:

Article 1. The Industrial Zone Regulation is hereby promulgated together with this Decree.

Article 2. This Decree shall take effect from January 1, 1995.

Article 3.

Ministers of Ministries, Heads of agencies at ministerial level, and heads of agencies under the Government related to this matter are responsible for providing detailed guidance on the implementation of the Regulation promulgated together with this Decree.

Article 4. Ministers of Ministries, Heads of agencies at ministerial level, and heads of agencies under the Government, Chairmen of People's Committees of provinces and centrally governed cities, and Heads of central bodies of mass organizations are responsible for implementing this Decree.

REGULATIONS

INDUSTRIAL PARK

(Promulgated together with Government Decree No. 192-CP dated December 28, 1994)

Chapter 1:

GENERAL PROVISIONS

Article 1. The Government of Vietnam welcomes and encourages organizations and individuals, both domestic and foreign, to invest in Industrial Zones based on this Regulation and relevant laws of Vietnam.

Article 2. The Industrial Zone referred to in this Regulation is a concentrated Industrial Zone established by the Government decision, having defined geographical boundaries, specializing in industrial production and providing supporting services for industrial production, without residential population.

Article 3.

1. In the Industrial Zone, there are the following types of enterprises:

a) Vietnamese enterprises belonging to all economic sectors.

b) Joint ventures with foreign capital.

2. In the Industrial Zone, there may be Export Processing Zones and Export Processing Enterprises.

Article 4. Within the Industrial Zone, investors are allowed to invest in the following areas:

1. Construction and operation of infrastructure projects;

2. Production, processing, assembly of industrial products for export and domestic consumption;

3. Services supporting industrial production.

Chapter 2:

 INDUSTRIAL ZONE ENTERPRISES

Article 5. An Industrial Zone enterprise is an enterprise or joint venture mentioned in Article 3 of this Regulation, established and operated according to the provisions of the law applicable to each type of enterprise.

Article 6. Industrial Zone enterprises have the following rights:

1. Lease land within the Industrial Zone to build factories and architectural works serving production and business activities;

2. Use infrastructure facilities, public utilities, and services within the Industrial Zone upon payment;

3. Organize production and business activities in accordance with the Enterprise License, Contract, and Charter;

4. Engage in direct import and export activities in accordance with the law;

5. Lease public utilities, transportation means, and services outside the Industrial Zone.

Article 7. Industrial Zone enterprises have the following obligations:

1. Comply with the law, the Industrial Zone Regulation, the Charter of the Industrial Zone, and the Enterprise License;

2. Register with the Industrial Zone Management Board the quantity of exported products and those sold in the domestic market;

3. Fulfill financial obligations to the Vietnamese State;

4. Open accounts at banks within the territory of Vietnam;

5. Implement accounting and statistical systems in accordance with Vietnamese law;

6. Implement property insurance and other types of insurance as prescribed by Vietnamese law;

7. Implement measures to ensure workplace safety, industrial hygiene, environmental protection, and fire prevention and explosion control;

8. Implement regulations on maintaining security and public order within the Industrial Zone.

Chapter 3:

CONSTRUCTION AND OPERATION OF INFRASTRUCTURE PROJECTS IN THE INDUSTRIAL ZONE

Article 8. The Government of Vietnam encourages and creates favorable conditions for domestic and foreign companies to establish and operate infrastructure construction and operation companies in Industrial Zones (referred to as Infrastructure Development Companies) in accordance with the law.

Article 9.

1. Infrastructure Development Companies have the following rights:

a) Participate in promoting investment in Industrial Zones based on approved development plans;

b) Lease back land that has been fully developed with infrastructure to enterprises mentioned in Article 3 of this Regulation; lease or sell factories built by the Company within the Industrial Zone;

c) Operate services within the Industrial Zone in accordance with the Company's License and Charter;

d) Set rental prices for land, leasing or selling factories, and service fees with the approval of the Industrial Zone Management Board;

2. Infrastructure Development Companies have the following obligations:

a) Construct infrastructure projects in the Industrial Zone in accordance with approved planning, design, and schedule. If due to force majeure or other justifiable reasons, the Company fails to complete the construction plan as scheduled, it must apply to the competent state agency for an extension at least thirty (30) days before the deadline. If the Company does not apply for an extension or does not obtain permission, the unused land will be reclaimed;

b) Maintain and repair infrastructure projects in the Industrial Zone throughout the Company's operational period;

c) Ensure industrial hygiene, environmental protection within the Industrial Zone under the responsibility of the Company.

Article 10. Construction of factories in the Industrial Zone must comply with construction procedures and standards, ensuring workplace safety, fire prevention and explosion control, and environmental protection.

Article 11. In cases where the construction of factories requires phased land use, the Industrial Zone Enterprise may still be permitted to lease the entire required land area at once, but must have a plan for phased use of the leased area within a maximum period of two (2) years. If, due to force majeure or legitimate reasons, the land use plan cannot be completed, the enterprise must request an extension of land use at least thirty (30) days before the end of the prescribed period. Beyond this period, and if an extension is not granted, the unused portion of the land will be reclaimed.

Chapter 4:

LABOR RELATIONS IN INDUSTRIAL ZONE ENTERPRISES

Article 12. Labor relations in Industrial Zone Enterprises are regulated according to the provisions of the Ministry of Labor of Vietnam dated June 23, 1994, and other relevant legal documents.

Article 13. Vietnamese workers hired by Industrial Zone Enterprises must submit registration forms to the Industrial Zone Management Board.

Article 14. Industrial Zone Enterprises prioritize the employment of Vietnamese workers, first and foremost those from the location of the Industrial Zone. For jobs that Vietnamese workers cannot yet fulfill, the Enterprises may employ foreign workers for a limited time. During this period, the Industrial Zone Enterprises must train Vietnamese workers to take over these positions.

Chapter 5:

 FINANCIAL MANAGEMENT AND FOREIGN EXCHANGE

Article 15. Tax obligations of Industrial Zone Enterprises.

1- Domestic enterprises of all economic sectors fulfill tax obligations at the current preferential rates.

2- Joint venture enterprises with foreign capital investment pay taxes as follows:

a) Pay corporate income tax at the rate of:

- Eighteen percent (18%) of profits for production enterprises; twelve percent (12%) of profits for export enterprises that sell at least eighty percent (80%) of their products. These enterprises are exempt from corporate income tax for two years from the date they start making profits;

- Twenty-two percent (22%) of profits for service enterprises. These enterprises are exempt from corporate income tax for one year from the date they start making profits;

b) Pay other types of taxes as stipulated by current regulations at the time of annual tax payment.

3- Export processing enterprises within Industrial Zones pay taxes according to the Regulations on Export Processing Zones issued together with Decree No. 322-HĐBT dated October 18, 1991 of the Council of Ministers (now the Government).

4- Infrastructure development companies enjoy preferential tax rates as provided by tax laws.

Article 16. Vietnamese banks, joint-stock banks between Vietnam and foreign countries, and branches of foreign banks in Vietnam are authorized to operate in Industrial Zones upon approval by the Governor of the State Bank of Vietnam and consent from the Industrial Zone Management Board.

Article 17. Foreign exchange management in Industrial Zones is carried out in accordance with the regulations of the Vietnamese government.

Chapter 6:

ORGANIZATION AND MANAGEMENT OF INDUSTRIAL ZONES

Article 18.

Industrial Zones and Industrial Zone Management Boards are subject to state management by Ministries, agencies equivalent to Ministries, and agencies under the Government. Depending on the nature of each Industrial Zone, the Prime Minister decides which state agency will directly manage it.
Ministries, agencies equivalent to Ministries, and agencies under the Government delegate some state management tasks in Industrial Zones to the Industrial Zone Management Boards.

Article 19. The People's Committee of the province or centrally governed city where the Industrial Zone is located has the responsibility:

1- To perform state management functions for Industrial Zones within its territorial jurisdiction. For issues beyond their authority, they coordinate with national committees and functional ministries to resolve them;

2- To participate in developing plans for Industrial Zone development;

3- To supervise and inspect compliance with labor safety regulations, environmental protection regulations, fire prevention and explosion control measures, and public security maintenance in Industrial Zones;

4- To create favorable conditions for the management board to fully carry out the tasks specified in Article 20 of this Regulation.

Article 20. The Industrial Zone Management Board is the direct management body for the Industrial Zone, with the following responsibilities and authorities:

1- To develop plans for Industrial Zone development and Industrial Zone Bylaws for approval by competent state authorities;

2- To promote investment in the Industrial Zone;

3- To guide and accept investment application files, transferring them to competent authorities for review and decision-making on issuing permits;

4- To issue construction permits based on approved design documents;

5- To inspect and audit compliance with investment permits, business permits, processing contracts, service supply contracts, and labor law regulations;

6- To implement regulations on security, safety, and public order management in the Industrial Zone;

7- To manage service activities in the Industrial Zone;

8- To examine and approve rental land prices and service fees set by the Infrastructure Development Company and service companies;

9- To mediate labor disputes and economic disputes at the request of the parties involved.

Article 21.

The Management Board consists of a Director, several Deputy Directors, and a support staff, with its own seal.

The Director of the Industrial Zone Management Board is appointed by the Prime Minister upon the recommendation of the Minister and the Head of the Government's Organization and Cadre Affairs Department.

Deputy Directors are appointed by the Chairman of the Provincial or Centrally Governed City People's Committee upon the recommendation of the Director of the Management Board, after consultation with the Minister and the Head of the Government's Organization and Cadre Affairs Department.

The support staff of the Management Board is decided by the Director after obtaining the approval of the Government's Organization and Cadre Affairs Department.

Article 22. The Management Board is a state budget unit. All revenue collected from the Industrial Zone area must be remitted to the state budget. Expenditures for the Management Board's operations are covered by the state budget.

Article 23. 

Criminal cases occurring in the Industrial Zone fall under the jurisdiction of Vietnamese courts.

Civil and economic disputes where one party is an Industrial Zone Enterprise are resolved according to Vietnamese law, except where there are specific provisions.

Chapter 7:

FINAL PROVISIONS

Article 24. Other provisions relating to the activities of Industrial Zone Enterprises not specified in this Regulation shall be applied in accordance with the corresponding provisions of the Law on Foreign Investment in Vietnam, the Law on Encouragement of Domestic Investment, the Enterprise Law, the Law on Private Enterprises, and other relevant legal documents.

Article 25. This Regulation takes effect from January 1, 1995. For Export Processing Zones and Industrial Zones established before the effective date of this Regulation, if there is a request to convert them into Industrial Zones operating under this Regulation, they must be reviewed and decided upon by the Government on a case-by-case basis.