Decision No. 217/2005/QĐ-TTg On the issuance of the Regulation on the organization and operation of the international border economic zone of Bờ Y, Kon Tum province

DECISION OF THE PRIME MINISTER

Regarding the issuance of the Regulation on organization and operation

of the International Border Economic Zone Bo Y, Kon Tum Province

PRIME MINISTER

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

Pursuant to Decision No. 06/QĐ-TTg dated January 5, 1999 of the Prime Minister approving the project on developing the economy and society in the border area of Bo Y and Decision No. 53/2001/QĐ-TTg dated April 19, 2001 of the Prime Minister on policies for the Border Economic Zone at the border;

Considering the proposal of the Chairman of the People's Committee of Kon Tum Province in Document No. 11/TT-UB dated March 22, 2005, the Ministry of Planning and Investment in Document No. 4606/BKH-QLKTTW dated July 12, 2005, and the opinions of relevant ministries and sectors,

DECISION:

Article 1. This Decision promulgates the Regulation on organization and operation of the International Border Economic Zone Bo Y, Kon Tum Province.

Article 2. This Decision takes effect fifteen days from the date of publication in the Official Gazette.

Article 3. The Ministers of the Ministries of Planning and Investment, Finance, Home Affairs, Foreign Affairs, National Defense, Public Security, Transport, Commerce, Natural Resources and Environment, the Director General of the Vietnam National Administration of Tourism, the Director of the Management Board of the International Border Economic Zone Bo Y, the Heads of relevant agencies, and the Chairman of the People's Committee of Kon Tum Province shall be responsible for implementing this Decision.

 

REGULATIONS

ORGANIZATION AND OPERATIONS OF THE BORDER ECONOMIC ZONE
INTERNATIONAL BORDER BO Y

(Pursuant to Decision No. 217/2005/QĐ-TTg
dated September 5, 2005 of the Prime Minister)

PART I
GENERAL PROVISIONS

Article 1. This Regulation stipulates activities, certain policies, and state management organization for the International Border Economic Zone Bo Y; rights and obligations of domestic and foreign organizations and individuals engaged in investment, trading goods and services, and constructing infrastructure within this Border Economic Zone.

Article 2. The International Border Economic Zone Bo Y is a defined geographic area within the national territory and sovereignty, comprising functional zones with the most favorable investment and business environment according to current regulations, including socio-economic infrastructure and management policies that facilitate business activities consistent with market mechanisms.

The International Border Economic Zone Bo Y has an area of 68,570 hectares, including the communes of Sala Long, Bo Y, Dak Su, Dak Nong, Dak Duc and the town of Plei Kan in Ngoc Hoi district, Kon Tum province, with boundaries as follows:

- North borders Dak Glei district;

- South borders Sa Thay district;

- East borders Dak To district and commune of Dak Ang (Ngoc Hoi district);

- West borders Laos and Cambodia (shares a border with Laos for 30km and with Cambodia for 25km).

Article 3. Main objectives for development of the International Border Economic Zone Bo Y:

1. Building and developing the International Border Economic Zone Bo Y into a dynamic region and a center for linkage along the East-West economic corridor in the three-country development triangle of Vietnam-Laos-Cambodia.

2. Developing the Central Area and the International Border Economic Zone Bo Y into a border city, effectively utilizing geographical, political, economic, cultural, and social conditions during international economic exchanges to promote economic development and enhance the spillover effects of the International Border Economic Zone Bo Y on the three-country development triangle of Vietnam-Laos-Cambodia during integration.

3. Promoting rural and border area development while minimizing negative impacts on the ecological, cultural, social, ethnic, and national security and defense environments based on creating numerous job opportunities, promoting education and training, and improving the quality of human resources.

4. Creating conditions to protect territorial sovereignty and national border security, effectively addressing social issues, improving the material and spiritual lives of the people, ensuring ethnic unity, and strengthening friendly cooperative relations with neighboring countries.

Article 4. The Government of the Socialist Republic of Vietnam encourages and protects domestic organizations and individuals from all economic sectors, overseas Vietnamese, and foreign investors participating in business operations in the International Border Economic Zone Bo Y in areas such as import and export, temporary import for re-export, transit cargo transport in accordance with the Agreement on Transit Cargo Transport, bonded warehouses, duty-free shops, trade fairs, product showcase stores, production and processing facilities for imported and exported goods, representative offices, domestic and foreign companies, border markets, infrastructure investment, tourism, financial and banking services, etc., in accordance with Vietnamese laws and international treaties to which Vietnam is a party.

Article 5. Domestic economic organizations, households, individuals, overseas Vietnamese; foreign organizations and individuals, enterprises with foreign investment capital, parties involved in joint venture contracts under the Law on Foreign Investment of Vietnam may establish and operate in the International Border Economic Zone Bo Y, subject to the adjustments and benefits provided for in this Regulation, other provisions of Vietnamese law, and international treaties to which Vietnam is a party.

Article 6. In addition to the above benefits, businesses operating in the International Border Economic Zone Bo Y also enjoy the following additional benefits:

1. Using infrastructure and public utility works without payment and paying for services provided by business entities according to a set price.

2. Being able to transfer land use rights and assets attached to the land within the lease period or sublease period according to the provisions of the law, consistent with the initial purpose of the project. In cases where there is a change in the initial investment purpose of the project, the transfer of land use rights and assets attached to the land can only be carried out after approval by the competent authority.

3. Being able to mortgage the value of land use rights and assets attached to the land within the lease period or sublease period at credit institutions operating in Vietnam and foreign credit institutions according to the provisions of the law.

Article 7. The International Border Economic Zone Bo Y will be developed primarily through the following sources of capital:

- Central State budget capital supporting investment in essential infrastructure projects of the Bo Y International Border Economic Zone;

- State development credit capital;

- Capital from domestic enterprises and residents;

- Capital from financial institutions, capital from foreign organizations and individuals;

- Issuing government bonds for large-scale infrastructure construction projects that play a significant role in the development of the border economic zone, in accordance with regulations on issuing government bonds to raise investment capital;

- Utilizing land funds to invest in infrastructure construction.

Infrastructure economic and social projects of the Bo Y International Border Economic Zone shall be included in the list of projects calling for official development assistance (ODA) funding.

PART II
ACTIVITIES OF THE BORDER ECONOMIC ZONE

INTERNATIONAL BORDER BO Y

Article 8. Exit, entry, residence, temporary stay at the Bo Y International Border Economic Zone.

1. Exit, entry of citizens of Laos and Cambodia in the Triangular Development Area of Vietnam-Laos-Cambodia:

Citizens of the Lao People's Democratic Republic (hereinafter referred to as Lao citizens) and citizens of the Kingdom of Cambodia (hereinafter referred to as Cambodian citizens) residing in provinces within the triangular development area of Vietnam-Laos-Cambodia may cross into the Bo Y International Border Economic Zone with border crossing certificates issued by competent authorities of Laos and Cambodia. The permitted temporary stay period in the Bo Y International Border Economic Zone shall not exceed 15 days.

2. Exit, entry, residence, temporary stay at the Bo Y International Border Economic Zone.

- Foreign nationals and overseas Vietnamese holding foreign passports entering to explore the market, work, engage in investment and business activities in the Bo Y International Border Economic Zone and their family members shall be granted multiple-entry exit and entry visas. In cases where they enter for work and investment purposes, they will be considered for issuance of temporary residence cards, with the maximum validity period of the temporary residence card being three years.

- The Ministry of Public Security shall guide the Bo Y International Border Economic Zone Police in implementing management of exit, entry, residence, and temporary stay in the Bo Y International Border Economic Zone.

Article 9. The central state budget provides targeted support in the annual budget plan to concentrate investment in rapidly developing infrastructure in the Bo Y International Border Economic Zone (within the project timeframe). In addition to central state budget capital, other economic sectors' capital sources, as well as official development assistance (ODA) capital, will also be mobilized to develop infrastructure.

Article 10. Investment, credit, land, and labor in the Bo Y International Border Economic Zone:

1. Business investment projects in the Ecotourism Zone within the Bo Y International Border Economic Zone shall enjoy investment incentives under Decree No. 51/1999/ND-CP dated July 8, 1999, detailing the implementation of the Law on Encouraging Domestic Investment.

2. Enterprises belonging to various economic components investing, producing, and operating in the Bo Y International Border Economic Zone shall be eligible for consideration for state development credit loans from the Development Support Fund according to current regulations of the Government of Vietnam on state development credit.

3. Organizations and individuals engaged in production, trade, services, foreign-invested enterprises, and those participating in joint venture contracts operating within the Bo Y International Border Economic Zone, after settling accounts with tax authorities and suffering losses, may carry forward such losses to the next year, which can be deducted from taxable income. The carry-forward period shall not exceed five years.

4. Organizations and individuals with investment projects in the Bo Y International Border Economic Zone shall be exempt from land rental fees for the first eleven years, starting from the date of signing the land lease contract, and shall enjoy a land rental rate of 30% of the land rental rate applicable to mountainous districts of Kon Tum Province from the twelfth year onwards.

5. Organizations and individuals who call for investment capital from non-state budget sources to invest in economic and social projects in the Bo Y International Border Economic Zone shall be entitled to a certain amount of bonus from local budgets, as stipulated by the Ministry of Finance, after the investment project commences operations and produces goods circulating in both domestic and international markets.

CHAPTER III
ACTIVITIES OF THE COMMERCIAL AND INDUSTRIAL ZONES BELONGING TO THE BO Y INTERNATIONAL BORDER ECONOMIC ZONE

 

Article 11. The Bo Y International Border Economic Zone includes: Commercial and Industrial Zones, Administrative Management Zone, Border Control Management and Supervision Zone, Urban and Residential Zone, Tourism and Service Zone, Agricultural and Forestry Development Zone. The scale and location of each zone are determined in the overall and detailed planning of the Bo Y International Border Economic Zone.

The Commercial and Industrial Zone within the Bo Y International Border Economic Zone (hereinafter referred to as the Commercial and Industrial Zone) is separated from other functional zones within the Bo Y International Border Economic Zone and inland areas by a hard fence system with gates and entrances, ensuring control over people, goods, and transportation means by relevant authorities.

There are no permanent residents (including foreigners) in the Commercial and Industrial Zone.

Article 12. Import and export of goods and services in the Commercial and Industrial Zone:

- The exchange of goods and services between the Commercial and Industrial Zone and other functional zones within the border economic zone and inland areas is treated as export and import transactions and must comply with Vietnam's laws on export and import; customs procedures must be carried out in accordance with Vietnam's customs laws. The exchange of goods and services between the Commercial and Industrial Zone and foreign countries is treated as exchanges between foreign countries.

- Economic organizations operating in the Commercial and Industrial Zone may export all goods and services to foreign countries and import all goods and services from foreign countries that are not prohibited by Vietnamese law.

- Economic organizations and individuals within the border economic zone and inland areas may only import goods and services from the Commercial and Industrial Zone that are not prohibited for import by Vietnam, and export goods and services to the Commercial and Industrial Zone that are not prohibited for export by Vietnam.

- Goods and services imported from abroad into the Trade and Industrial Zone or exported from the Trade and Industrial Zone to abroad are exempted from import tax and export tax.

- Goods and services imported from abroad into the Trade and Industrial Zone are not subject to value-added tax.

- Goods and services within the Trade and Industrial Zone; goods and services imported from abroad into the Trade and Industrial Zone that are not subject to value-added tax; goods and services from other functional zones within the Border Economic Zone and from domestic areas brought into the Trade and Industrial Zone enjoy a zero percent value-added tax rate; goods and services from the Trade and Industrial Zone brought into other functional zones within the Border Economic Zone and into the domestic area of Vietnam must be subject to value-added tax according to current laws.

- Goods and services subject to special consumption tax produced, consumed in the Trade and Industrial Zone and goods and services subject to special consumption tax imported from abroad and from the domestic area of Vietnam into the Trade and Industrial Zone are not subject to special consumption tax, except for automobiles subject to special consumption tax.

- Goods and services subject to special consumption tax from the Trade and Industrial Zone exported to abroad are not subject to special consumption tax.

- Goods and services subject to special consumption tax from the Trade and Industrial Zone brought into the domestic area of Vietnam must be subject to special consumption tax.

- Goods manufactured, processed, recycled, assembled at the Trade and Industrial Zone using imported raw materials and components from abroad according to current regulations on import management; when imported into the domestic area of Vietnam, only import tax must be paid for the portion of raw materials and components constituting the product or goods. In cases where imported raw materials and components from abroad are not used when imported into the domestic area of Vietnam, no import tax needs to be paid.

Article 13. Investment in the Trade and Industrial Zone

- Foreign direct investment projects in the Trade and Industrial Zone are accepted through the registration process for investment license issuance. Domestic investment projects are considered and approved according to current regulations with the simplest procedures.

All investment projects in the Trade and Industrial Zone enjoy maximum incentives applicable to areas with particularly difficult socio-economic conditions according to the Law on Foreign Investment in Vietnam dated November 12, 1996; the Law Amending and Supplementing Certain Provisions of the Law on Foreign Investment in Vietnam dated June 9, 2000; the Law Encouraging Domestic Investment (Amended) dated May 20, 1998; the Enterprise Income Tax Law; the Value-Added Tax Law; and other incentives according to international treaties, multilateral or bilateral trade contracts that Vietnam has signed or joined.

- Investment projects in the Trade and Industrial Zone are exempted from enterprise income tax for four years from the time they start generating taxable income, and are granted a 50% reduction in the amount of enterprise income tax payable for nine consecutive years thereafter; they are subject to an enterprise income tax rate of 10% for fifteen years from the date the investment project begins operations.

- Investment projects constructing new production lines, expanding scale, updating technology, improving ecological environment, and enhancing production capacity are exempted from enterprise income tax for up to four years for additional income generated by the investment and granted a 50% reduction in the amount of tax payable for up to seven consecutive years thereafter.

- Where legal regulatory documents provide different levels of incentives for the same issue, the incentive level provided in the document with higher legal validity shall apply.

- Where legal regulatory documents issued by the same authority provide different provisions on the same issue, the provision of the document issued later shall apply.

Article 14. For domestic and foreign tourists entering the Trade and Industrial Zone mentioned in Article 8 of this Regulation, they are permitted to purchase duty-free imported goods to bring back to the domestic area up to 500,000 VND/person/day.

PART IV
STATE MANAGEMENT OF THE ECONOMIC ZONE
INTERNATIONAL BORDER BO Y

Article 15. Establishment of the Management Board of the International Border Economic Zone Bo Y

1. The Management Board of the International Border Economic Zone Bo Y is established under the Prime Minister.

2. The Management Board of the International Border Economic Zone Bo Y is the state management agency directly responsible for the International Border Economic Zone Bo Y, assisting the Prime Minister in directing the implementation of construction and development of the International Border Economic Zone Bo Y according to the planning, schedule, and progress approved by competent state authorities and according to the operational regulations aimed at centralized and unified management of all activities across all sectors of investment, economic, cultural, and social development in the International Border Economic Zone Bo Y.

3. The Management Board of the International Border Economic Zone Bo Y has legal personality, bears the national emblem seal, has its office location, staffing, and operating budget funded by the state budget, and is the primary planning and budgetary unit balanced with basic construction capital from the state budget.

Article 16. Duties and powers of the Management Board of the International Border Economic Zone Bo Y

The Management Board of the International Border Economic Zone Bo Y performs the following duties and powers:

1. Implementing the overall construction plan already approved by the Prime Minister and studying proposals for adjusting and supplementing the plan; expanding urban areas; developing detailed plans for the development of the International Border Economic Zone Bo Y, submitting them to the Prime Minister or competent authority for approval and organizing their implementation.

2. Developing investment plans, deciding on the annual list of basic construction investment projects belonging to Groups B and C, preparing the Group A list for submission to the Prime Minister or competent authority for approval and organizing their implementation.

3. Issuing, renewing, and revoking business registration certificates, investment permits, representative office establishment permits, branch establishment permits for traders and enterprises both within and outside the country, investment incentive certificates, labor permits, origin certificates for goods, and other certificates according to the authorization of competent state agencies within the International Border Economic Zone Bo Y.

4. The entire area of land and water planned for the development of the International Border Economic Zone Bo Y shall be assigned once to the Management Board for the Management Board to allocate or lease to investors to implement investment projects in accordance with current laws.

5. Establishing and promulgating price frameworks, fees, and charges to be implemented in the International Border Economic Zone Bo Y in accordance with current laws.

6. Serving as the focal point for resolving issues arising during the formation, implementation, and operation of investment, business, and activities in the International Border Economic Zone Bo Y, including BOT, BO, and BTO models.

7. Managing and inspecting the implementation of measures to protect natural resources and the environment in the International Border Economic Zone Bo Y, coordinating or recommending competent authorities to handle violations of regulations on the protection of natural resources and the environment by organizations and individuals operating in the International Border Economic Zone Bo Y.

8. Taking the lead and coordinating with local authorities and relevant agencies to ensure all activities in the International Border Economic Zone Bo Y comply with the operational and organizational regulations of the International Border Economic Zone Bo Y.

9. Implementing management of investment sources, managing the use of construction projects funded by state budget at the International Border Economic Zone Bo Y in accordance with regulations.

10. Organizing, implementing, introducing, negotiating, and promoting domestic and foreign trade, tourism investments.

11. Studying some new economic management mechanisms regarding exit, entry, export, import, international cooperation, ethnic policies to be piloted in the International Border Economic Zone Bo Y.

12. Managing organizational structure, finance, assets, and training. Implementing coordination with relevant state management agencies in inspection, supervision, handling complaints and grievances, and resolving violations in various fields of activity in the International Border Economic Zone Bo Y, combating corruption, waste, and negative practices, ensuring social security and public order.

13. Closely coordinating with the Ministry of National Defense and the Ministry of Public Security to effectively implement projects related to national defense and security.

14. Implementing plans for cooperative support for development among provinces in the Vietnam-Laos-Cambodia growth triangle; coordinating management between provincial governments to ensure that the operations of the International Border Economic Zone Bo Y are consistent with existing agreements and treaties between the Government of the Socialist Republic of Vietnam, the Government of the Lao People's Democratic Republic, and the Government of the Kingdom of Cambodia, as well as agreements among provinces in the Vietnam-Laos-Cambodia growth triangle.

15. Regularly reporting to the Prime Minister, relevant ministries, and the People's Committee of Kon Tum Province on the development situation, planning implementation, and policy execution in the International Border Economic Zone Bo Y.

16. Implementing other tasks assigned by the Prime Minister during each period.

Article 17. Organization of the Management Board of the International Border Economic Zone Bo Y.

1. Leadership of the Board:

The Management Board of the International Border Economic Zone Bo Y has a Director and Deputy Directors. The Director of the Management Board of the International Border Economic Zone Bo Y is appointed by the Prime Minister upon the recommendation of the Minister of Home Affairs.

Deputy Directors are appointed by the Prime Minister upon the recommendation of the Director after consulting with the Minister of Home Affairs.

2. Supporting machinery of the Management Board of the International Border Economic Zone Bo Y includes:

- Main Office located at the center of the International Border Economic Zone;

- Inspection;

- Organizational Training and Cultural Department;

- Planning and Investment Department;

- Corporate Finance Department;

- Natural Resources and Environment Department;

- Industry, Trade, and Tourism Department;

- Management Board of the International Border Control Post Joint Station Bo Y;

- Representative Office of the Management Board of the International Border Economic Zone Bo Y in Hanoi;

- Affiliated public service units.

3. Staffing of the Management Board of the International Border Economic Zone Bo Y:

a) Administrative staffing of the Management Board of the International Border Economic Zone Bo Y is allocated by the Minister of Home Affairs based on the proposal of the Director of the Management Board of the International Border Economic Zone Bo Y;

b) Public service staffing of the Management Board of the International Border Economic Zone Bo Y is decided by the Director according to the delegation level after consulting with the Minister of Home Affairs.

4. Ministries: Commerce, National Defense, Public Security, Construction, Transport, Finance, Planning and Investment, Natural Resources and Environment, General Administration of Tourism, central agencies concerned, and the People's Committee of Kon Tum Province shall authorize and guide the Management Board of the International Border Economic Zone Bo Y to effectively implement the one-stop-shop management mechanism.

Article 18. Responsibilities of the People's Committee of Kon Tum Province

1. The People's Committee of Kon Tum Province shall take the lead and coordinate with the Management Board of the International Border Economic Zone Bo Y to implement ethnic policies, resettlement policies, and social policies, providing employment solutions to ensure the livelihoods of the people and working conditions for workers in the International Border Economic Zone Bo Y.

2. Deciding on the support for vocational training costs for workers to meet the development requirements of the International Border Economic Zone Bo Y and the provinces of Laos and Cambodia in the Vietnam-Laos-Cambodia growth triangle in accordance with current laws.

3. Directing the People's Committees of districts and functional agencies of the Province to coordinate with the Management Board of the International Border Economic Zone Bo Y to implement measures to ensure social security and public order, creating favorable conditions for business operations, effectively enforcing anti-smuggling, commercial fraud, and other illegal activities in the province related to the operations of the International Border Economic Zone Bo Y.

4. To agree in writing with the authorities of the provinces in the three-country development triangle of Vietnam, Laos, and Cambodia on the principles of cooperation, support, and coordination in managing the operations of the International Border Economic Zone Bo Y based on the current laws of each country and consistent with the development of cooperative relations among countries in the region.

Article 19. Responsibilities of Ministries and sectors in state management at the International Border Economic Zone Bo Y

Relevant Ministries and sectors shall perform their state management functions over the International Border Economic Zone Bo Y and delegate to the Management Board of the International Border Economic Zone Bo Y the implementation of functions and tasks within their jurisdiction concerning economic development, investment, construction, planning, natural resource and environmental management, urban management and development, labor management, import and export, and other areas as prescribed by law and this Regulation.

For areas not delegated to the Management Board of the International Border Economic Zone Bo Y, central Ministries and sectors and the People's Committee of Kon Tum Province shall carry out state management functions by appointing representatives or establishing permanent offices at the International Border Economic Zone Bo Y to enforce their duties according to their authority, thereby facilitating the activities of investors and businesses.

CHAPTER V
IMPLEMENTING PROVISIONS

Article 20. Other provisions related to the activities of organizations and individuals in the International Border Economic Zone Bo Y that are not specified in this Regulation shall be implemented in accordance with corresponding articles of the Commercial Law, Law on Foreign Investment in Vietnam, Law on Encouragement of Domestic Investment, Enterprise Law, Land Law, other legal documents, and international treaties to which Vietnam is a party.

When new preferential mechanisms and policies are issued that are more favorable for the activities of the border economic zone, they shall apply to the International Border Economic Zone Bo Y./.