Decision No. 219/1998/QĐ-TTg promulgates the Regulation on the economic and trade encouragement zone of Lao Bao, Quang Tri province.

 

DECISION OF THE PRIME MINISTER

Issuing the Regulation on the Economic and Trade Encouragement Zone of Lao Bao, Quang Tri Province

 ___________________________

 

PRIME MINISTER

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

Pursuant to the Agreement on economic, cultural, scientific and technical cooperation between the Government of the Socialist Republic of Vietnam and the Government of the Lao People's Democratic Republic for the period 1996-2000 and the years 1996-1997;

Considering the proposal of the Minister of Commerce and the Chairman of the People's Committee of Quang Tri Province,

 

DECISION:

Article 1. This Decision promulgates the Regulation on the Economic and Trade Encouragement Zone of Lao Bao, Quang Tri Province (hereinafter referred to as the Lao Bao Trade Zone)..

Article 2. The Lao Bao Trade Zone includes the town of Lao Bao, the town of Khe Sanh, and the communes of Tan Thanh, Tan Long, Tan Lien, Tan Lap, Tan Hop in Huong Hoa District, Quang Tri Province.

Article 3. The Ministers of Commerce, National Defense, Planning and Investment, Finance, Construction, Public Security, the Directors General of the General Department of Customs, the General Department of Tourism, the General Department of Land Administration, and the Heads of other ministries equivalent to ministerial level, and the Heads of government agencies related shall coordinate with the Chairman of the People's Committee of Quang Tri Province to provide detailed guidance on the implementation of this Regulation.

Article 4. This Decision takes effect fifteen days from the date of signature. The Ministers, Heads of ministries equivalent to ministerial level, Heads of government agencies, and the Chairman of the People's Committee of Quang Tri Province are responsible for its implementation.

 

REGULATION ON THE LAO BAO TRADE ZONE

(issued together with Decision No. 219/1998/QĐ-TTg dated November 12, 1998 of the Prime Minister)

 PART 1
GENERAL PROVISIONS

Article 1.

This Regulation governs the activities of organizations and individuals of Vietnam and foreign countries in the Economic and Trade Encouragement Zone of Lao Bao (hereinafter referred to as the Lao Bao Trade Zone) established based on the Agreement on economic, cultural, scientific and technical cooperation between the Government of the Socialist Republic of Vietnam and the Government of the Lao People's Democratic Republic, aiming to promote economic and trade cooperation relations between Vietnam and Laos with other countries.

The Lao Bao Trade Zone includes the town of Lao Bao, the town of Khe Sanh, and the communes of Tan Thanh, Tan Long, Tan Lien, Tan Lap, Tan Hop in Huong Hoa District, Quang Tri Province.

Article 2.

The Government of the Socialist Republic of Vietnam encourages organizations and individuals of Vietnam and foreign countries to participate in activities in the Lao Bao Trade Zone on the basis of respecting Vietnam's independence and sovereignty, equality, mutual benefit, and compliance with Vietnamese laws and international treaties to which Vietnam is a party.

Article 3.

Organizations and individuals of Vietnam and foreign countries participating in activities in the Lao Bao Trade Zone shall do so under the following forms: trading; product exhibition shops, trade fairs; representative offices and branches of domestic and foreign companies; border markets; bonded warehouses; import, export, transshipment, temporary import for re-export, transit goods; sorting, packaging, processing, recycling, assembly; production of export goods and related services such as cargo transportation, storage, warehousing; tourism, hotels, restaurants; postal and telecommunications; banking; insurance.

Article 4.

Vietnamese enterprises belonging to various economic sectors, foreign-invested enterprises in Vietnam, and foreign enterprises in the Lao Bao Trade Zone (hereinafter referred to as Lao Bao Trade Zone Enterprises) shall operate according to this Regulation, other provisions of Vietnamese law, and international treaties to which Vietnam is a party.

Article 5.

In addition to the rights enjoyed under Vietnamese law and international treaties to which Vietnam is a party, Lao Bao Trade Zone Enterprises shall also enjoy the following rights:

1. Utilizing infrastructure works and services in the Lao Bao Trade Zone in accordance with the regulations of the Lao Bao Trade Zone Management Board.

2. Enjoying incentives stipulated in Chapter IV of this Regulation;

3. Being permitted to transfer land use rights and architectural works in accordance with the approved land use purpose. In case there is a change in the initial investment purpose of the project, the transfer of land use rights and architectural works can only be carried out upon approval by the competent authority.

Article 6.

Lao Bao Trade Zone Enterprises have the obligation to:

1. Comply with Vietnamese law and the provisions of this Regulation.

2. Fulfill financial obligations as prescribed by Vietnamese law.

3. Adhere to regulations concerning border security and public order; ensure labor safety, industrial hygiene, environmental protection, and the regulations of the Lao Bao Trade Zone Management Board;

4. Implement regular and annual reporting systems as prescribed by law.

Article 7.

Border residents living in Huong Hoa District, Quang Tri Province (Vietnam) and the adjacent district in Savannakhet Province (Laos) and Lao Bao Trade Zone Enterprises are allowed to register for business and exchange goods at the border market of the Lao Bao Trade Zone in accordance with the Regulation on the organization and management of the Vietnam-Laos border market.

 CHAPTER II
EXPORT AND IMPORT OF GOODS AND SERVICES

Article 8.

Goods, equipment, means of transport, materials (collectively referred to as goods), luggage, and foreign currency brought into the Lao Bao Trade Zone from abroad and taken out of the Lao Bao Trade Zone to abroad must be subject to inspection and supervision by Customs in accordance with current Vietnamese law.

Raw materials, materials, goods that Lao Bao Trade Zone Enterprises have purchased from the international market but not fully utilized, and by-products, waste products still having commercial value of these enterprises are permitted to be sold in the domestic market after completing customs procedures.

The General Department of Customs authorizes and guides the People's Committee of Quang Tri Province to implement customs regulations and create favorable conditions for Lao Bao Trade Zone Enterprises to carry out the above activities.

Article 9.

Lao Bao Trade Zone Enterprises are permitted to directly engage in export and import of various types of goods (except those prohibited by the State). The operation of exporting and importing goods managed by the State through quotas and goods subject to indicators and conditions shall be carried out in accordance with the regulations and guidelines of the Ministry of Commerce.

Article 10.

Goods for processing, temporary import for re-export, transshipment, and transit through the Lao Bao Trade Zone must comply with current regulations on processing, temporary import for re-export, transshipment, and transit of goods.

Goods for transshipment and transit through the Lao Bao Trade Zone to be transported into Vietnam's interior to be transferred to a third country must comply with Vietnamese law.

The transportation of goods between the Lao Bao Trade Zone and the Dan Xenavan Trade Zone of Laos shall be carried out in accordance with relevant agreements signed between the Governments of Vietnam and Laos and in compliance with the current regulations of each country.

Article 11.

Goods brought into the Lao Bao Trade Zone must be managed separately according to the following current provisions:

Gifts;

Moveable property;

Personal effects of diplomatic missions, international organizations currently operating in Vietnam, and goods and baggage of individuals enjoying diplomatic immunity.

Article 12.

The following types of goods are prohibited from circulation in the Lao Bao Trade Zone:

Goods prohibited from circulation in Vietnam;

Goods prohibited from export or import by Vietnam.

The import and export of goods listed in the prohibition categories of Vietnam but not in those of Laos and internationally through the Lao Bao Trade Zone must be authorized by the Prime Minister.

Article 13.

The Ministry of Commerce authorizes and guides the People's Committee of Quang Tri Province to implement the issuance of licenses for establishing representative offices and branches of foreign companies in the field of trade activities and organizing trade fairs and exhibitions for domestic and foreign organizations in the Lao Bao Trade Zone.

 CHAPTER III
EXPORTS, IMPORTS, RESIDENCE, MOVEMENT AND COMMUNICATION

Article 14.

Citizens of the Lao People's Democratic Republic (hereinafter referred to as Lao citizens) residing in provinces bordering Quang Tri Province may enter and exit the Lao Bao Trade Zone with a border identification card or border travel permit issued by competent authorities of Laos. The temporary residence period in the Lao Bao Trade Zone shall not exceed seven days. If they wish to visit other locations within Quang Tri Province invited by Vietnamese agencies or organizations, the inviting agency or organization must submit a written request to the Quang Tri Provincial Public Security Department for a movement permit. Such permits are valid for a single entry not exceeding five days and are not extendable.

Lao citizens residing in other provinces and foreigners entering the Lao Bao Trade Zone to study the market and prepare for investment and business activities are exempted from visa requirements for entry and exit. Their temporary residence period in the Lao Bao Trade Zone shall not exceed fifteen days. If they wish to travel to other parts of Quang Tri Province or other provinces in Vietnam, they will be granted multiple-entry visas valid for up to three months at the Lao Bao Border Gate by the Exit-Entry Administration (Ministry of Public Security).

Article 15.

Foreigners and overseas Vietnamese participating in activities in the Lao Bao Trade Zone are allowed to frequently enter and exit the Lao Bao Trade Zone with multiple-entry movement permits issued by the Quang Tri Provincial Public Security Department, which must correspond to their duration of activity in the Lao Bao Trade Zone. The Ministry of Public Security authorizes and guides the Quang Tri Provincial Public Security Department to carry out this task.

Article 16.

Vietnamese citizens are free to enter and exit the Lao Bao Trade Zone through designated gates. If they wish to leave the Lao Bao Trade Zone to exit the country, they must comply with laws on entry and exit.

Article 17.

Vietnamese citizens and foreigners working in the Lao Bao Trade Zone are permitted to reside in the Lao Bao Trade Zone. Residency and temporary residency in the Lao Bao Trade Zone shall be implemented in accordance with the regulations of the Lao Bao Trade Zone Management Board.

Article 18.

After completing necessary procedures with postal and telecommunications management agencies, foreigners working in the Lao Bao Trade Zone may use postal and telecommunications services of Vietnam Post and organize their own information systems to manage production and business operations within the enterprises in which they invest and operate in the Lao Bao Trade Zone.

 PART IV
INCENTIVE POLICIES

Article 19.

Enterprises in the Lao Bao Trade Zone, in addition to enjoying incentives stipulated in the Law on Foreign Investment in Vietnam (for foreign-invested enterprises and foreign enterprises) and the Law on Encouraging Domestic Investment (for Vietnamese enterprises of all economic components), and other regulatory legal documents concerning investment projects in mountainous areas, remote regions, and ethnic minority areas, also enjoy additional incentives provided for in this Chapter, as well as incentives under international treaties to which Vietnam is a party.

Article 20.

Trade and service activities in the Lao Bao Trade Zone shall benefit from incentives under the policy for developing the economy in mountainous areas, islands, remote regions, and areas inhabited by ethnic minorities, as currently prescribed by the Government.

Article 21.

Enterprises in the Lao Bao Trade Zone are exempt from corporate income tax for the first four years of operation and are entitled to a 50% reduction in corporate income tax for up to four consecutive years thereafter.

Article 22.

Enterprises in the Lao Bao Trade Zone that reinvest profits earned into the Lao Bao Trade Zone for a period of three years or more shall have the tax authority refund the corporate income tax paid on the amount used for reinvestment.

Article 23.

After settling taxes with the tax authority, if an enterprise in the Lao Bao Trade Zone incurs losses, it may carry forward such losses to the next year, and these losses can be deducted from taxable income. The carry-forward period for losses shall not exceed five years.

Article 24.

Goods and services used for production, processing, recycling, and assembly in the Lao Bao Trade Zone for export or consumption within the Lao Bao Trade Zone are exempt from value-added tax.

Article 25.

All commodity and service relations between the Lao Bao Trade Zone and domestic entities are treated as export and import transactions.

1 - Goods originating from the domestic market of Vietnam and goods imported from abroad into the Lao Bao Trade Zone are exempt from import duties.

2 - Goods originating from the domestic market of Vietnam brought into the Lao Bao Trade Zone and goods produced, processed, recycled, or assembled in the Lao Bao Trade Zone when exported are exempt from export duties.

Article 26.

Goods from abroad imported to participate in exhibitions, trade fairs, and product sales at the Lao Bao Trade Zone are exempted from import tax but still subject to special consumption tax and value-added tax as prescribed by current regulations.

Article 27.

1\. Goods produced, processed, recycled, or assembled at the Lao Bao Trade Zone when imported into Vietnam's domestic market shall be granted a reduction of 10% on the current import tax rate for each type of goods. In cases where processed or recycled goods have an intra-zone content of 20% or more, they shall be granted an import tax reduction equivalent to the percentage of their intra-zone content upon entry into Vietnam's domestic market.

2\. Goods from the Lao Bao Trade Zone imported into Vietnam's domestic market with production origin in Laos shall be granted an import tax reduction according to Decision No. 181/1998/QĐ-TTg dated September 21, 1998, issued by the Government.

Article 28.

Enterprises in the Lao Bao Trade Zone are exempted from land rental fees for the first five years from the date of signing the land lease contract and shall enjoy a land rental fee rate equal to 30% of the land rental fee applicable to mountainous districts of Quảng Trị Province starting from the sixth year onwards.

Article 29.

Organizations and individuals who successfully attract non-budget investment (non-state budget capital) for investment in economic and social projects at the Lao Bao Trade Zone shall be entitled to a certain amount of bonus as stipulated by the Ministry of Finance.

Article 30.

From 1999 to 2005, the State shall allocate annually through the provincial budget not less than 50% of the total revenue collected within the Lao Bao Trade Zone area for the Lao Bao Trade Zone. The level of investment and the list of infrastructure projects funded from this budget shall be proposed by the People's Committee of Quảng Trị Province and decided by the Ministry of Planning and Investment after obtaining the agreement of the Ministry of Finance.

 CHAPTER V
FINANCIAL AND ACCOUNTING REGIME

Article 31.

Enterprises in the Lao Bao Trade Zone shall implement financial and accounting regimes in accordance with the current laws of Vietnam applicable to different types of enterprises.

Article 32.

Transactions, payments, and commercial and service relationships between enterprises in the Lao Bao Trade Zone shall be conducted in Vietnamese dong, Lao kip, and convertible foreign currencies as regulated by the State Bank of Vietnam.

Personal purchases of daily necessities within the Lao Bao Trade Zone shall be made in Vietnamese dong.

Article 33.

Enterprises in the Lao Bao Trade Zone must comply with current regulations on foreign exchange management when exporting goods and services that generate foreign currency income.

Article 34.

Bringing foreign currency into and out of the Lao Bao Trade Zone must comply with the Foreign Exchange Management Regulations of Vietnam.

 Chapter VI
ORGANIZATION OF MANAGEMENT FOR THE LAO BAO TRADE ZONE

Article 35

The People's Committee of Quảng Trị Province shall establish a Management Board for the Lao Bao Trade Zone to centrally and uniformly manage activities within the Lao Bao Trade Zone.

The Ministry of Industry and Trade, the Ministry of National Defense, the Ministry of Public Security, the Ministry of Construction, the Ministry of Finance, the Ministry of Planning and Investment, the General Department of Customs, the General Department of Tourism, the General Department of Land Administration, and other relevant agencies shall cooperate with the People's Committee of Quảng Trị Province to effectively manage the operations of the Management Board for the Lao Bao Trade Zone.

Article 36

The People's Committee of Quảng Trị Province shall be responsible for:

1\. Approving the overall development plan, operation schemes, and bylaws of the Lao Bao Trade Zone, the list of investment projects, and detailed implementation plans within the Lao Bao Trade Zone; directing the preparation of construction planning for the Lao Bao Trade Zone, submitting them to competent authorities for approval and managing projects in accordance with approved planning; deciding to approve Group B and C construction investment projects based on agreements with the Ministry of Planning and Investment;

2\. Establishing a State-owned company for the construction and development of infrastructure in the Lao Bao Trade Zone;

3\. Cooperating with ministries and sectors specified in Article 35 of this Regulation to organize the management of the Lao Bao Trade Zone;

4\. Directing and creating favorable conditions for the Management Board of the Lao Bao Trade Zone to fully perform tasks as stipulated in this Regulation;

5\. Directing the Management Board of the Lao Bao Trade Zone to accept, review, and issue business licenses and investment permits to organizations and individuals directly investing in the Lao Bao Trade Zone under the delegation of the Ministry of Planning and Investment and the Ministry of Industry and Trade;

6\. Directing the People's Committee of Hướng Hóa District and relevant provincial agencies to cooperate with the Management Board of the Lao Bao Trade Zone to implement measures to ensure security, public order, and social safety, thereby facilitating the operations of enterprises in the Lao Bao Trade Zone;

7\. Agreeing with the Savannakhet Provincial Government of Laos on principles of coordination, administration, and management of activities in the Lao Bao Trade Zone and the Den Sa Van Trade Zone based on regulations issued by the Government, in accordance with the special friendly relations between the two countries and the current laws of each country.

Article 37.

The Management Board of the Lao Bao Trade Zone shall have the following responsibilities and powers:

1\. Developing the development plan, operation schemes, and bylaws of the Lao Bao Trade Zone, submitting them to the People's Committee of Quảng Trị Province for approval, organizing their dissemination, guidance, and supervision of their implementation;

2\. Preparing lists of investment projects and implementation plans, submitting them to competent authorities for approval, and organizing their implementation;

3\. Issuing and revoking business licenses under the delegation of the Ministry of Industry and Trade, and investment permits under the delegation of the Ministry of Planning and Investment after reaching consensus with the People's Committee of Quảng Trị Province; monitoring and inspecting the implementation of issued licenses;

4\. Establishing rates and fees for submission to competent state authorities for promulgation and implementation within the Lao Bao Trade Zone;

5\. Issuing Business Registration Certificates, Origin Certificates for goods, and other certificates when authorized by competent state authorities;

6\. Serving as the focal point for resolving issues arising during the formation, implementation, and operation of investment and business projects within the Lao Bao Trade Zone.

7. Cooperate with the agencies specified in Article 35 of this Regulation and local authorities to ensure that all activities within the Lao Bao Trade Zone comply with this Regulation and the operational charter of the Lao Bao Trade Zone;

8. Carry out the task of managing construction projects funded by the state budget investment within the Lao Bao Trade Zone;

9. Coordinate with the Management Board of the Den Sa Van Trade Zone (Laos) to ensure that activities between the two trade zones develop in accordance with the Agreements signed between the Government of the Socialist Republic of Vietnam and the Government of the Lao People's Democratic Republic and the agreements between the province of Quang Tri and the province of Xiangkhoang;

Article 38.

The Lao Bao Trade Zone Management Board has legal personality, its own seal, bank account, dedicated staffing, and operating funds provided by the state budget;

Revenue from the state budget within the Lao Bao Trade Zone must be remitted to the state budget;

Article 39.

1. Resolve civil-commercial disputes within the Lao Bao Trade Zone:

The Lao Bao Trade Zone Management Board is responsible for mediating disputes arising during the operation of enterprises within the Lao Bao Trade Zone and between enterprises within the Lao Bao Trade Zone and organizations and individuals outside the Lao Bao Trade Zone;

In cases where mediation fails, disputes will be resolved in accordance with the provisions of Vietnamese law;

2. Criminal cases occurring within the Lao Bao Trade Zone fall under the jurisdiction of the courts as prescribed by Vietnamese law;

 Chapter VIII
IMPLEMENTING PROVISIONS

Article 40.

Other provisions related to the operations of enterprises within the Lao Bao Trade Zone not specified in this Regulation shall be implemented in accordance with corresponding provisions of the Commercial Law, Law on Foreign Investment, Law on Encouragement of Domestic Investment, Law on State-Owned Enterprises, Law on Private Enterprises, Law on Companies, Law on Banks, Law on Land, other legal documents of the Vietnamese State, and international treaties to which Vietnam is a party;

Article 41.

The incentives provided for enterprises within the Lao Bao Trade Zone under this Regulation shall be permitted by the Vietnamese Government to apply to enterprises that have been granted operating licenses before the issuance of this Regulation./.