Decree No. 29/2008/ND-CP on industrial zones, export processing zones, and economic zones

DECREE

Regulations on industrial zones, export processing zones, and economic zones

_____________________

THE GOVERNMENT

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

Based on the Investment Law dated November 29, 2005;

Pursuant to the Enterprise Law dated November 29, 2005;

Pursuant to the Law on Trade dated June 14, 2005;

Considering the proposal of the Minister of Planning and Investment.

DECREE:

Chapter 1

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Decree stipulates the establishment, operation, policies, and state management of industrial zones, export processing zones, economic zones, and border economic zones.

2. The subjects to which this Decree applies include state administrative agencies, organizations, and individuals related to investment and production and business activities within industrial zones, export processing zones, economic zones, and border economic zones.

Article 2. Interpretation of Terms

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

1. Industrial Zone is a specialized area for manufacturing industrial goods and providing services for industrial production, with clearly defined geographical boundaries, established according to the conditions, procedures, and formalities prescribed in this Decree.

2. Export Processing Zone is an industrial zone specializing in manufacturing export goods, providing services for export production and export activities, with clearly defined geographical boundaries, established according to the conditions, procedures, and formalities applicable to industrial zones prescribed in this Decree.

Industrial zones and export processing zones are collectively referred to as industrial zones, except where specifically provided otherwise.

3. Economic Zone is a distinct economic space with a special investment and business environment that is particularly favorable to investors, with clearly defined geographical boundaries, established according to the conditions, procedures, and formalities prescribed in this Decree.

An economic zone is organized into functional areas including: duty-free zones, bonded zones, export processing zones, industrial zones, entertainment zones, tourist zones, urban zones, residential zones, administrative zones, and other functional zones appropriate to the characteristics of each economic zone.

4. Border Economic Zone is an economic zone formed in border areas with international border gates or main border gates and established according to the conditions, procedures, and formalities prescribed in this Decree.

Economic zones and border economic zones are collectively referred to as economic zones, except where specifically provided otherwise.

5. Industrial land area is the area of land in an industrial zone that has been developed with infrastructure for investors to lease or sublease to implement investment projects for production and business activities within the industrial zone.

6. Export Processing Enterprise is an enterprise established and operating in an export processing zone or an enterprise exporting all its products operating in an industrial zone or economic zone.

7. Comprehensive Master Plan for Developing Industrial Zones and Economic Zones throughout the country is a plan prepared and approved in accordance with the laws on planning, approving, and managing comprehensive master plans for socio-economic development and the provisions of this Decree.

Article 3. Application of Specialized Laws and International Treaties

1. Special investment activities in industrial zones and economic zones regulated by specialized laws shall be implemented in accordance with the provisions of those specialized laws.

2. In cases where international treaties relating to investment to which Vietnam is a party provide different provisions from those of this Decree, the provisions of such international treaties shall apply.

Chapter 2

PROCEDURES AND FORMALITIES FOR THE ESTABLISHMENT OF INDUSTRIAL ZONES AND ECONOMIC ZONES

Article 4. Comprehensive Master Plan for Developing Industrial Zones and Economic Zones

1. Based on the national strategy and socio-economic development plans; land use plans at the national level and of provinces and centrally governed cities, the Ministry of Planning and Investment shall take the lead and coordinate with relevant ministries, sectors, and provincial people's committees (hereinafter referred to collectively as provincial-level people's committees) to develop and submit to the Prime Minister for approval the Comprehensive Master Plan for Developing Industrial Zones and Economic Zones.

2. The Comprehensive Master Plan for Developing Industrial Zones and Economic Zones, once approved, serves as the basis for considering the establishment of industrial zones and economic zones; developing planning and investment plans for the development of technical infrastructure and social infrastructure systems to serve the development of industrial zones and economic zones.

Article 5. Conditions for establishing and expanding industrial zones

1. Conditions for establishing an industrial zone:

a) In accordance with the overall planning for the development of industrial zones that has been approved;

b) The total area of industrial land in established industrial zones within the territory of provinces and centrally governed cities allocated to investment projects, issued with investment certificates for land lease or sublease, must be at least 60%.

2. Conditions for expanding an industrial zone:

a) In accordance with the overall planning for the development of industrial zones that has been approved;

b) The total area of industrial land in this industrial zone allocated to investment projects, issued with investment certificates for land lease or sublease, must be at least 60%;

c) The industrial zone must have constructed and put into operation centralized wastewater treatment facilities.

3. For industrial zones with an area of 500 hectares or more and involving multiple investors participating in the construction and business of infrastructure in separate areas or industrial zones attached to urban areas or concentrated business zones within an overall project plan, a general construction master plan must be prepared according to the guidelines of the Ministry of Construction before preparing detailed planning.

4. For industrial zones with an area of 500 hectares or more or located adjacent to national highways, near defense areas, historical relic conservation zones, scenic spots, ecological conservation zones of the region and the country, within cities classified as Class II, Class I, and Special Class, there must be written opinions from the Ministry of Construction and relevant ministries and sectors regarding the detailed planning for construction of the industrial zone before the provincial People's Committee approves it.

Article 6. Conditions for supplementing industrial zones into the Overall Planning for Industrial Zone Development

1. The total area of industrial land in established industrial zones within the territory of provinces and centrally governed cities allocated to investment projects, issued with investment certificates for land lease or sublease, must be at least 60%.

2. In accordance with socio-economic development planning; land use planning of each locality; regional and urban construction planning; infrastructure and technical planning; mineral resource utilization planning and other natural resources.

3. Possess favorable conditions or have the potential to build technical infrastructure and social infrastructure systems, implement them in a coordinated manner and closely integrate industrial zone development planning with urban development planning, population distribution, housing, and social facilities serving workers in the industrial zone.

4. Have sufficient conditions for developing industrial zones including:

a) Having reserve land for development and having conditions to form clusters of industrial zones;

b) Having the ability to attract domestic and foreign investor capital;

c) Having the ability to provide and meet labor needs.

5. Ensuring compatibility with national defense arrangements and requirements for national defense and security.

Article 7. Conditions for establishing and expanding economic zones

1. Conditions for establishing an economic zone:

a) In accordance with the overall planning for the development of economic zones that has been approved;

b) Having a geographical location conducive to regional economic development (having deep-sea ports or being close to airports), conveniently connected to national and international traffic arteries; easy to control and facilitate communication with both domestic and foreign entities; having favorable conditions and resources for investing in and developing technical infrastructure;

c) Having an area of 10,000 hectares or more and meeting the requirements for comprehensive development of the economic zone;

d) Having the ability to attract large-scale, important investment projects with significant impact on the socio-economic development of the entire region;

đ) Having the ability to leverage local potential and create a ripple effect of development on surrounding areas;

e) Not having negative impacts on nature conservation areas; not causing adverse effects and damage to tangible cultural heritage, scenic spots, architectural complexes of historical, aesthetic, and scientific value; being compatible with national defense arrangements and ensuring national defense and security; having conditions to meet environmental, ecological, and sustainable development requirements.

2. Conditions for establishing border economic zones:

a) In accordance with the overall planning for the development of economic zones that has been approved;

b) Having an international border gate or a main border gate as defined in Decree No. 32/2005/NĐ-CP dated March 14, 2005 of the Government on Border Gate Regulations; including contiguous administrative units, not separated in space;

c) Conveniently connected to national traffic arteries; facilitating communication with neighboring countries through the border gates of the neighboring country; having favorable conditions and resources for investing in technical infrastructure;

d) Meeting the requirements for comprehensive development of border economic zones including trade, import-export, temporary import for re-export, transit goods transportation, industrial production, tourism, and services; having conditions to leverage local potential and surrounding regions; having the ability to develop trade and attract investment;

đ) Integrating economic development with maintaining national security, political stability, public order, and safety, and protecting national sovereignty in border areas;

e) Not having negative impacts on nature conservation areas; not causing adverse effects and damage to tangible cultural heritage, scenic spots, architectural complexes of historical, aesthetic, and scientific value; having conditions to meet environmental, ecological, and sustainable development requirements.

3. Conditions for expanding economic zones:

a) The entire system of infrastructure in the economic zone has been fully invested according to the General Construction Master Plan for the Economic Zone;

b) At least 70% of the functional area land in the economic zone has been assigned or leased to organizations or individuals to implement projects.

4. Economic zones are organized into functional areas as stipulated in Clause 3, Article 2 of this Decree. The scale of area and location of each functional area are determined in the General Construction Master Plan for the Economic Zone approved by the Prime Minister.

Article 8. Procedures for establishing and expanding industrial zones

1. The procedures for issuing Investment Certificates for projects to construct and operate industrial zone infrastructure shall be carried out in accordance with the laws on investment:

In cases where the industrial zone or expansion of an industrial zone is included in the Master Plan for Industrial Zone Development or in the General Urban Planning for Economic Zones that have been approved, the agency issuing the Investment Certificate shall carry out the investment procedures for projects to construct and operate infrastructure without having to submit to the Prime Minister for approval of the investment orientation and permission to establish the industrial zone;

In cases where the industrial zone or expansion of an industrial zone is not included in the Master Plan for Industrial Zone Development that has been approved, the People's Committee of the province shall carry out the procedures to supplement or expand the industrial zone into the Master Plan for Industrial Zone Development in accordance with Articles 6 and 12 of this Decree.

2. Decision on establishment and expansion of industrial zones:

a) Documents for establishing and expanding industrial zones shall be prepared in accordance with Article 10 of this Decree,

b) Decision on establishment and expansion of industrial zones as stipulated in Clause 2, Article 15 of this Decree.

Article 9. Procedures for establishing and expanding economic zones

1. In cases where the establishment and expansion of economic zones are included in the Master Plan for Economic Zone Development that has been approved, the Ministry of Planning and Investment shall carry out the procedures to review the establishment and expansion of economic zones in accordance with Article 13 of this Decree.

In cases where the establishment and expansion of economic zones are not included in the Master Plan for Economic Zone Development that has been approved, the procedures to supplement or expand economic zones into the Master Plan for Economic Zone Development must be carried out in accordance with the laws on planning, approving, and managing the overall socio-economic development plan.

2. Decision on establishment and expansion of economic zones

a) Documents for establishing and expanding economic zones shall be prepared in accordance with Article 11 of this Decree;

b) Decision on establishment and expansion of economic zones as stipulated in Clause 1, Article 15 of this Decree.

Article 10. Documents for establishing and expanding industrial zones

1. A proposal document from the investor regarding the establishment and expansion of the industrial zone.

2. Decision approving the detailed construction planning of the industrial zone by the People's Committee of the province.

3. Investment Certificate issued to the investor implementing the project to develop industrial zone infrastructure.

4. The documents shall be prepared in four sets, including one original set, which shall be submitted to the Management Board of the industrial zone, export processing zone, economic zone (hereinafter referred to collectively as the Management Board, except in specific cases) or the Department of Planning and Investment (for localities that have not established a Management Board).

5. Within five working days from the date of receiving valid documents, the Management Board or the Department of Planning and Investment (for localities that have not established a Management Board) shall submit to the People's Committee of the province the matter of establishing and expanding the industrial zone. Within ten working days from the date of receiving valid documents, the People's Committee of the province shall decide on establishing and expanding the industrial zone in accordance with Clause 2, Article 15 of this Decree.

Article 11. Documents for Establishing and Expanding Economic Zones

1. The proposal for establishing and expanding economic zones shall include the following main contents:

a) The necessity and legal basis for building the economic zone;

b) An assessment of geographical, natural, resource, socio-economic factors, advantages, and limitations of the area where the economic zone is planned to be built;

c) An evaluation and explanation regarding the ability to meet the conditions stipulated in Article 7 of this Decree;

d) A proposed development direction including: development goals, nature, and functions of the economic zone; development directions for various industries and fields; development orientation for functional areas; land use planning orientation within the economic zone;

đ) A proposed total investment amount, methods of raising capital for investing in the economic zone's infrastructure system; the establishment date of the economic zone; plans and investment development timelines;

e) Environmental impact assessment;

g) Recommendations on solutions and implementation organizations;

h) Presentation of the economic zone's planning scheme on the planning map.

2. The provincial People's Committee's report to the Prime Minister proposing the establishment and expansion of the economic zone.

3. The documents shall be prepared in ten sets, including at least two original sets (one original set submitted to the Prime Minister and nine sets submitted to the Ministry of Planning and Investment for review in accordance with Article 13 of this Decree).

Article 12. Documents for Supplementing Industrial Zones into the Comprehensive Plan for Developing Industrial Zones

1. The planning proposal for developing industrial zones within the territory of provinces and centrally governed cities shall include the following main contents:

a) The necessity and legal basis for supplementing the plan;

b) An assessment of the current situation and projected development direction for the economy and society, and industrial development within the territory of provinces and centrally governed cities;

c) An assessment of the current status and development of established and planned industrial zones within the territory of provinces and centrally governed cities;

d) The name, location, area size, current status, and specific development conditions of each planned industrial zone;

đ) An evaluation and explanation regarding the ability to meet the conditions stipulated in Article 6 of this Decree;

e) The ability to mobilize various sources of capital for constructing and developing industrial zones;

g) Presentation of the planning scheme for developing industrial zones on the planning map.

2. The provincial People's Committee's report to the Prime Minister proposing to supplement industrial zones into the Comprehensive Plan for Developing Industrial Zones.

3. The documents shall be prepared in ten sets, including at least two original sets (one original set submitted to the Prime Minister and nine sets submitted to the Ministry of Planning and Investment for review in accordance with Article 13 of this Decree).

Article 13. Review of Supplementing the Comprehensive Plan for Developing Industrial Zones and Establishing Economic Zones

1. Content of examination:

a) Legal basis and necessity for supplementing the comprehensive plan for developing industrial zones or establishing economic zones;

b) Compatibility of supplementing the comprehensive plan for developing industrial zones or establishing economic zones with local socio-economic development plans, land use plans; regional construction and urban planning; infrastructure and technical planning; mineral and other resource utilization plans;

c) Objectives and indicators of supplementing the comprehensive plan for developing industrial zones or establishing economic zones and allocation of resources;

d) Degree of meeting corresponding conditions for supplementing the comprehensive plan for developing industrial zones or establishing economic zones;

đ) Implementation measures and feasibility of supplementing the comprehensive plan for developing industrial zones or establishing economic zones.

2. Procedure and process for examination:

a) Within five working days from the date of receipt of the supplementary comprehensive plan for developing industrial zones or establishing economic zones, the Ministry of Planning and Investment shall seek opinions from relevant ministries and sectors.

In case the documents do not comply with the provisions of Articles 10 or 11 of this Decree, the Ministry of Planning and Investment shall issue a document requesting the provincial People's Committee to supplement or amend the documents. The time for supplementation or amendment of the documents shall not be counted towards the review period.

b) Within ten working days for industrial zones and twenty working days for economic zones from the date of receipt of valid documents, relevant ministries and sectors shall send their opinions to the Ministry of Planning and Investment.

In necessary cases, the Ministry of Planning and Investment shall organize meetings with relevant ministries, sectors, and the provincial People's Committee to clarify related issues.

c) Within thirty working days for industrial zones and forty-five working days for economic zones from the date of receipt of valid documents, the Ministry of Planning and Investment shall compile and submit to the Prime Minister for consideration and decision.

Article 14. Initial expansion and adjustment of industrial zone area

1. In cases where the initial expansion of an industrial zone has an expanded area less than 10% compared to the approved master plan area but not exceeding 30 hectares and does not affect other plans, based on opinions from relevant ministries and sectors, the provincial People's Committee decides on the expansion of this industrial zone without having to submit to the Prime Minister for approval of supplementary overall development planning for industrial zones.

2. In cases where the actual area of the industrial zone, after measurement, differs less than 10% from the approved master plan area but not exceeding 20 hectares, the provincial People's Committee decides to adjust the master plan area to match the actual area without having to submit to the Prime Minister.

3. All remaining cases of expansion and adjustment of the area of industrial zones must be submitted to the Prime Minister for consideration and decision.

Article 15. Authority to establish and expand industrial zones and economic zones

1. The Prime Minister decides on the establishment and expansion of economic zones in accordance with the approved overall development planning for economic zones.

2. The Chairman of the provincial People's Committee decides on the establishment and expansion of industrial zones already included in the approved overall development planning for industrial zones or in the general planning for construction of economic zones.

Chapter 3

MECHANISMS AND POLICIES FOR INDUSTRIAL ZONES, EXPORT PROCESSING ZONES AND ECONOMIC ZONES

Article 16. Investment incentives for industrial zones and economic zones

1. Industrial zones are investment incentive areas and enjoy policies of preferential treatment applicable to areas listed in the List of Areas with Difficult Economic and Social Conditions. Industrial zones established in areas listed in the List of Areas with Particularly Difficult Economic and Social Conditions enjoy preferential policies applicable to areas listed in the List of Areas with Particularly Difficult Economic and Social Conditions.

2. Investors with projects investing in industrial zones, including expansion projects, enjoy the following incentives:

a) Projects investing in industries and fields listed in the List of Industries and Fields with Special Investment Incentives shall be granted incentives applicable to projects investing in industries and fields listed in the List of Industries and Fields with Special Investment Incentives and implemented in areas listed in the List of Areas with Difficult Economic and Social Conditions or in the List of Areas with Particularly Difficult Economic and Social Conditions;

b) Projects investing in industries and fields listed in the List of Industries and Fields with Investment Incentives and production projects within industrial zones shall be granted incentives applicable to projects investing in industries and fields listed in the List of Industries and Fields with Investment Incentives and implemented in areas listed in the List of Areas with Difficult Economic and Social Conditions or in the List of Areas with Particularly Difficult Economic and Social Conditions;

c) Projects investing in industries and fields not covered under points a and b of Clause 2 of this Article shall be granted incentives as stipulated in Clause 1 of this Article.

3. Investors with projects investing in economic zones, including expansion projects, enjoy preferential policies applicable to areas listed in the List of Areas with Particularly Difficult Economic and Social Conditions and other preferential policies as prescribed in this Decree.

4. The following projects shall enjoy the highest tax incentives as prescribed by laws on corporate income tax:

a) Projects investing in industries and fields listed in the List of Industries and Fields with Special Investment Incentives and implemented in economic zones or in industrial zones established in areas listed in the List of Areas with Particularly Difficult Economic and Social Conditions;

b) Projects constructing and operating infrastructure in duty-free zones within economic zones;

c) High-tech projects in industrial zones and economic zones;

d) Large-scale projects with significant importance to the development of industries and fields or regional economic and social development in industrial zones and economic zones, after being approved by the Prime Minister.

5. A 50% reduction in income tax for individuals subject to income tax, including both Vietnamese and foreign nationals working in economic zones.

6. Costs for construction, operation, or rental of apartment buildings and social infrastructure facilities serving workers in industrial zones and economic zones are deductible expenses for calculating taxable income of enterprises with projects in industrial zones and economic zones.

Article 17. Methods for Mobilizing Capital Sources to Invest in Developing Technical Infrastructure and Social Infrastructure Systems in Economic Zones

1. Important infrastructure investment projects in economic zones shall be allocated capital from local budget development funds and targeted central government budget support funds. The conditions, principles, and types of works supported by the central government budget shall be implemented in accordance with the regulations of the Prime Minister.

2. Large-scale infrastructure construction projects that play a key role in the development of economic zones may issue project bonds.

3. Technical infrastructure and social infrastructure works, public service and utility works necessary for economic zones may utilize official development assistance (ODA) funds, preferential loans, and other technical aids.

4. Investment capital shall be attracted through various forms such as BOT, BT, BTO, and other forms prescribed by law.

5. Investment and business projects for constructing functional area infrastructure within economic zones may mobilize capital through leasing part or all of the undeveloped land areas to investors (excluding those specified in point d, Clause 4, Article 3 of the Investment Law) who have financial capacity and experience in attracting investment for development and subsequent leasing of the land.

6. Projects for developing technical infrastructure and social infrastructure serving the entire economic zone may mobilize capital from land funds in accordance with laws on land.

Article 18. Exit, Entry, Movement, and Residence in Economic Zones

1. Foreign nationals and overseas Vietnamese working, investing, or doing business in economic zones and their family members shall be granted multiple-entry visas valid for the duration of their work in the economic zone; they shall be allowed to reside temporarily in the economic zone and in Vietnam.

2. For border economic zones, departure, entry, and residence shall be carried out as follows:

a) Citizens of neighboring countries bordering the economic zone shall enter and exit the economic zone using border identification cards or border travel permits issued by the competent authority of the neighboring country; if they wish to enter other locations within the province where the economic zone is located, the provincial police authority shall issue a single-use permit valid for a specific period.

b) Individuals holding passports not exempt from visa requirements (citizens of neighboring countries or third countries) shall be exempt from visa entry and allowed to stay in the economic zone for up to 15 days; if they travel to other regions of Vietnam under programs organized by international travel companies in Vietnam, the competent immigration authorities shall consider issuing entry visas at the economic zone.

c) Cargo transport vehicles from neighboring countries and third countries may enter the economic zone based on business contracts between foreign partners and Vietnamese enterprises. If these vehicles need to deliver goods at locations outside the economic zone, they must comply with current regulations.

Vehicle operators (crew members on ships, drivers, and assistants) may enter and exit the economic zone using passports, seaman's books, border identification cards, or border travel permits issued by foreign competent authorities.

d) Expanding the reception of tourists from neighboring countries traveling with passports, cards, or equivalent documents to visit provinces and cities throughout the country according to paragraph b, Clause 2 of this Article is permitted at the economic zone.

e) Vietnamese cargo owners and vehicle owners engaged in business relations with neighboring countries may cross the border with their goods and vehicles for delivery purposes using border identification cards or border travel permits issued by Vietnamese competent authorities.

f) Vietnamese citizens residing and operating businesses in districts or towns adjacent to economic zones may cross the border to neighboring countries using border identification cards or border travel permits consistent with international treaties between Vietnam and relevant neighboring countries or if approved by the neighboring country.

Article 19. Financial and credit provisions for economic zones

1. The purchase, sale, payment, transfer, and other transaction relationships between organizations and individuals engaged in business activities within border economic zones may be conducted in Vietnamese Dong, Chinese Renminbi, Lao Kip, Cambodian Riel, and freely convertible foreign currencies as prescribed by the State Bank of Vietnam.

2. Credit institutions are permitted to establish and operate within economic zones in accordance with laws on credit institutions.

3. Domestic and international tourists visiting duty-free areas within border economic zones are allowed to purchase imported goods and bring them back to domestic areas, exempt from import tax, value-added tax, and special consumption tax (if applicable) as stipulated by the Prime Minister.

4. Organizations and individuals who have achieved success in mobilizing official development assistance funds and investment projects into economic zones shall be commended and rewarded according to the Regulations issued by the People's Committee of the province after obtaining the approval of the Ministry of Finance.

Article 20. Residency and temporary residency in industrial zones, export processing zones, and export-oriented enterprises

1. There are no residents living in industrial zones and export processing zones.

2. Only investors, workers in export processing zones and export-oriented enterprises, and those having work-related connections with agencies, organizations, and enterprises in these zones are permitted to enter and exit such zones. These individuals are not allowed to reside in the zones except when authorized by the Management Board.

3. In cases of necessity, foreign experts may be permitted to temporarily reside at enterprises within industrial zones and export processing zones as prescribed by the provincial People's Committee. Temporary residence of foreign experts must meet the following conditions:

a) To serve the production and business operations of the enterprise;

b) Without accompanying family members or relatives;

c) Must comply with current procedures for registration and declaration of temporary residence for foreigners entering, exiting, and residing in Vietnam;

d) The enterprise must provide separate accommodation and commit that the temporary residence of foreign experts ensures security, order, and does not affect the operation of the industrial zone or export processing zone.

Article 21. Special provisions applicable to export processing zones and export-oriented enterprises

1. Export processing zones and export-oriented enterprises are subject to regulations applicable to duty-free areas as prescribed by law. The designation of an export-oriented enterprise is recorded in the Investment Certificate.

2. An export processing zone or export-oriented enterprise is separated from the outside territory by a fence system with gates and entrances, ensuring conditions for customs control and related authorities.

3. Export-oriented enterprises are permitted to purchase office supplies, foodstuffs, and consumer goods from the domestic market of Vietnam to serve the management of their office machinery and the daily life of employees working at the enterprise. Such enterprises may choose whether or not to follow export and import procedures and customs formalities for these types of goods.

4. Customs procedures, inspection, and supervision of goods exported and imported by export processing zones and export-oriented enterprises shall be carried out in accordance with laws on customs.

5. The exchange of goods between export processing zones and export-oriented enterprises and other areas within the territory of Vietnam, excluding duty-free areas, is considered an import and export relationship.

6. Employees working in export processing zones and export processing enterprises who carry foreign currency from domestic Vietnam into export processing zones and export processing enterprises and vice versa are not required to declare to customs.

Chapter 4

STATE MANAGEMENT OF INDUSTRIAL ZONES, EXPORT PROCESSING ZONES AND ECONOMIC ZONES

Article 22. Contents of State Management over Industrial Zones, Export Processing Zones, and Economic Zones

1. Developing and directing the implementation of planning, plans, and policies for the development of industrial zones and economic zones.

2. Issuing, guiding, disseminating, and organizing the implementation of policies, laws, and technical standards related to the establishment, investment, construction, development, and management of activities in industrial zones and economic zones; building and managing information systems on industrial zones and economic zones; organizing investment promotion activities in industrial zones and economic zones.

3. Issuing, adjusting, revoking Investment Certificates, Business Registration Certificates, various licenses, certificates, and certifications; implementing administrative procedures of the state and providing support related to investment and business operations of organizations and individuals within industrial zones and economic zones.

4. Organizing the administrative apparatus, training, and professional development for state management agencies over industrial zones and economic zones.

5. Guiding, supporting, evaluating the effectiveness of investments, inspecting, supervising, auditing, resolving complaints and denunciations, rewarding, handling violations, and resolving issues arising during the formation and development of industrial zones and economic zones.

Article 23. Authorities and Responsibilities of State Management over Industrial Zones, Export Processing Zones, and Economic Zones

1. The Government uniformly manages state affairs regarding industrial zones and economic zones throughout the country based on the specific division of tasks and authorities among Ministries, sectors, provincial People's Committees, and Management Boards as stipulated in this Decree; directing the development and implementation of planning, plans for development, and issuing policies and legal normative documents on industrial zones and economic zones.

2. The Prime Minister has the authority and responsibility:

a) Directing Ministries, sectors, provincial People's Committees, and Management Boards to implement laws and policies on industrial zones and economic zones;

b) Approving and adjusting the Comprehensive Planning for the Development of Industrial Zones and Economic Zones;

c) Deciding on investment policies for projects within its jurisdiction;

d) Deciding on the establishment of economic zones, approving the General Planning for Construction of Economic Zones; permitting expansion and reduction in scale of land area, changing the purpose of land use that has been approved in industrial zones and functional areas within economic zones;

đ) Directing the resolution of issues encountered during the establishment, operation, and management of activities in industrial zones and economic zones that exceed the jurisdiction of Ministries, sectors, provincial People's Committees, and Management Boards.

3. Ministries, sectors, and provincial People's Committees within their functions, tasks, and authorities have the responsibility to manage state affairs in their respective industries, fields, and territorial administration concerning industrial zones and economic zones; guiding or delegating to Management Boards to perform certain state management tasks within their jurisdiction according to this Decree and relevant laws.

Article 24. Authorities and Responsibilities of State Management of the Ministry of Planning and Investment

1. Leading and coordinating with the Ministry of Construction, the Ministry of Natural Resources and Environment, the Ministry of National Defense, the Ministry of Industry and Trade, and related Ministries, sectors, and provincial People's Committees to develop the Comprehensive Planning for the Development of Industrial Zones and Economic Zones, submitting it to the Prime Minister for approval.

2. Leading and coordinating with related Ministries and sectors to develop legal documents and policies for the development of industrial zones and economic zones, submitting them to competent state agencies for issuance; reviewing and submitting to the Prime Minister for the abolition of provisions in the Operation Regulations of economic zones that have been approved to align with this Decree.

3. Leading and coordinating with related Ministries and sectors to guide, train, and provide professional development for Management Boards.

4. Leading and coordinating with the Ministry of Finance and related Ministries and sectors to propose budget support schemes from the central government for investment and business infrastructure development projects in industrial zones in localities with difficult socio-economic conditions and extremely difficult conditions as decided by the Prime Minister; budget support schemes from the central government for developing technical infrastructure systems in economic zones as stipulated in this Decree.

5. Leading and coordinating with related Ministries, sectors, provincial People's Committees, and Management Boards to develop and implement national programs and plans for investment promotion in industrial zones and economic zones.

6. Building and managing the national information system on industrial zones and economic zones; issuing periodic reporting forms and providing information on industrial zones and economic zones to related government agencies.

7. Summarizing and evaluating the economic and social outcomes of industrial zones and economic zones, reporting to the Prime Minister.

Article 25. Powers and responsibilities for state management of the Ministry of Home Affairs

1. Issuing regulations on the establishment, classification, ranking, and restructuring of Management Boards.

2. Regulations on organizational structure, staffing, and salaries for civil servants and public officials of Management Boards.

3. Reviewing the Project for establishing and restructuring Management Boards and submitting to the Prime Minister for consideration and decision.

Article 26. Powers and responsibilities for state management of the Ministry of Finance

1. Guiding financial systems and customs procedures applicable in industrial zones, economic zones, and export processing enterprises.

2. Establishing financial mechanisms and policies for Management Boards, economic units with revenue as main investors in construction and operation of industrial zone infrastructure and special economic organizations related to industrial zones and economic zones in accordance with legal provisions.

3. Guiding the implementation of the provisions stipulated in Clause 6, Article 16 of this Decree.

Article 27. Powers and responsibilities for state management of the Ministry of Construction

1. Issuing guidelines on the preparation, review, approval, and adjustment of general planning for economic zones, general planning for industrial zones as stipulated in Clause 3, Article 5 of this Decree, detailed planning for industrial zones, and functional areas within economic zones.

2. Issuing guidelines for Management Boards to carry out state management over technical infrastructure projects, construction projects within industrial zones and economic zones, and urban management and development activities within economic zones.

Article 28. Powers and responsibilities for state management of the Ministry of Industry and Trade

1. Implementing state management over industry, import-export activities, and trade within industrial zones and economic zones; directing the development of industries within these zones according to approved regional and territorial industrial development strategies, plans, and programs.

2. Delegating Management Boards to issue Certificates of Origin for goods produced in industrial zones and economic zones; issuing, reissuing, amending, supplementing, and extending Licenses for establishing representative offices of foreign organizations and traders located in industrial zones and economic zones.

3. Guiding Management Boards to issue Business Licenses for trading activities and other activities directly related to trading for foreign-invested enterprises and foreign investors investing in industrial zones and economic zones for the first time.

4. Drafting the Operation Regulations of duty-free zones within economic zones to be issued by the Prime Minister.

Article 29. Powers and responsibilities for state management of the Ministry of Natural Resources and Environment

1. Issuing environmental management and protection regulations in industrial zones and economic zones.

2. Guiding the collection of environmental protection fees in industrial zones and economic zones.

3. Guiding Management Boards to perform certain state management tasks regarding natural resources and the environment in industrial zones and economic zones in accordance with environmental protection laws.

Article 30. Powers and responsibilities for state management of the Ministry of Science and Technology

1. Issuing regulations on criteria for determining high-tech investment projects in industrial zones and economic zones.

2. Guiding Management Boards to carry out state management over science and technology for organizations operating within industrial zones and economic zones.

Article 31. Powers and responsibilities for state management of the Ministry of Labor, Invalids and Social Affairs

Guide the Management Board to perform certain tasks related to labor management at industrial zones and economic zones as prescribed by labor laws.

Article 32. Powers and responsibilities for state management of the Ministry of Public Security

1. Carry out state management functions regarding security, public order, fire prevention and firefighting in industrial zones and economic zones.

2. Issue regulations guiding entry and exit, residence, temporary stay for economic zones and border economic zones.

Article 33. Powers and responsibilities for state management of the Ministry of Culture, Sports and Tourism

1. Guide the Management Board to perform state management tasks related to tourism activities in economic zones.

2. Delegate the Management Board to issue, reissue, amend, supplement and extend Representative Office Establishment Licenses and Branch Establishment Licenses for foreign tourism enterprises within economic zones.

Article 34. Powers and responsibilities for state management of sectoral ministries

In addition to the powers and responsibilities specified in Articles 24, 25, 26, 27, 28, 29, 30, 31, 32, and 33 of this Decree, other ministries and ministerial-level agencies shall have powers and responsibilities for state management over industries and sectors in industrial zones and economic zones as follows:

1. Review and provide written comments on the feasibility of conditions that investment projects must meet for investment projects under the Prime Minister's approval authority and conditional investment projects in industrial zones and economic zones as prescribed by investment laws.

2. Issue conditions, procedures, and organizational measures for the provision of administrative services by the Management Board.

3. Guide, inspect, supervise, conduct inspections, and impose administrative penalties within their jurisdiction.

Article 35. Powers and responsibilities for state management of provincial People's Committees

1. Lead the development of planning for industrial zones and economic zones within their territorial jurisdiction; decide on the establishment and expansion of industrial zones.

2. Organize the preparation of general construction plans for industrial zones as stipulated in Clause 3, Article 5 of this Decree and for economic zones.

3. Direct the preparation and approval of detailed construction plans for industrial zones and functional areas within economic zones; direct the review and approval of basic design for investment projects to develop infrastructure in industrial zones and functional areas within economic zones; decide on the use of state budget funds to support investors in investing in technical infrastructure systems within industrial zone boundaries.

4. Handle investment procedures for projects to develop infrastructure in industrial zones and functional areas within economic zones during the period before the Management Board is established.

5. Manage state affairs for investment projects in economic zones according to approved planning; submit for approval or approve within their authority the list of investment development projects and annual and five-year investment development plans in economic zones.

6. Enact specific preferential policies and incentives in accordance with relevant laws for the priority recruitment and utilization of local labor and highly skilled workers; support vocational training for workers in industrial zones and economic zones.

7. Plan land for resettlement areas, worker housing, and public service facilities; support investment in building worker housing, resettlement areas, and social infrastructure systems according to the State Budget Law; support investment promotion, trade, and tourism; support compensation and land clearance to accelerate the development of industrial zones and economic zones.

8. Direct the implementation of land recovery, water surface recovery, compensation, land clearance, and resettlement, and carry out leasing or land allocation procedures in industrial zones and economic zones in accordance with land laws and related laws.

9. Direct relevant organizations to prepare investment plans and construct technical infrastructure and social infrastructure outside the boundaries of industrial zones and economic zones such as roads, power supply systems, water supply and drainage systems, communication systems, technical connection points with infrastructure works inside the boundaries of industrial zones and economic zones, vocational training centers, housing, medical facilities, schools, and other public works to meet the needs of industrial zone and economic zone development.

10. Lead the formulation and balance of capital support for the construction of technical infrastructure within industrial zone boundaries and social infrastructure systems in economic zones according to investment laws, state budget laws, and provisions of this Decree.

11. Enact and monitor the implementation of the Regulation on coordination between the Management Board and provincial People's Committee agencies; guide, assign tasks or delegate the Management Board to perform certain state management tasks in construction, environmental protection fields as prescribed in sub-clause d and sub-clause h, Clause 2, Article 37 of this Decree.

12. Direct the implementation of planning, construction regulations, labor regulations, environmental protection, fire prevention, and public security in industrial zones and economic zones.

13. Organize and coordinate local vocational training institutions to meet labor demands in industrial zones and economic zones.

14. Organize, inspect, audit, and supervise the resolution of issues arising during the formation and development of industrial zones and economic zones; for issues exceeding their authority, coordinate with ministries and ministerial-level agencies to resolve them or submit to the Prime Minister for consideration and decision.

15. Develop proposals for establishing and restructuring Management Boards to ensure the principle that each province and centrally-administered city has one Management Board; decide on the appointment of personnel to the positions of Management Board Director and Deputy Director.

16. Provide administrative operation funds, public service funds, and development investment capital to the Management Board in accordance with the laws on state budget; approve plans, provide funds, and organize promotional activities for investment, trade, and tourism to develop industrial zones and economic zones.

17. Direct specialized agencies at the local level related to commerce, finance, customs, banking, police, and other relevant agencies to arrange authorized representatives to handle matters related to each zone when necessary.

18. Perform other state management tasks regarding industrial zones and economic zones as prescribed by law.

Chapter 5

FUNCTIONS, DUTIES, POWERS AND ORGANIZATIONAL STRUCTURE OF THE MANAGEMENT BOARD FOR INDUSTRIAL ZONES, EXPORT PROCESSING ZONES AND ECONOMIC ZONES

Article 36. Functions of the Management Board for Industrial Zones, Export Processing Zones, and Economic Zones

1. The Management Board is a subordinate agency under the Provincial People's Committee responsible for directly managing state administration over industrial zones and economic zones within the province or centrally-administered city according to this Decree and related laws; manage and organize the provision of administrative public services and other supporting services related to investment and business operations for investors in industrial zones and economic zones.

2. The Management Board is established by the Prime Minister's decision and is subject to guidance and management by the Provincial People's Committee regarding organizational structure, staffing, work programs, and annual operational budgets (except where the Prime Minister has provided otherwise); it is also subject to professional guidance and supervision by relevant ministries and sectors concerning its specific fields and areas; it is responsible for closely coordinating with specialized agencies under the Provincial People's Committee in the management of industrial zones and economic zones.

3. The Management Board has legal personality; its account and seal bear the national emblem; its administrative state management budget, public service activity budget, and development investment capital are provided annually from the state budget.

Article 37. Duties and Powers of the Management Board for Industrial Zones, Export Processing Zones, and Economic Zones

1. Participate in providing opinions, drafting, and submitting to relevant ministries, sectors, and the Provincial People's Committee for approval and implementation of the following tasks:

a) Participate in providing opinions with relevant ministries, sectors, and the Provincial People's Committee in the formulation of regulatory legal documents, policies, and plans related to investment and development activities in industrial zones and economic zones;

b) Lead and coordinate with relevant agencies in formulating regulations for working with specialized agencies under the Provincial People's Committee or related agencies to implement assigned tasks and powers through a single-window mechanism, submit to the Provincial People's Committee for approval and implementation;

c) Draft programs and plans for promoting investment and development in industrial zones and economic zones, submit to the Provincial People's Committee for approval and implementation;

d) Draft annual and five-year plans for developing human resources to meet the needs of industrial zones and economic zones, submit to the Provincial People's Committee for approval and implementation;

đ) Prepare the annual budget, public service activity funding, and development investment capital of the Management Board, submit to the competent authority for approval in accordance with the State Budget Law and related laws.

2. The Management Board shall perform tasks in accordance with the law and directives or delegations from relevant ministries, sectors, and the Provincial People's Committee:

a) Manage, disseminate, guide, inspect, supervise, investigate, and impose administrative penalties for violations related to the implementation of regulations, plans, and projects approved by competent state authorities concerning industrial zones and economic zones;

b) Register investments; review and issue, adjust, and revoke Investment Certificates for projects within their jurisdiction;

c) Issue, reissue, amend, supplement, and extend Business Registration Certificates for foreign organizations and traders establishing representative offices in industrial zones and economic zones; issue Business Licenses for activities involving the purchase and sale of goods and related direct activities for foreign-invested enterprises and first-time foreign investors in industrial zones and economic zones after receiving written approval from the Ministry of Industry and Trade;

d) Adjust detailed construction planning already approved for industrial zones and functional areas within economic zones without changing land use functions and planning structures; review basic design for projects classified as Group B or C, or issue and extend Construction Permits for construction projects requiring such permits according to the law on project management; issue Ownership Certificates for construction works in industrial zones and economic zones to relevant organizations;

đ) Issue, reissue, extend, and revoke Labor Permits for foreigners and overseas Vietnamese working in industrial zones and economic zones; issue labor books for Vietnamese workers in these zones; organize the implementation of labor regulations registration, collective labor agreements, safety and health regulations, labor safety regulations, wage scales, labor norms, and plans for sending workers abroad for training for less than 90 days for enterprises; receive reports on the signing, use, and termination of labor contracts by enterprises;

e) Issue various certificates of origin for products manufactured in industrial zones and economic zones and other permits, certificates, and certifications related to these zones;

g) Confirm contracts and real estate documents in industrial zones and economic zones for relevant organizations;

h) Organize the implementation of environmental impact assessment reports for projects within the jurisdiction of the Provincial People's Committee in industrial zones and economic zones.

i) Inspect, audit, supervise the implementation of investment objectives specified in the Investment Certificate, capital contribution progress, and project implementation; take the lead and coordinate to inspect and audit the fulfillment of commitments stipulated in investment incentives for projects and compliance with construction, labor, wage, social insurance laws for workers, protection of legitimate rights of workers and employers, activities of political-social organizations, fire prevention, security-order, ecological environment protection for industrial zones and economic zones; decide on administrative penalties according to regulations for violations within their jurisdiction and propose competent state management agencies to handle violations outside their jurisdiction;

k) Resolve difficulties and obstacles faced by investors in industrial zones and economic zones and recommend the Prime Minister, relevant ministries, sectors, and provincial People's Committees to resolve issues beyond their authority;

l) Receive statistical reports and financial statements of enterprises operating in industrial zones and economic zones; evaluate the effectiveness of investment in industrial zones and economic zones;

m) Coordinate with the Ministry of Planning and Investment in building and managing information systems for industrial zones and economic zones under their management;

n) Report periodically to the Ministry of Planning and Investment, relevant ministries, sectors, and provincial People's Committees on the situation: development and construction of industrial zones and economic zones; issuance, adjustment, and recovery of Investment Certificates; implementation and operation of investment projects; fulfillment of obligations to the State; attraction and utilization of labor; compliance with labor laws and resolution of labor disputes; implementation of environmental protection measures in industrial zones and economic zones;

o) Organize competitive movements and awards for enterprises in industrial zones and economic zones;

p) Organize and coordinate with state management agencies in auditing, inspecting, resolving complaints and denunciations, preventing and combating corruption, waste, and misconduct, and handling administrative violations within the zone;

q) Implement tasks as prescribed by law and regulations of provincial People's Committees regarding financial management, assets, budget; collect and manage the use of various fees and charges; conduct scientific research, apply scientific and technological advancements; cooperate with domestic and foreign organizations and individuals in areas related to investment, construction, and development of industrial zones and economic zones; manage organizational structure, staffing, cadres, civil servants, public officials, and provide training and professional development for cadres, civil servants, and public officials of the Management Board; introduce job opportunities for workers employed in industrial zones and economic zones;

r) Perform other tasks assigned by provincial People's Committees;

Article 38. Tasks and Authorities of the Economic Zone Management Board

In addition to the tasks and authorities of the Industrial Zone, Export Processing Zone, and Economic Zone Management Board as stipulated in Article 37 of this Decree, the Economic Zone Management Board also has the following tasks and authorities:

1. Develop and submit to the provincial People's Committee for submission to the Prime Minister for decision within their authority:

a) General planning for construction in the economic zone;

b) Bond issuance plans; plans to mobilize other sources of capital for investment in developing important technical infrastructure and social infrastructure in the economic zone.

2. Develop and submit for approval and implementation by relevant ministries, sectors, and provincial People's Committees:

a) Detailed planning for construction of functional areas consistent with the approved general planning for construction in the economic zone, detailed land use planning in the economic zone for approval by the provincial People's Committee;

b) Annual and five-year plans for economic zone development for approval by the provincial People's Committee and competent state agencies;

c) Lists of investment projects and annual and five-year development investment plans for approval by competent authorities or self-approval within their authority;

d) Establish price frameworks and fee rates applicable in the economic zone for issuance by competent authorities according to legal provisions.

3. The Economic Zone Management Board directs or organizes the implementation of tasks:

a) In accordance with laws and guidance or delegation from ministries, sectors, and provincial People's Committees including: issuing, adjusting, and recovering Business Registration Certificates according to the Enterprise Law for economic organizations established in the economic zone; issuing, reissuing, amending, supplementing, and extending Representative Office and Branch Licenses for foreign tourism enterprises in the economic zone;

b) Engage foreign consultants to provide investment promotion advisory services and strategic investment construction and development advisory services for the economic zone;

c) Decide on investment for Group B and C projects using state budget funds in the economic zone according to delegation from the provincial People's Committee;

d) Sign BOT, BTO, BT contracts for Group B and C projects according to delegation from the provincial People's Committee; directly receive, manage, and utilize ODA funds;

đ) Manage and use development investment funds in the economic zone within their authority; manage investment, construction, and bidding for projects funded by state development budgets in the economic zone within their authority; manage and implement administrative, public service, program target, and other allocated funds according to legal provisions;

e) Take the lead and coordinate with relevant agencies to maintain and repair technical infrastructure and social infrastructure systems, public service and convenience facilities invested in from the state budget in the economic zone;

g) Manage and utilize effectively the dedicated land and water funds that have been assigned in accordance with their intended purposes and in compliance with the Master Plan for Construction of the Economic Zone, Detailed Construction Plans for Functional Areas, Land Use Plans, and other plans that have been approved by competent authorities;

h) Transfer land with payment of land use fees, transfer land without payment of land use fees, lease land and water, and manage land within the economic zone in accordance with laws on land;

i) Based on regulations of the provincial People's Committee and laws on investment and land, decide on the amount of land use fees, lease fees, and exemptions or reductions applicable to dedicated land and water for each investment project when transferring land or leasing land without public auction or bidding for land use rights;

k) Coordinate with local authorities and relevant agencies to ensure all activities within the economic zone comply with the approved master plan, construction and development plans, and related regulations;

Article 39. Organizational Structure and Staffing of the Management Board

1. The Management Board consists of a Director, several Deputy Directors, and an administrative support staff.

The Director is appointed and relieved from duty by the Chairman of the Provincial People's Committee. Deputy Directors are appointed and relieved from duty by the Chairman of the Provincial People's Committee upon the recommendation of the Director.

2. The Director is responsible for overseeing all activities of the Management Board, and is accountable to the Provincial People's Committee and the law regarding the operation and effectiveness of the industrial park or economic zone.

3. The organizational structure of the Management Board includes: administrative support staff (Office, specialized and technical departments, and representatives of the Management Board at the industrial park or economic zone); affiliated units performing public welfare, public service, investment support, and business services for investors within the zone and other organizations in accordance with the development situation of the industrial park or economic zone and the duties and powers of each type of Management Board as stipulated in guidelines issued by the Ministry of Home Affairs and relevant laws.

The Management Board of the economic zone and the Management Board of the first-class industrial park and export processing zone may establish an Inspectorate according to the guidelines of the Ministry of Home Affairs.

4. The staffing of the Management Board includes administrative and public service positions, and is determined by the Chairman of the Provincial People's Committee in accordance with laws on the delegation of administrative and public service staffing management authority and mechanisms for managing public service staffing for state-owned units.

Chapter 6

IMPLEMENTING PROVISIONS

Article 40. Effectiveness of the Decree

1. This Decree shall take effect fifteen days after its publication in the Official Gazette.

2. This Decree abolishes:

a) Decision No. 53/2001/QĐ-TTg dated April 19, 2001 on policies for border gate economic zones and Decision No. 273/2005/QĐ-TTg dated October 31, 2005 amending and supplementing certain provisions of Decision No. 53/2001/QĐ-TTg;

b) Other provisions concerning industrial parks, export processing zones, and economic zones that conflict with this Decree;

Article 41. Responsibility for Implementation

Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of provincial and centrally-administered city People's Committees, Directors of industrial parks, export processing zones, and economic zones, and related organizations and individuals are responsible for implementing this Decree./.​