THE GOVERNMENT

DECREES:

Article 1.- To amend and supplement a number of articles and Appendix 1 of the Government’s Decree No. 24/2000/ND-CP of July 31, 2000 detailing the implementation of the Law on Foreign Investment in Vietnam (hereinafter referred to as Decree No. 24/2000/ND-CP) as follows:

1. Article 1 is amended and supplemented as follows:

quot;Article 1.- Scope of application:

This Decree details the implementation of the November 12, 1996 Law on Foreign Investment in Vietnam, the June 9, 2000 Law Amending and Supplementing a Number of Articles of the Law on Foreign Investment in Vietnam (hereinafter referred collectively to as the Law on Foreign Investment in Vietnam).

This Decree governs foreign direct investment activities in Vietnam, including activities of introducing capital in cash or any other assets by foreign investors into Vietnam for directly conducting production and/or business activities in order to earn profits in the forms prescribed by the Law on Foreign Investment in Vietnam.

All foreign direct investment activities in Vietnam must comply with the provisions of the Law on Foreign Investment in Vietnam, this Decree and other legal documents.quot;

2. Clause 2 of Article 2 is amended and supplemented as follows:

quot;2. Domestic medical examination and treatment, educational, training and scientific research establishments which satisfy the conditions prescribed by the Government.quot;

3. Article 6 is amended and supplemented as follows:

quot;Article 6.- The form of business cooperation contract

1. A business cooperation contract is a document concluded between two or more parties for investment and business in Vietnam, which defines the responsibility of and the division of business results to, each party, without setting up a new legal person.

Foreign-invested enterprises are entitled to cooperate with foreign organizations and/or individuals to perform business cooperation contracts.

2. Business cooperation contracts in the field of prospection, exploration and exploitation of oil and gas as well as a number of other natural resources in the form of production-sharing contract shall comply with relevant law provisions and the Foreign Investment Law.quot;

4. Article 11 is amended and supplemented as follows:

- To add the following second paragraph to Clause 1:

quot;Joint-venture enterprises include enterprises with 100% foreign capital already established in Vietnam which enter into joint ventures with the subjects defined at Points b, c and e, Clause 2 of this Article.quot;

- To amend Section e and add Section f, Clause 2 as follows:

quot;e/ Joint venture enterprises;

f/ Enterprises with 100% foreign capital.quot;

5. Article 21 is amended and supplemented as follows:

quot;Article 21.- Form of enterprises with 100% foreign investment capital

1. Enterprises with 100% foreign investment capital are those under the ownership of foreign investors and established in Vietnam by foreign investors who manage the enterprises themselves and take responsibility for the business results.

Enterprises with 100% foreign investment capital already established in Vietnam are entitled to cooperate with one another and/or with foreign investors to establish new enterprises with 100% foreign investment capital in Vietnam.

2. Enterprises with 100% foreign investment capital are established in form of limited liability companies, which have the legal person status under the Vietnamese laws, are set up and operate from the date they are granted the investment licenses.quot;

6. Article 31 is amended and supplemented as follows:

quot;Article 31.- Reorganization of enterprises

1. The division, separation, merger, consolidation of enterprises, the change of investment forms (hereinafter referred collectively to as reorganization of enterprises) must be approved by the investment-licensing agencies according to the following contents and procedures:

a/ quot;Enterprise divisionquot; means the division of the whole capital in cash and assets of a foreign-invested enterprise (called divided enterprise) to establish two or a number of new enterprises (called dividing enterprises).

b/ quot;Enterprise separationquot; means the transfer of part of capital in cash and assets of a foreign-invested enterprise (called separated enterprise) to establish two or a number of new enterprises (called separating enterprises).

c/ quot;Enterprise mergerquot; means the transfer of the whole capital in cash and assets of one or a number of foreign-invested enterprises (called merged enterprises) to another foreign-invested enterprise (call merging enterprise) for merger into the latter.

d/ quot;Enterprise consolidationquot; means the consolidation of the whole capital in cash and assets of two or a number of foreign-invested enterprises (called consolidated enterprises) to form a new foreign-invested enterprise (called consolidating enterprise).

e/ quot;Change of investment formsquot; means the transformation of a project already granted investment license in one form prescribed by the Foreign Investment Law into another investment form prescribed by the Foreign Investment Law.quot;

The reorganization of enterprises must be consented by the Managing Boards (for joint-venture enterprises), or foreign investors (for enterprises with 100% foreign capital), or business cooperation parties (for business cooperation contracts).

Reorganized enterprises shall have to compile dossiers according to the provisions in Clauses 2 and 3 of this Article and submit them to the investment licensing agencies for readjustment of their investment licenses and/or establishment of new foreign-invested enterprises according to the provisions of the Foreign Investment Law. In cases they are converted into Vietnamese enterprises, they shall have to make registration according to one of enterprise types specified in Clause 1, Article 2 of this Decree.

2. A dossier applying for the reorganization of an enterprise includes:

a/ An application for reorganization of the enterprise;

b/ The dossier on capital transfer (for cases of capital transfer);

c/ The resolution of the Managing Board of the joint-venture enterprise or the decision of the investor (for enterprises with 100% foreign capital);

d/ The new enterprise’s charter (except the case of conversion into a Vietnamese enterprise) or the amended and supplemented enterprise charter;

e/ The joint-venture contract of the new enterprise or the amended and supplemented joint-venture contract;

f/ The contract on merger or consolidation between enterprises;

g/ The report on the enterprise’s operation and financial status before the reorganization;

h/ The exposition on the reorganization of the enterprise;

i/ The documents related to the land use right;

j/ Other documents when requested by the investment licensing agencies.

3. The exposition on the enterprise reorganization shall contain the following principal contents:

a/ Name and address of the representative at law; names and addresses of the enterprises before and after the enterprise reorganization;

b/ Production and business objectives;

c/ The labor employment plan;

d/ The plan on settlement of the rights and obligations of the enterprises before and after the enterprise reorganization;

e/ The time limit for the enterprise reorganization.

4. Decisions on enterprise reorganization shall be notified to the creditors and laborers within 15 days after they are approved.

5. Within 30 working days after the receipt of complete and valid dossiers, the investment licensing agency shall issue a decision to approve the enterprise reorganization in form of granting the investment license. In case of disapproval, the investment licensing agency must clearly justify in writing the reasons therefor. In cases where reorganized enterprises satisfy the conditions prescribed in Article 105 of this Decree, the procedures for registering for the investment licensing shall be carried out.quot;

7. Article 32 is amended and supplemented as follows:

quot;Article 32.- Inheritance of rights and obligations after the enterprise reorganization

1. After being reorganized and granted the investment licenses, the new enterprises shall inherit all the rights and obligations of the former enterprises, unless otherwise agreed upon by the involved parties and approved by the investment licensing agencies. These rights and obligations shall be exercised and performed according to the plans on settlement of enterprise rights and obligations stated in the enterprise reorganization expositions defined in Clause 3, Article 31 of this Decree.

2. Depending on fields, geographical areas, scales and conditions of investment by the reorganized enterprises, the preferences for enterprises after their reorganization shall be automatically applied according to the corresponding provisions of current law.

3. The reorganized enterprises shall publicly announce the establishment and operation termination according to the provisions in Articles 27 and 28 of this Decree.quot;

8. Article 46 is amended and supplemented as follows:

- Point b, Clause 1 is amended and supplemented as follows:

quot;b/ The production projects other than the project types specified in Clauses 2 and 3 of this Article.quot;

- Point d, Clause 2 is amended and supplemented as follows:

quot;d/ Production enterprises in industrial parks.quot;

- Point d, Clause 3 is amended and supplemented as follows:

quot;d/ Enterprises developing infrastructure in industrial parks, export processing zones and hi-tech parks; export-processing enterprises in the production field.quot;

- To add the following paragraph to the end of Clause 3:

quot;Preferences provided for at Point a, Clause 3 of this Article shall not apply to production projects in industrial parks with the product export percentage of under 50%, except for cases where the said projects satisfy two of the conditions prescribed at Points a, b and e, Clause 2 of this Article.quot;

- To add following Clause 7:

quot;7. In cases where foreign-invested enterprises or business cooperation contracts invest in many fields and/or many geographical areas with different preferential enterprise income tax rates and make separate accounting, they shall be entitled to preferences according to each field or geographical area. In cases where they cannot make separate accounting, the preferences shall apply according to the investment capital ratio.quot;

9. Clause 2 of Article 48 is amended and supplemented as follows:

quot;2. The projects mentioned in Clause 2, Article 46 of this Decree shall enjoy the enterprise income tax exemption as follows:

a/ Production enterprises in industrial parks having a product export percentage of under 50% and failing to satisfy the conditions prescribed at Points a, b and e, Clause 2 of Article 46, shall enjoy the enterprise income tax exemption for 2 years after their business activities yield profits.

b/ The projects not mentioned at Point a, Clause 2 of this Article shall enjoy enterprise income tax exemption for 2 years after the profits are generated from their business activities and 50% reduction for the subsequent 3 years.quot;

10. Article 57 is amended and supplemented as follows:

- Clauses 5 and 6 are amended and supplemented as follows:

quot;5. Foreign-invested enterprises and business cooperation parties investing in projects on the list of fields in which investment is particularly encouraged or in geographical areas with particularly difficult socio-economic conditions specified in Appendix enclosed with this Decree shall be exempt from import tax on production raw materials, supplies and assembly parts for 5 years after the commencement of production.

6. Foreign-invested enterprises and business cooperation parties investing in the production of mechanical, electrical and/or electronic assembly parts and spare parts shall be exempt from import tax on production raw materials, supplies and assembly parts for 5 years after the commencement of production.quot;

- To add the following Clause 10 to the end of Article 57:

quot;10. The Ministry of Trade shall coordinate with the concerned ministries and branches in promulgating documents guiding the detailed classification of raw materials, supplies and assembly parts, which are exempt from import tax for 5 years after the commencement of production as specified in Clauses 5 and 6 of this Article.quot;

11. Article 59 is amended and supplemented as follows:

quot;Article 59.- Import tax calculation prices

Prices for calculation of import tax on import goods shall comply with the provisions in Article 1 of the Government’s Decree No. 60/2002/ND-CP of June 6, 2002 prescribing the determination of tax calculation prices of import tax according to the principles of the Agreement on Implementation of Article 7 of the General Agreement on Tariff and Trade.quot;

12. Clauses 1 and 3 of Article 67 are amended and supplemented as follows:

quot;1. Foreign-invested enterprises and foreign business cooperation parties are entitled to purchase foreign currencies at the banks licensed to deal in foreign currencies so as to meet their current transactions and other permitted transactions according to the legislation on foreign exchange management.quot;

quot;3. The Vietnamese Government secures the support in balancing foreign currencies for foreign-invested enterprises and business cooperation parties investing in infrastructure construction and a number of other important projects in cases where the banks licensed to deal in foreign currencies fail to fully meet the foreign currency demands mentioned in Clause 1 of this Article.quot;

13. Paragraph 1, Clause 2 of Article 81 is amended and supplemented as follows:

quot;2. The value of the transferred technologies used for capital contribution shall be agreed upon by the parties.quot;

14. Clause 1 of Article 83 is amended and supplemented as follows:

quot;1. Foreign-invested enterprises and business cooperation parties are entitled to directly recruit Vietnamese and foreign laborers according to the provisions of the labor legislation.quot;

15. Article 84 is amended and supplemented as follows:

quot;Article 84.- Wages paid to Vietnamese laborers

The minimum wage level and wages of Vietnamese laborers working in foreign-invested enterprises and business cooperation parties shall comply with the regulations of the Ministry of Labor, War Invalids and Social Affairs and be paid in Vietnam dong.quot;

16. Article 85 is amended and supplemented as follows:

quot;Article 85.- Land lease and payment of land rent and land use tax

1. Foreign-invested enterprises and business cooperation parties shall be leased land by the Vietnamese State for execution of investment projects and shall have to pay land rents according to the regulations of the Finance Ministry.

2. In cases where Vietnamese parties contribute capital with the value of the right to use the land, which has been transferred by other parties or assigned by the State with the collection of land use levy, and the already paid money amounts for the transfer or land use levy amounts do not originate from the State budget, such land shall not have to be converted into leased land. The Vietnam parties shall have to pay land use tax according to the current law provisions.quot;

17. Article 88 is amended and supplemented as follows:

quot;Article 88.- Competence to decide on land lease

The provincial-level People’s Committees shall decide the land lease to foreign-invested projects according to the provisions of the land legislation.quot;

18. Article 89 is amended and supplemented as follows:

quot;Article 89.- Compensation, ground clearance and land lease dossiers

1. In case of land lease by the Vietnamese State, the People’s Committees of the provinces where exist investment projects shall have to organize the compensation, ground clearance and complete the land lease procedures. The expenses for compensation and ground clearance shall be accounted into the projects’ investment capital. The provincial-level People’s Committees shall negotiate with the enterprises which are leased land on the financial sources for effecting the compensation and ground clearance.

2. Where the Vietnamese party contributes capital with the land use right value, it shall have to make the compensation, clear the ground and complete the procedures for the land use right. The expenses for the compensation and ground clearance shall be accounted into the contributed capital of the Vietnamese party or agreed upon by the involved parties.

3. The compensation unit price shall comply with the common regulations of the State.

4. For investment projects licensed by the provincial-level People’s Committees, the land lease consideration shall be carried out simultaneously with the investment licensing consideration.

5. For investment projects licensed by the Ministry of Planning and Investment, the land-related documents enclosed with dossiers of application for investment licenses shall include the following contents:

a/ The location and area of the land plot to be used;

b/ The land rent rate proposed by the provincial-level People’s Committees on the basis of the land rent bracket set by the Finance Ministry;

c/ The compensation and ground clearance plan.

6. Land lease and sub-lease procedures and dossiers shall comply with the guidance of the Ministry of Natural Resources and Environment.quot;

19. Article 92 is amended and supplemented as follows:

quot;Article 92.- Mortgage of land use right value and assets affixed to land

1. Foreign-invested enterprises may mortgage the land use right value and assets affixed to land during the land lease or sublease terms at the Vietnamese credit institutions licensed to operate in Vietnam according to the provisions of law in the following cases:

a/ The foreign-invested enterprises have already paid the land rent for many years, if the paid land lease term remains for at least 5 years;

b/ The joint-venture enterprises to which the Vietnamese parties contribute capital with the land use right value, if the duration of capital contribution with the land use right remains for at least 5 years.

2. The mortgaged land use right value includes expenses for compensation and ground clearance and paid land rent minus the land rent already paid for duration in which the land was used.

3. The dossiers and procedures for mortgaging land use right value shall comply with the guidance of the Ministry of Natural Resources and Environment and the State Bank of Vietnam.quot;

20. Article 95 is amended and supplemented as follows:

quot;Article 95.- Appraisal of planning and architectural schemes

For investment projects in the field of construction of bridges, roads, air fields and ports; industrial projects of group A; infrastructures of industrial parks, export processing zones and hi-tech parks; urban centers, tourist resorts and entertainment and recreation centers; works for art performance; advertisement works; residential houses, hotels, offices and apartments; schools; hospitals; and sport facilities, their investment license application dossiers must be enclosed with the projects’ general ground planning drawings.

The appraisal of the projects’ planning and architectural scheme shall be implemented in the process of appraising the investment projects.quot;

21. Clause 1 of Article 98 is amended and supplemented as follows:

quot;1. The investors are held responsible before the Vietnamese law for the quality and safety of construction works; fire and explosion prevention and fighting; environmental protection; labor safety and sanitation during the period of project construction as well as throughout their use duration.quot;

22. Article 105 is amended and supplemented as follows:

- Point b, Clause 1 is amended and supplemented as follows:

quot;b/ They are in line with the approved branch development or product plannings. In cases where such plannings are not yet approved, consents of the branch-managing ministries are required.quot;

- Clause 2 is amended and supplemented as follows:

quot;2. Apart from the conditions prescribed in Clause 1 of this Article, the projects subject to investment licensing registration shall have to satisfy one of the following conditions:

a/ Having the export product rate of 80% or more;

b/ Investing in industrial parks outside group A but on the list of fields in which investment is particularly encouraged or the list of fields in which investment in encouraged;

c/ Belonging to the production fields with the investment capital of up to USD 5 million.quot;

23. Article 106 is amended and supplemented as follows:

quot;Article 106.- Registration for granting of investment licenses

1. A dossier of registration for granting of investment license includes:

a/ An application of registration for investment licensing;

b/ The joint-venture contract and charter of the joint-venture enterprise or the charter of the enterprise with 100% foreign capital or the business cooperation contract;

c/ The documents certifying the legal status and financial situation of the parties.

2. The dossier of registration for investment licensing shall be made in 5 sets, including at least 1 original, which shall all be submitted to the investment licensing agency.

3. The investment-licensing agency shall examine dossiers of application for investment-licensing registration and grant investment licenses without having to consult opinions of any other agencies if all the conditions and procedures prescribed in Articles 105 and 106 of this Decree are satisfied.

4. Within 15 working days after the receipt of valid dossiers, the investment-licensing agency shall notify its decisions on approval in form of investment licenses.

5. The Ministry of Planning and Investment shall promulgate documents guiding the compilation of project dossiers of registration for investment licensing.quot;

24. Clause 2 of Article 112 is amended and supplemented as follows:

quot;2. The ministries, branches and provincial-level People’s Committees shall consult with the Ministry of Planning and Investment before promulgating according to their respective competence legal documents related to foreign direct investment activities; in case of divergence of opinions, it must be reported to the Prime Minister for consideration and decision. The provincial-level People’s Committees must not promulgate regulations on tax and financial preferences as well as other preferences which are beyond their competence.quot;

25. Article 113 is amended and supplemented as follows:

quot;Article 113.- Coordination of State management activities

1. The ministries, branches, provincial-level People’s Committees and investment-licensing agencies in the banking, insurance, securities and legal consultancy fields shall exercise the State management and observe the coordination regime in the work of managing foreign investment activities.

2. The provincial-level People’s Committees shall have to promptly handle matters falling under their respective competence and guide enterprises to operate in strict compliance with provisions of their investment licenses and law. In the course of handling, if the ministries, branches and provincial-level People’s Committees have divergent opinions on the same matter, they must report such to the Prime Minister for consideration and decision.

3. The Ministry of Planning and Investment shall sum up and provide information on the foreign investment situation to the ministries, branches and provincial-level People’s Committees, periodically work according to the briefing regime with the Ministry of Finance, the Ministry of Trade, the Ministry of Natural Resources and Environment, the State Bank and the concerned provincial-level People’s Committees in order to handle in time arising matters as well as proposals of foreign-invested enterprises, business cooperation parties and put forward policies and measures to improve the investment environment.quot;

26. Point a, Clause 1 of Article 114 is amended and supplemented as follows:

quot;1. The Prime Minister shall decide on group A projects, including:

a/ Projects, regardless of their investment capital amounts, in various fields:

- Construction of infrastructures in industrial parks, export-processing zones, hi-tech parks, urban centers; BOT, BTO and BT projects;

- Seaport and airport construction and business; sea shipping and air transport business;

- Petroleum activities;

- Postal and telecommunications services;

- Publication; printing service (except for projects on printing of technical documents, packages, goods labels, common patterns on textile and garment products, leather shoes), press; radio and television; advertising services in association with advertisement distribution, cinematographical activities; art performance; dealing in games with prizes; medical examination and treatment establishments; general education and training at college, university, postgraduate and equivalent levels; scientific research; production of curative medicines for human use;

- Insurance, finance, audit and expertise;

- Prospection and exploitation of precious and rare natural resources;

- Construction of residential houses for sale;

- Defense and security projects.quot;

27. Clause 2 of Article 115 is added with following sections d and e:

quot;d/ Projects in the field of culture, education and training;

e/ Construction and commercial operation of department stores.quot;

28. Clause 1 of Article 116 is amended and supplemented as follows:

quot;1. To base themselves on the approved socio-economic development plans to coordinate with the concerned ministries and branches in working out and publicly announcing the planning and the list of projects calling for foreign investment capital in their respective localities after reaching agreement with the Ministry of Planning and Investment; to organize the investment mobilization and promotion.quot;

29. Article 117 is amended and supplemented as follows:

- Point a, Clause 1 is amended and supplemented as follows:

quot;1. The Ministry of Planning and Investment shall act as the main body in settling matters arising in the process of promoting, forming, deploying and executing investment projects, including:

a/ Guiding and coordinating with the ministries, branches and provincial-level People’s Committees in drawing up the planning, plans and lists of national projects calling for foreign investment; working out programs and plans on investment promotion; proposing the appointment of their officials and setting up of representative offices of the investment promotion organizations in regions and countries with potentials of investment in Vietnam to the Prime Minister; conducting investment promotion activities.quot;

- To add following Clause 3:

quot;3. The Ministry of Planning and Investment shall join and coordinate with the Ministry of Justice in regularly revising legal documents concerning foreign investment activities, proposing to the competent agencies amendments and/or supplements to or annulment of legal documents contrary to the provisions of the foreign investment legislation and other legal documents of higher legal effect.quot;

30. Clause 3 of Article 121 is amended and supplemented as follows:

quot;3. The current regulations which are more preferential than the previous corresponding regulations shall automatically be applied. The investment-licensing agencies shall, at the requests of investors, readjust investment licenses to entitle the investors to the preferences as from the effective date of the current legal documents providing for such preferences.quot;

31. Clause 3 of Article 123 is amended and supplemented as follows:

quot;3. The criteria, conditions and procedures for commendation shall comply with the Government’s regulations on emulation and commendation.quot;

32. Points a and b, Clause 1 of Article 3; Point a, Clause 2, Point b, Clause 3 and Point a, Clause 4 of Article 46; Clause 4 of Article 48; Clause 8 of Article 57; Clause 4 of Article 79; Clause 3 of Article 81; Clauses 2 and 4 of Article 82; Clause 2 of Article 87; Article 90; Clause 3 of Article 113; and Point c, Clause 1 of Article 117 are amended and supplemented as follows:

- At Points a and b, Clause 1 of Article 3; Point a, Clause 2, Point b, Clause 3 and Point a, Clause 4 of Article 46; Clause 4 of Article 48; and Clause 8 of Article 57, the phrase quot;the list of projects in which investment is particularly encouragedquot; is replaced by the phrase quot;the list of fields in which investment is particularly encouraged,quot; and the phrase quot;the list of projects in which investment is encouragedquot; is replaced by the phrase quot;the list of fields in which investment is encouragedquot;;

- At the ending paragraph in Clause 4 of Article 79, the phrase quot;the General Department of Customsquot; is replaced by the phrase quot;the Ministry of Financequot;;

- At the ending paragraph in Clause 3 of Article 81; Clauses 2 and 4 of Article 82; and Point c, Clause 1 of Article 117, the phrase quot;the Ministry of Science, Technology and Environmentquot; is replaced by the phrase quot;the Ministry of Science and Technologyquot;;

- In Clause 2 of Article 87 and Clause 3 of Article 113, the phrase quot;the General Land Administrationquot; is replaced by the phrase quot;the Ministry of Natural Resources and Environmentquot;;

- In Article 90, the term quot;time limitsquot; is replaced by the term quot;time points.quot;

33. Appendix 1 of Decree No. 24/2000/ND-CP is amended and supplemented by the Appendix enclosed with this Decree.

Article 2.- Implementation provisions

1. This Decree takes effect 15 days after it is published on the Official Gazette. The previous stipulations contrary to this Decree are all hereby annulled.

2. The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the presidents of the People’s Committees of the provinces and centrally-run cities shall have to guide the implementation of this Decree.

On behalf of the Government
Prime Minister
PHAN VAN KHAI

APPENDIX I

I. LIST OF FIELDS IN WHICH INVESTMENT IS PARTICULARLY ENCOURAGED

- Production or processing with 80% or more of the products for export;

- Processing of agricultural products, forest products (excluding timber) or aquatic products from domestic raw materials, with 50% of the products for export;

- Production of new varieties and breeds with high quality and economic efficiency;

- Agricultural farming, forestation, aquaculture;

- Manufacture of high-class steel, alloys, non-ferrous metals, special metals, steel casts, porous iron; metallurgy of pig iron;

- Manufacture of machines, equipment, detail assemblies in fields of oil and gas exploitation, mining, energy; manufacture of large-size lifting and lowering equipment; manufacture of machine tools for working metals and metallurgical equipment;

- Manufacture of medical instruments for use in analytical technology and extracting technology in medicine;

- Manufacture of equipment for testing toxins in foodstuffs;

- Production of new materials, rare and precious materials; application of new bio-technologies; new technologies for manufacture of information and telecommunication equipment;

- Production of information technology products;

- Hi-tech industries;

- Investment in research and development (R amp; D) which accounts for 25% of turnover;

- Manufacture of waste-treating equipment;

- Pollution treatment and environmental protection, waste treatment;

- Production of antibiotics raw materials;

- Investment under BOT, BTO or BT contracts.

II. LIST OF FIELDS IN WHICH INVESTMENT IS ENCOURAGED

- Exploration, exploitation and intensive processing of minerals;

- Production or processing with 50% or more of products for export;

- Production or processing with 30% or more of the products for export and with the use of large percentages of domestic raw materials and materials (valued at from 30% or more of the production cost);

- Fields with regular employment of 500 laborers or more;

- Processing of farm produce, forest products (excluding timber from domestic natural forests), aquatic products from domestic raw material sources;

- Preservation of foods; post-harvest preservation of farm produce;

- Development of petro-chemical industry; construction and operation of oil and gas pipelines, depots, ports;

- Manufacture of precision mechanical tools, safety check and inspection equipment; manufacture of molds for metal and non-metal products;

- Manufacture of medium- and high-voltage electric equipment;

- Manufacture of diesel engines through advanced technologies and techniques; manufacture of dynamic and hydraulic machines and spare parts, compressors;

- Manufacture of automobile and motorbike spare parts; manufacture and assembly of construction equipment, machines and vehicles; manufacture of technical equipment for transport service;

- Shipbuilding; manufacture of ship propellers, equipment and spare parts for freighters and fishing ships;

- Manufacture of information and telecommuni-cations equipment;

- Manufacture of electronic components and equipment;

- Manufacture of agricultural and forestry equipment, spare parts and machines, irrigation and drainage equipment;

- Manufacture of textile and garment equipment;

- Production of assorted insecticide raw materials;

- Production of assorted insecticides, plant protection drugs and veterinary drugs with a domestic added value ratio of 40% or more;

- Production of base chemicals, pure chemicals, dyes and special-use chemicals;

- Production of cleansing raw materials, chemical additives;

- Production of special-type cement, composite materials, sound-proof, electric-insulated and heat-resistant materials, wood substitute composite materials, refractory materials, construction plastic, glass fibers;

- Production of light construction materials;

- Production of paper pulp;

- Production of silk, assorted yarns and special fabric for industrial use;

- Production of high-class raw materials for production of export footwear and garments;

- Production of high-class packages for export goods;

- Production of raw materials of medicines and curative drugs for human use up to the international GMP standards;

- Improvement and development of energy sources;

- Mass transit;

- Construction and renovation of bridges, land roads, railways, airports, harbors, railway stations and car terminals;

- Construction of water plants, water supply and drainage systems;

- Construction- commercial operation of infrastructures of industrial parks, export processing zones and hi-tech parks.

- Technical services for agriculture, forestry and fishery.

IV. LIST OF FIELDS WITH CONDITIONAL INVESTMENT

1. Conditions on investment form:

1.1. Investment only in form of business cooperation contracts and the Vietnamese parties are specialized units licensed to conduct business in the following fields:

- Establishment of public telecommunications networks, provision of telecommunications services; commercial provision of domestic and international mail services;

- Press, radio and television activities.

1.2. Investment only in form of business cooperation contracts or joint-venture enterprises:

- Exploitation and processing of oil, gas, rare and precious minerals;

- Air, rail and sea transport; mass transit, construction of harbors and airports (excluding BOT, BTO and BT projects);

- Provision of maritime and aviation services;

- Culture (excluding projects for printing of technical documents, packages, goods labels, patterns on textile and garment products, leather shoes; drawing of cartoon scenes with computer-aid drawing techniques; entertainment, recreation and sport centers);

- Forestation (excluding the indirect forestation through Vietnamese organizations, households and individuals assigned or leased land under productive or protective forests by the State and provided supports in capital, seedlings, techniques, fertilizers by investors, that shall collect and purchase products under contracts);

- Tour business;

- Production of industrial explosives;

- Consulting services (excluding technical consultancy);

2. Conditions that projects must be linked to the investment in creation of raw material sources:

- Dairy production and processing;

- Vegetable oil and cane sugar production;

- Timber processing (excluding projects using imported timber).

3. Projects for investment in import services or domestic distribution services and projects for offshore fishing and marine product exploitation shall comply with the Prime Minister’s regulations.

V. LIST OF FIELDS NOT LICENSED FOR INVESTMENT

1. Projects which are detrimental to the national security, defense and public interests.

2. Projects which cause harms to the historical and cultural monuments, Vietnamese fine traditions and customs.

3. Projects which cause harms to the ecological environment; projects on treatment of hazardous wastes brought from overseas into Vietnam.

4. Production of toxic chemicals or use of hazardous agents banned under international treaties.-