Our Newsletter #22 would lead you on the following:
LEGAL UPDATE
I. Issuance of Decree No. 32/2024/ND-CP on management and development of Industrial Clusters
On 15 March 2024, the Government approved Decree No. 32/2024/ND-CP on the management and development of industrial clusters, which will take effect from 01 May 2024, with the following noteworthy new provisions:
1. Business lines, and business and production establishments are encouraged to invest in and relocate to industrial clusters
- An industrial cluster (“IC”) is a place in which industrial production activities are carried out and services are provided for industrial and cottage-industrial production, with defined geographical boundaries and without any inhabitant living in the cluster, and which is constructed to attract and relocate small and medium-sized enterprises, cooperatives and cooperative associations to conduct production and business activities.
- Business lines, and business and production establishments encouraged to invest in and relocate to IC include:
- Processing and manufacturing industries supporting agriculture; mechanical industry (such as: automobiles, agricultural machines, construction equipment, industrial equipment, electrical equipment, medical equipment, etc.); textile and apparel and footwear industry;
- Information technology and communications, electronics industry; biotechnology;
- Warehousing services, packaging, transport of goods, repair and maintenance of machinery, industrial equipment directly serving local industrial and cottage-industrial production;
- Industrial and cottage-industrial production establishments which cause pollution or are likely to cause pollution in craft villages and populated areas; and
- Other industrial sectors as specified in Decree 32/2024/ND-CP
Accordingly, Provincial People’s Committees shall specify business lines, and business and production establishments in IC in conformity with the IC development plan under the provincial planning and local socio – economic development orientation. Such industries shall be stated in the Decision on establishment or expansion of IC.
2. Investment procedures for construction of IC infrastructure
- An investment construction project (“ICP”) of IC infrastructure is an investment project that uses land to synchronously build technical infrastructure of an IC; and land which is leased out or subleased to investors for execution of production and business investment projects, and for operating and managing IC infrastructure.
- The ICP of IC infrastructure shall be made following the basic sequence below:
- Step 1: Prepare and approve a report on investment in the establishment or expansion of the IC, and other investment procedures (if any).
- Step 2: Formulate and approve detailed planning for IC construction.
- Step 3: Set up and approve the ICP of IC infrastructure and procedures for investment project preparation.
- Step 4: Organize construction of technical infrastructural constructions, and manage and operate such technical infrastructural construction after their completion.
3. Organizations and individuals investing in production and business activities within IC
Organizations and individuals investing in IC shall follow the procedures for leasing land associated with common technical infrastructure. The land lease shall meet the environmental protection requirements of the investor.
For an IC in which the investor is not an enterprise, cooperative or organization conducting investment and business activities as the investor, organizations and individuals investing in these IC must lease land in accordance with the regulations of the land law.
3.1. Rights of organizations and individuals investing in production and business activities within IC
Organizations and individuals investing in production and business in IC have several important rights, including:
- Use land and have land-use term extended in accordance with regulations of law on land; sublease a piece of land, a factory, warehouse, office and property on such land in accordance with law;
- Advance or contribute capital to construct and commercially operate technical infrastructure by agreement with the technical infrastructure investor;
- Receive assistance in recruiting and training employees to meet production and business requirements; and
- Receive incentives and assistance prescribed in this Decree and law and enjoy other rights in accordance with relevant regulations of law.
3.2. Obligations of organizations and individuals investing in production and business activities within IC
Organizations and individuals investing in production and business activities within IC must ensure the fulfillment of several important obligations, including:
- Submitting periodic reports on the project’s activities of the IC. The periodic reports must be sent concurrently to the local statistics authority and the district-level People’s Committee to manage;
- Using land, implementing the investment project, conducting production and business in accordance with the content of the economic contract with the investor in the ICP of IC infrastructure, and in accordance with the content of the Decision on Approval of Investment Guidelines and the Investment Registration Certificate (if any);
- Participating actively in attracting labor and creating jobs in the locality, giving priority to employees who are policy beneficiaries and households whose land has been expropriated for construction of the industrial cluster; and
- Paying fees for the use of infrastructure, public services and other utilities as agreed.
4. Policies for Incentives and Development Support for IC
IC is located in areas with difficult socio-economic conditions; the ICP of IC infrastructure is a specially incentivized industry.
The application of incentives for the ICP of IC infrastructure, business and production investment projects in IC is carried out in accordance with the provisions of land, tax and credit laws, and other relevant laws. If the law stipulates different levels of incentives, the highest level of incentive will be applied.
The state supports up to 30% of the total investment capital for CP of IC infrastructure. The support funding is not included in the total investment of the project to calculate the sublease land price or infrastructure usage fees for investment projects in IC.
II. National Energy Development Strategy of Vietnam to 2030, with a vision to 2045
On 01 March 2024, the Prime Minister issued Decision No. 215/QD-TTg approving the National Energy Development Strategy of Vietnam until 2030, with a vision to 2045 (referred to as the “Energy Development Strategy”), with some notable contents as follows:
1. Some Specific Development Objects of Energy Development Strategy
- By 2023, the reliability of electricity supply will be in the top 4 of leading Asian countries, the electricity access index will be in the top 3 of leading Asian countries;
- Oil refineries will meet at least 70% of national gasoline and oil demand. There will be sufficient capacity to import liquefied natural gas (LNG), approximately 15-20 billion cubic meters by 2023 and 10-15 billion cubic meters by 2045;
- Reducing greenhouse gas emissions from energy activities compared to the scenario of naturally developed energy by 15-35% by 2023, and increasing to 70-80% by 2045; and
- The proportion of renewable energy in total primary energy should be 15-20% by 2023 and 65-70% by 2045.
2. Some important development orientations of the electricity industry
- Gradually reducing the proportion of coal-fired energy, prioritizing the development of domestic electrification, and developing imported liquefied natural gas with an appropriate scale;
- The 500kV transmission grid plays a vital role in connecting regional power systems and exchanging electricity with neighboring countries. Minimizing the construction of new interregional transmission lines before 2023;
- Promoting the construction of GIS substations, 220/22 kV substations, and underground substations at the central electrical load;
- After 2023, the orientation is to develop one-way ultra-high-voltage transmission lines connecting the Central, South Central, and Northern areas to strongly exploit the potential of offshore wind power; and
- Implementing power grid connections with Laos using 500 kV, 220 kV transmission lines to import electricity from electric factories in Laos according to the memorandum of cooperation signed between the two Governments.
3. Some important development orientations for the new and renewable energy industry
- Encouraging and prioritizing the use of wind and solar energy for electricity generation to maximize the replacement of fossil fuel energy sources;
- Encouraging investment in the construction of power factories using urban waste, biomass and solid waste;
- Developing a technology roadmap for the production and use of hydrogen fuel and hydrogen-derived fuels; fuel cells for transportation and other purposes;
- Researching, developing, and promulgating the policies and legal regulations for the business type of Energy Service Company (ESCO); and
- Additional research and refining specific mechanisms and sanctions for monitoring electricity usage plans for high-energy consumption facilities (including key energy users) and promoting efficient and economical energy use.
III. Missions of credit institutions during implementation of monetary policy in 2024
On 02 May 2024, the Prime Minister issued Directive No. 14/CT-TTg on implementing the mission of administering the 2024 monetary policy, focusing on removing difficulties for production and business, and promoting growth and the macroeconomy. This directive has some notable content about missions and works of credit institutions as follows:
- Continue to reduce costs, strive to reduce lending interest rates at reasonable levels;
- Publicly and transparently disclose average lending interest rates to facilitate businesses and the public in choosing banks with low interest rates that meet their credit use requirements;
- Increase lending for life and consumption, promote lending through online and electronic forms;
- Promote the implementation of certain programs, projects and policies, such as the VND120,000 billion program for social housing loans, worker housing, and renovation of old apartments; and
- Continue to implement the policy of rescheduling debt payment terms and maintaining debt groups according to Circular No. 02/2023/TT-NHNN dated 23 April 2023.
The above is not official advice from BLawyers Vietnam. If you have any questions or suggestions about the above, please contact us at info@blawyersvn.com. BLawyers Vietnam would love to hear from you.
Date: 30 May 2024
Writer: BLawyers Vietnam
Legal News and Update Team
PUBLISHED ARTICLES
- 04 important notes on procedures for registration of security interests when mortgaging land-use rights, property on land
- 7 new points in the draft circular on factoring service
- Multi-language contracts and 02 notes about mitigating the risk of disputes arising from use of multiple languages
- 03 practical notes on GDP Certificate procedures under Vietnamese law
DIGITAL AUDIO PROGRAM
PUBLISHED LEGAL NEWSLETTERS
CONTACT US
✍ Legal News and Update Team
📩 legalnews@blawyersvn.com
For Downloading:
Maybe you are interested in reading other Newsletters of BLawyers Vietnam: Legal Newsletter in Jan 2024/ Legal Newsletter in Feb 2024/ Legal Newsletter in Mar 2024
