Letter of December 2009

Letter from Dung Quat Economic Zone Authority

December 2009

In Dung Quat Economic Zone now, there have been 111 projects licensed with total registered capital of approximately US$ 7.7 billion, 13 of which are 13 FDI projects, with total registered capital of US$ 3.4 billion; another 28 projects capitalized at US$ 2.7 billion have been approved to be invested. 51 projects are now in operation, with a combined implemented capital reaching US$ 4.1 billion, while 21 other projects are under construction. Since 2006, 50% of state revenues of Quang Ngai province come from Dung Quat EZ. Our Economic Zone’s contribution to the state budget is estimated to be  around VND 3 trillion in 2009 and nearly 10 trillion in 2010.

With an aim to rapidly develop the key economic region of Central Vietnam, the Prime Minister promulgated in 2005 the Decision No. 50/TTg to establish Dung Quat EZ and regulate its operational regime, and Decision No. 72/2005/QD-TTg to set up our Dung Quat Economic Zone Authority (DEZA) and regulate our functions, duties, powers and organizational structure. According to these institutional regimes, the vision for Dung Quat EZ is as follows:

·       Dung Quat to become a multi-portfolio, multi-disciplinary economic zone, with the driving pillars being oil refining,  petrochemical, chemical industries and large-scaled heavy industries including shipbuilding, steel, cement production, container production; and other sectors of consumer goods, cargos for export etc,

·       Dung Quat deep seaport, Chu Lai airport and industrial-service urbans of Van Tuong and Doc Soi are core supporting elements of Dung Quat development,

·       Dung Quat to gradually play the role as the driving force for the growth and become the industrial-service hub of the key economic region of Central Viet Nam, which stimulates the industrialization and modernization of Central region and the whole country,

·       Dung Quat to become a major hub for international and regional trade and transactions.

In Dung Quat EZ, a coherent system of infrastructure and social amenities have been built up to meet the requirements of existing investors and to attract more domestic and foreign investment. Many large-scale projects have been completed and are now in commercial operation, such as Dung Quat Oil Refinery, Doosan-Vina Heavy Industries Complex, Dung Quat Shipyard which is going to finish and launch a 100,000-DWT vessel.

Dung Quat EZ, which covers an area of 10,300 hectares, is strategically located for convenient international and regionally exchange and transactions. Under the official consent of the Prime Minister, the Quang Ngai Province in collaboration with Ministry of Construction are proceeding with a master plan to expand Dung Quat EZ from current area of 10,300 ha to 46,000 ha, in association with construction of a new seaport (Dung Quat Port II) to meet the requirement of an open economy. 

With reference to the institutional regulations mentioned above, investors in Dung Quat will enjoy the preferential policies at the highest level that the law of Vietnam defines, as follows: 

·       Corporate income tax (CIT) rate of 10% shall be applicable within 15 years from the date of production and business commencement

·       CIT shall be exempt for the first 04 taxable years and reduced by 50% of payable  tax for the 09  years thereafter

·       As for high-technology projects and large-scale ones which promises  economic – social significance in the region, CIT rate of 10% shall be applicable for  the entire project life-time, subject to the consideration and approval of the Prime Minister (practically, Doosan Vina and Guang Lian projects in Dung Quat have enjoyed this special incentive).

·       There are some other preferential policies such as:  land rental exemption/reduction, special import tariffs for commodities purchased to form fixed assets, reduction of personal income tax and a number of specific policies provided by Quang Ngai province to protect the rights and the business opportunities of the investors.

In addition, DEZA are conducting the reform on the investment procedures to simplify them so that the investors can benefit more from the "one-stop-shop" public services provided by DEZA and Quang Ngai province. A so-call “Investment Assistance Team” under DEZA has been set up to provide guidance, support and consultancy to investors.

With good performance and considerable achievements during the past time, DEZA were granted with the certificate of "Viet Nam Brand in 2008" and selected as "One of the best 500 Viet Nam brands in 2009" by the Association of Science and Technology of Viet Nam. DEZA also received the “Second-class Labor Medal” awarded by the State President; and relevant authorities are considering awarding the “First-class Labor Medal” to DEZA in recognition of our efforts and achievements in the construction and development of Dung Quat EZ.

In the ongoing global economic integration process, DEZA are committed ourselves to affording favorable conditions for the investment and business activities of investors in Dung Quat which are beleived to contribute to the construction and development of the Key Economic Region of Central Vietnam.

It would be our pride and honor to have your business presence in Dung Quat.

With our warm thanks and sincere regards,

Dung Quat Economic Zone Authority