Introduction of Nghi Son Economic Zone

INSTRODUCTION OF NGHI SON ECONOMIC ZONE

Nghi Son Economic Zone (Nghi Son EZ) was established by the Prime Minister in Decision No. 102 /QD-TTg on 15/5/2006, located in the south of Thanh Hoa Province, on the north – south axis of the country, 200 km south of Hanoi, is a bridge between the Northern region with Central, North West and Southern regions, with the market in southern Laos and northeastern Thailand.

NATURAL AND SOCIAL CONDITIONS OF Nghi Son EZ:

1. The potential and geographic location: Nghi Son Economic Zone (EZ Nghi Son) has a natural area of 18,611.8 hectares located south of Thanh Hoa province, on the north – south axis of the country, 200 km south of Hanoi, is a bridge between the Northern region with Central, North West and Southern regions, with the market in southern Laos and northeastern Thailand. Nghi Son port has the potential to develop into one of the largest sea port in the country with the capacity to receive vessels up to 50,000 DWT tonnage, loading capacity up to hundreds of million tons/year. To achieve the objective of developing a multidisciplinary EZ attracting heavy industries and basic industries such as petrochemical, high-grade steel rolling, thermal power, building materials, production and processing of consumer goods use and exports… the Government of Vietnam has issued and applied the highest preferential policies for investors.
2. Climate: The average annual temperature is 23 – 40C, average air humidity of 85-86%, average annual rainfall of 1,833 mm.
3. Topography: The terrain is diverse, including: The uplands, lowlands and coastal areas, in which plain accounts for 60% of the total area.
4. Population and labor: The total population of Thanh Hoa province is about 3.5 million people, including labor force of 2.1 million people. Nghi Son EZ population is over 80,000 people, including workforce of about 45,000 people. Workforce of Thanh Hoa province is largely young workers, who have been educated to lower and upper secondary school, having the ability to acquire technical and scientific training to become skilled workers. Thanh Hoa’s educational system and training is quite comprehensive with all levels and majors of education. In Nghi Son EZ, Vocational School of Nghi Son is in operation and Technology Vocational College Licogi is being built to meet the training needs for thousands of technical workers.

To meet the demand for human resources for EZ, Nghi Son Economic Zone Management Board is now developing the Nghi Son Economic Zone Initiative of training, human resource development in 2015-2025 to send to the Government for approval.

1. SOCIAL & TECHNICAL INFRASTRUCTURE
2. The transport system:

– Road: Located on north – south transport axis of Vietnam, Nghi Son Economic Zone can be accessed by 1A and the north – south national highway located west to Highway 1A. It has systematic continuous road traffic between areas in the province and with the region. The transport axis links the center urban zone to industrial zones and Nghi Son Port, the East-West axis links Nghi Son port with the north-south highway. Currently, Thanh Hoa province is urgently investing to build Nghi Son EZ route away from Tho Xuan airport, about 60km.

– Railways: National railway runs through Nghi Son Economic Zone with the 15km length, including Khoa Truong Station planned to be upgraded into EZ Central Station:

+ From Hanoi Railway Station to Khoa Truong Station: 200km.

+ From HCMC Station to Khoa Truong Station: 1.500km.

– Sea Port: Nghi Son Port has built and put into operation the dedicated terminal of Nghi Son Thermal Power Plant I, Nghi Son Cement Plant, and 03 synthesize berths capable to accommodate vessels up to 30,000 DWT tonnage , handling capacity of 5 million tons /year. In addition, there are now dozens of synthetic harbors, ports and container terminals with dedicated synthetic logistic parks begin to be constructed by the investors.

From Nghi Son port location:

Ø to Hai Phong port: 119 nautical miles.

Ø to the port of Ho Chi Minh City: 700 nautical miles.

Ø to the port of Hong Kong: 650 nautical miles.

Ø to the port of Singapore: 1280 nautical miles.

Ø to the port of Tokyo: 1900 nautical miles.

– Aviation: Tho Xuan Airport with standard 4E is 60 km from Nghi Son EZ. Currently, Vietnam Airlines is operating flight route Thanh Hoa – Ho Chi Minh City with a frequency of 02 flights / day. Under the approved plan, the Tho Xuan airport will be upgraded into international airports to meet the development needs of the Nghi Son EZ and serve the travel needs of people in the province and in the region.

2. Electricity:

– Nghi Son EZ is using National grid including the North-South 500 kV transmission line and 220 KV Thanh Hoa – Nghe An, existing substation 220/110/22 kV – 250 MVA, ensuring sufficient power supply to demand and domestic production.

– Nghi Son EZ is planned to develop into a major power center with a total capacity of 2.400MW by the government. In particular, the Nghi Son thermal power plant  of 600 MW in capacity will be completed and generate in the first quarter of 2014. The Nghi Son Thermal Power Plant II, capacity of 1,200 MW invested by the Marubeni Corporation (Japan) and Kepco (Korea) in BOT form is expected to begin the construction in the late 2014. Thermal power plant Cong Thanh with capacity of 600 MW has been leveling by the investors.

3. Water supply:

– Raw water: Raw water taken from Yen My Lake (87 million m3) and Song Muc Lake (200 million m3) by a system of raw water pipeline. Phase 1 pipeline provides water to Dong Chua lake with capacity of 30,000 m3/day has been completely constructed and put into operation. Phase 2 pipeline with capacity of 90,000 m3/day is being invested from ODA, scheduled for completion in 2015.

– Clean water: There are two water supply plants including Factory in Dong Chua Lake built in phase I and water supply capacity of 30,000 m3/day; Phase II to increase capacity to 90,000 m3 / day and the plant in the west of the Highway 1A, capacity of 20,000 m3/day is under construction, scheduled for completion in 2015.

4. Telecommunication services:

Telecommunication Network Infrastructure – Information Technology of Nghi Son Economic Zone has been planned for development with various types of advanced services, broadband, high-speed and modern technology; having the ability to meet the demand for telecommunications services – information technology with the highest quality for the customers.

III. SOCIAL INFRASTRUCTURE

The comprehensive system of schools, hospitals, commercial services, hotel – tourism… has been planned synchronically. A number of projects are under construction, such as eco-tourism zone of Nghi Son island, tourist and service resort of Nghi Son North Island, General services Complex and public services in the north of Xuoc mountain, Licogi’s technology vocational college, residential area for workers, commercial banks, insurance services … to meet the needs of housing, education, and entertainment of officials, experts and people in the EZ Nghi Son.

1. PLANNING:
2. On 10/10/2007, the Prime Minister has approved the general planning construction of Nghi Son Economic Zone in Decision No. 1364 / QD-TTg. So far, all the functional areas have been approved detailed planning 1/2000, including important areas such as:
3. Nghi Son Port: The Ministry of Transport approved detailed planning in Decision No. 1401 / QD-BGTVT on 26/5/2010. The total planned area is 2,020 hectares, in which 916.8 hectares is the land, and1103.2 ha is waters. Nghi Son Port is planned including synthetic wharf, container and special-purpose berths capable of receiving ships 30000-50000 DWT, loading capacity of 80 million tons/year.
4. The Industrial zones:

– A petrochemical complex: Planned area is 504 ha; of which 394 ha is ground plant in Phase 1 (including factory area, the terminal and the pipeline), 110 hectares planned for phase expanding capacity to 20 million tons/year.

– Nghi Son Thermal Power Center: Planned area 347 ha, including premises Nghi Son 1 thermal power plant, Nghi Son Thermal Power Plant 2 and the specific-purpose port (20 ha);

– Concentrated industrial zones: such as industrial zone 1 (241.29 hectares), Industrial zone No. 2 (128.37 ha), Industrial zone No. 3 (247.12 ha), Industrial zone 4 (385.24 ha), Industrial zone No. 5 (462.87 ha), metallurgical Industrial zone (473.60 ha).

1. Other functional areas:

– Urban centers: 1613.28 ha;

– Urban Area No. 3: 572.2 ha;

– The Public Service Center: 38.70 ha;

– Eco-tourism Zone of Nghi Son island: 100 hectares;

– Truong Lam Solid Waste Plant: 40.03 ha;

– North Xuoc Mountain Public Service Area: 14.58 ha.

There are also other functional areas approved detailed planning, such as residential areas, resettlement area, golf courses…

2. Expansion plan orientation of Nghi Son EZ:

Implementing the policy of the Prime Minister, Thanh Hoa province is working out the adjustment and expansion proposal of Nghi Son EZ to be approved before 2015, including the whole region of Tinh Gia and 5 districts of Nong Cong and Nhu Thanh communes, with a total area of about 64,000 ha, of which:

– The area of approximately 12 510 hectares of urban land;

– The area of approximately 6485 hectares of industrial land;

– Tourism area of 500 hectares of land;

1. INVESTMENT POLICY INCENTIVES:
2. 2. Land rent, water rent: The rent and water surface rent bracket stipulated by Thanh Hoa Provincial People’s Committee issued and stable for many years.

The maximum rental period is 70 years, expired on possible extension if investor demands.

2. Exemption from land rent, water rent:

2.1. Exemption from land rent and water surface rent during construction; free from 11 to 15 years after the project goes into operation, depending on the field of project sectors.

2.2. Exemption from land rent and water surface rent during project implementation for projects in the field of special investment incentives stipulated by the Government.

3. Corporate income tax: Applicable to the income of business from the implementation of new investment projects.

3.1. Nghi Son EZ: Application of the preferential tax rate of 10% within 15 years, 04-year tax exemption and 50% tax for the next 09 years.

3.2. For investment projects to expand production scale, enhance capacity, technological innovations (which meet the criteria prescribed by the Decree 218/2013/ND-CP dated 26/12/2013 stipulating and guiding the implementation of the Law on corporate income tax) is open to tax preferential option under active projects for the remainder (if any), exempt or reduce the income tax on the increased head expansion brings. Tax holidays, reduced tax on additional income due to expanded investment by tax holidays, tax reduction applies to new investment projects.

4. Export Tax and Import Tax

Depending on the field of project sectors, investors receive incentives:

– Tax exemption for goods imported to create fixed assets and means of transport in the serving line technology investment, vehicle carrying workers…

– Import tax exemption for a period of 5 years, since the project go into production for the production of raw materials, supplies, components and semi-finished products which Vietnam cannot be manufactured or manufactured with substandard quality.

5. Personal Income Tax

Reduce 50% income tax on income subject to income tax, including Vietnam and foreigners working in the EZ.

6. Other policies

6.1. Policy on prices:

Applying the policy of one price for goods, services and land rent for investors who are institutions and individuals, regardless of domestic and foreign production activities, trading in Nghi Son Economic Zone.

6.2. Switching losses:

Investors after the tax settlement with the tax authorities that loss shall be carried forward to the subsequent year losses; this loss amounts is deducted from the taxable income of enterprise income tax in accordance with the provisions of Law business income. Loss forward time does not exceed 5 years.

6.3. Depreciation of fixed assets:

Investment projects in Nghi Son EZ are applied faster depreciation of assets for fixed assets; the maximum depreciation rate is twice the depreciation according to asset depreciation regime.

7. Policies of Thanh Hoa support for investment projects in industrial zones 3, 4, 5 – Nghi Son EZ:

Provincial budget support 10% of leveling expenses based on the settlement record appraised by the Board of Management of the Nghi Son Economic Zone. The level of support must not exceed 500 million/01 ha.