Investment incentives in the Renewable Energy sector

On the 25th of November 2015, the Prime Minister of Vietnam adopted Decision 2068/QĐ-TTg "Approving the Vietnam’s Renewable Energy Development Strategy up to 2030 with an outlook to 2050", which sets out an ambitious plan for the country to achieve by 2050. This Decision states that the Renewable Energy share in total primary energy consumption shall be approximately 31% in 2020, 32.3% in 2030 and 44% in 2050. In order to achieve this goal the Vietnamese Government has established a set of incentives to attract investment in the sector of Renewable Energy, to encourage the develop of this sector and to use more energy from this sector.

On the national level, in addition to Decision 2068/QĐ-TTg, the Vietnamese Government has issued a corpus of laws which establish a legal framework for Renewable Energy in Vietnam, which among other regulations formulate incentives for investment in this sector. Those pieces of legislation are:

• Decision No. 37/2011/QĐ-TTg, Decision No.39/2018/QĐ-TTg and Circular No. 32/2012/TT-BCT on wind energy.
• Decision No. 24/2014/QĐ-TTg, Decision No. 942/QD-BCT and Circular No. 44/2015/TT-BCT on biomass power.
• Decision No. 31/2014/QĐ-TTg and Circular No. 32/2015/TT-BCT on solid-waste power.
• Decision No. 11/2017/QĐ-TTg and Circular No. 16/2017/TT-BCT on solar power.
• Decision No. 39/2018/QĐ-TTg, Circular No. 32/2012/TT-BCT and Circular No. 96/2012/TT-BTC on wind power.

Those are the incentives set out by the Vietnamese Government in order to foster investments in the Renewable Energy sector in Vietnam:

• Investors are entitled to land use fee exemptions for a period of 11 years and 15 years if the investment is done in a rural area. In addition, during the construction of the plant or facility, investors are entitled to land and water surface lease exemptions.
• Corporations can be entitled to a reduction in corporate income taxes (CIT). A CIT of 10 percent is applicable for renewable energy producers for the first 15 years. Investors can also be entitled to CIT exemptions under certain conditions.
• CIT exemptions and incentives applicable to projects in other investment priority sectors shall be applicable to projects in the Renewable Energy sector.
• Investors are entitled to exemption from import duties for imported materials, equipment and facilities aim to become part of the Renewable Energy project.
• Foreigners, investing in the Renewable Energy sector, are entitled to 100% foreign ownership of Vietnamese companies.
• Solar power projects, transmission lines and substations connected to the power grid are exempted from or subject to the same reduced land-use fees, land lease and water surface lease as those applicable to projects in other investment priority sectors.

In addition to the above-mentioned incentives, each Renewable Energy project is and shall be reviewed individually and can benefit from a special treatment depending on the individual characteristics of each project. More that, depending on the location of the investment, the project can benefit from additional incentives determined by the provincial administration.

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