Vietnam possesses significant potential in agriculture, but to compete globally, it requires additional capital, technology, and smart investments. The government has introduced many attractive tax incentives for FDI enterprises investing in high-tech agriculture, such as corporate income tax exemptions, land rental reductions, and support for the importation of machinery and equipment.
DNP Viet Nam Law Firm is committed to providing detailed consultation on these incentive policies.
1. Conditions for enjoying investment incentives in agriculture:
1.1 Investment sectors eligible for incentives:
Legal basis: Point e, Clause 1, Article 16 of the Law on Investment 2020; Article 19, Section II, Appendix II of Decree 31/2021/ND-CP.
The investment sectors eligible for incentives include:
- Production of plant and animal breeds, and biotechnology products.
- Investment in high-tech agriculture.
- Agricultural services are applying advanced technology.
1.2 Investment projects must obtain an Investment Registration Certificate:
Legal basis: Article 38 of the Law on Investment 2020; Articles 35 and 36 of Decree 31/2021/ND-CP.
FDI enterprises must carry out investment registration procedures and obtain an Investment Registration Certificate, clearly specifying:
- Business lines eligible for investment incentives (Article 16, Law on Investment 2020).
- Scale, objectives, and location of the investment project.
1.3 Investment in areas with difficult or especially difficult socio-economic conditions:
Legal basis: Appendix III of Decree 31/2021/ND-CP.
FDI enterprises will enjoy tax incentives when investing in areas with difficult or especially difficult socio-economic conditions, typically remote areas such as the Northwest, Central Highlands, and Southwest regions of Vietnam.
1.4 Commitment to implementing the project according to schedule, scale, and objectives:
FDI enterprises investing in agriculture must:
- Fully fulfill financial obligations (Article 43 of the Law on Investment 2020).
- Comply with regulations on the environment, land, and labor.
- Maintain continuous project operation (Article 47 of the Law on Investment 2020).
2. Specific tax incentives:
2.1 Corporate Income Tax (CIT) incentives:
Legal basis: Articles 13 and 14 of the Law on Corporate Income Tax 2008.
| Tax rate | Applicable Income |
| 10% | Income from farming, processing agricultural products in areas with difficult socio-economic conditions. (Clause 2, Article 13) |
| 17% for 10 years | New investment projects include the manufacturing of agricultural machinery and equipment. (Clause 3, Article 13) |
| 15% | Cultivation, livestock farming, and processing in agriculture outside difficult or especially difficult areas. (Clause 3a, Article 13) |
| New investment projects include the manufacturing of agricultural machinery and equipment. (Clause 3, Article 13) | |
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2.2 Exemption of import duties on machinery, equipment, and materials:
Legal basis: Clauses 12 and 21, Article 16 of the Law on Export and Import Duties 2016.
FDI enterprises are exempt from import duties for:
- Plant varieties.
- Animal breeds.
- Fertilizers and pesticides that are not produced domestically.
- Machinery, equipment, and transportation means forming fixed assets for investment projects.
- Construction materials not produced domestically.
2.3 Exemption and reduction of land rental:
– Land rental exemption:
Legal basis: Point d, Clause 1, Article 39 of Decree 103/2024/ND-CP.
FDI enterprises are exempted from land rental for the entire lease term for land used for building headquarters, drying yards, warehouses, production plants, or service facilities directly supporting agricultural, forestry, aquaculture, and salt production.
– Land rental reduction:
Legal basis: Point d, Clause 1, Article 40 of Decree 103/2024/ND-CP.
A 50% annual land rental reduction is applicable for:
- Projects under the Public-Private Partnership (PPP) method in sectors and areas eligible for investment incentives.
- Projects located in areas with difficult or especially difficult socio-economic conditions according to investment laws.
3. Challenges and Recommendations:
While Vietnam is seen as a promising market for investment in agriculture, particularly high-tech agriculture, FDI enterprises still face numerous barriers during project implementation. These challenges stem not only from the legal system and technical infrastructure but also from human resources and unstable market output.
| Challenges | Recommended Solutions |
| – Complex administrative procedures and difficulties accessing land. – Limited availability of a highly skilled agricultural workforce. – Risks from weather and climate change. – Weak links in the value chain and unstable market output. | – Administrative reforms. – Training high-quality human resources. – Infrastructure and transportation development support. – Strengthen supply chain linkages. |
4. Conclusion:
Investing in high-tech agriculture in Vietnam offers significant potential and opportunities for FDI enterprises, particularly due to favorable tax, land, and development support policies. However, to maximize these advantages, enterprises must proactively adapt to the investment environment and collaborate closely with local authorities, farmers, and stakeholders to build sustainable production models. Overcoming challenges related to procedures, human resources, and infrastructure will help FDI enterprises contribute significantly to the modernization of Vietnam’s agriculture and enhance the global value chain of agricultural products.
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