BINH DINH PROVINCE SOCIALIST REPUBLIC OF VIETNAM

PEOPLE'S COMMITTEE Independence - Freedom - Happiness

No.: 124/2005/QD-UBND Quy Nhon, 22 November 2005

DECISION

Promulgating the Regulation on a number of policies

to encourage investment in Nhon Hoi Economic Zone, Binh Dinh Province

THE PROVINCIAL PEOPLE'S COMMITTEE

Pursuant to the Law on Organization of the People's Council and People's Committee dated 26 November 2003;

Pursuant to Decree No. 51/1999/ND-CP dated 8 July 1999 of the Government providing detailed regulations on the implementation of the Law on Encouragement of Domestic Investment (revised) and Decree No. 35/2002/ND-CP dated 29 March 2002 of the Government amending and supplementing Lists A, B and C issued with Decree No. 51/1999/ND-CP;

Pursuant to Decree No. 24/2000/ND-CP dated 31 July 2000 of the Government providing detailed regulations on the implementation of the Law on Foreign Investment in Vietnam and Decree No. 27/2003/ND-CP dated 19 March 2003 of the Government amending and supplementing a number of articles of Decree No. 24/2000/ND-CP;

Pursuant to Decree No. 164/2003/ND-CP dated 22 December 2003 of the Government providing detailed regulations on the implementation of the Law on Corporate Income Tax;

Pursuant to Decision No. 141/2005/QD-TTg dated 14 June 2005 of the Prime Minister on the establishment and issuance of the Regulation on the operation of Nhon Hoi Economic Zone;

Pursuant to the Official Letter No. 12189/BTC-NSNN dated 27 September 2005 of the Ministry of Finance on the reward rate for the organizations and individuals who promote and attract investment into Nhon Hoi Economic Zone;

Pursuant to the Conclusion No. 204-KL/TU dated 20 July 2005 of the Standing Committee of the Provincial Communist Party Committee (16^th Tenure) at their abnormal Session;

Considering the proposal of Nhon Hoi Economic Zone Administration,

DECIDES:

Article 1. To issue with this Decision the Regulation on a number of policies to encourage investment in Nhon Hoi Economic Zone, Binh Dinh Province.

Article 2. The Chairman of Nhon Hoi Economic Zone Administration shall be responsible for guiding, monitoring, supervising and inspecting the implementation of the Regulation issued with this Decision.

Article 3. This Decision shall come into effect 10 days after its signing date.

The Head of the Office of the Provincial People’s Committee, the Chairman of Nhon Hoi Economic Zone Administration, the Directors of the Department of Planning and Investment, Department of Finance, Department of Natural Resources and Environment, Department of Construction, Department of Industry, Department of Taxation, the Heads of the concerned departments, agencies and units, Chairman of the People's Committee of Quy Nhon City and Chairpersons of the People’s Committees of the Districts of Tuy Phuoc and Phu Cat, and the investors in Nhon Hoi Economic Zone shall be responsible for implementing this Decision.

ON BEHALF OF

THE PROVINCIAL PEOPLE'S COMMITTEE

CHAIRMAN

(Signed and stamped)

VU HOANG HA

BINH DINH PROVINCE SOCIALIST REPUBLIC OF VIETNAM

PEOPLE'S COMMITTEE Independence - Freedom - Happiness

REGULATION

On a number of policies to encourage investment

in Nhon Hoi Economic Zone, Binh Dinh Province

(Issued with Decision No. 124/2005/QD-UBND dated 22 November 2005

of the People's Committee of Binh Dinh Province)

CHAPTER I

GENERAL PROVISIONS

Article 1. This Regulation is aimed to concretize a number of investment preferential policies provided for in the Regulation on the operation of Nhon Hoi Economic Zone (Nhon Hoi EZ) issued with Decision No. 141/2005/QD-TTg dated 14 June 2005 of the Prime Minister and the current assisting policies of the People’s Committee of Binh Dinh Province in order to facilitate and encourage domestic and foreign investors to make investment in Nhon Hoi EZ, Binh Dinh Province.

Article 2. The qualified beneficiaries of the investment encouraging policies in this Regulation are those prescribed in the Law on Encouragement of Domestic Investment or Law on Foreign Investment in Vietnam who directly invest in Nhon Hoi EZ, Binh Dinh Province.

Article 3. Investment projects in Nhon Hoi EZ shall be entitled to the investment preferences provided for in the Regulation on the operation of Nhon Hoi EZ issued with Decision No. 141/2005/QD-TTg dated 14 June 2005 of the Prime Minister and be treated as those in the areas with specially difficult socio-economic conditions stipulated by the Law on Foreign Investment in Vietnam, Law on Encouragement of Domestic Investment, Law on Business Income Tax and other related laws.

Article 4. A number of terms used in this Regulation are defined as follows:

- List A means the list of industries and trades included in the fields entitled to investment preferences in accordance with the Law on Encouragement of Domestic Investment (appendix attached hereto).

- Functional zones in Nhon Hoi EZ include the non-tariff zone, industrial zones, port areas, tourist areas and urban areas.

- Regulation 141 means the Regulation on the operation of Nhon Hoi EZ issued with Decision No. 141/2005/QD-TTg dated 14 June 2005 of the Prime Minister.

Article 5. Binh Dinh Province assures the stable implementation of its investment encouraging policies and shall, in case of any change of the provincial policies which may cause disadvantage to investors, provide adequate assistance to investors so that they could enjoy preferences during the remaining time.

CHAPTER II

INVESTMENT PREFERENTIAL POLICIES

Article 6. Land price in Nhon Hoi EZ:

1. The investors who invest in the functional zones (except the urban areas) in Nhon Hoi EZ shall be entitled to enjoy the lowest rough land lease price in accordance with the current regulations issued periodically by the People’s Committee of Binh Dinh Province.

2. Single price policy on rough land rent shall be applied to domestic and foreign organizations.

Article 7. Exemption of land rent:

1. For investment projects in accordance with the Law on Foreign Investment in Vietnam, the provisions of Decision No. 189/2000/QD-BTC dated 24 November 2005 of the Ministry of Finance shall apply. The details are given below:

- Land rent shall be exempt during the time of capital construction.

- Land rent shall be exempt in 11 years as from the construction work is completed and the project starts its operation.

2. For investment projects in accordance with the Law on Encouragement of Domestic Investment, the provisions of Decree No. 51/1999/ND-CP dated 8 July 1999 of the Government providing detailed regulations on the implementation of the Law on Encouragement of Domestic Investment (revised) and Decree No. 35/2002/ND-CP dated 29 March 2002 of the Government amending and supplementing the Appendix issued with Decree No. 51/1999/ND-CP dated 8 July 1999 of the Government shall apply. The details are given below:

- Land rent shall be exempt for projects not included in List A.

- Land rent shall be exempt for the whole implementation duration of the project for projects included in List A.

Article 8. Specific investment preferential policy:

1. All the investment projects in Nhon Hoi EZ of the domestic and foreign organizations and individuals shall be entitled to the preference on the rate of business income tax and other taxes in accordance with the provisions prescribed at clauses 1 and 2 of Article 14 of Regulation 141.

2. Projects in high-tech sectors matching the provisions prescribed at clause 2 of Article 5 of the Regulation on high-tech park issued with Decree No. 99/2003/ND-CP dated 28 August 2003 of the Government shall be entitled to the rate of business income tax of 10% for the whole implementation duration of the project, specifically including:

- Information technology, communications and computer software technology;

- Bio-technology serving agricultural, aquaculture and medical sectors;

- Microelectronic, fine mechanical, mechanical-electronic, optical-electronic and automatic technologies;

- New material technology and nano technology;

- Environmental technology and new energy technology;

- Some other special technologies specified by the competent agencies.

3. Investment projects having large scale and key significance to the development of a sector or field or to the socio-economic development of the province and the whole region with the scale of USD100 million or higher which matches one of the following criteria shall be submitted by the People’s Committee of Binh Dinh Province to the Prime Minister to be considered and approved to enjoy the rate of business income tax of 10% for the whole implementation duration of the project:

- Investment in building sea port or infrastructure of industrial zone or non-tariff zone;

- Employing 2,000 workers or more;

- Producing direct export turnover from USD100 million per year or more.

Article 9. Investment assisting policy:

1. Assistance in compensation for loss, land clearance and resettlement:

Assistance with 100% expenses for compensation for loss, land clearance and resettlement shall be given from the state budget to the households whose land areas are recovered for the implementation of investment projects (these expenses can be advanced by the investors and shall be deducted from the land rent).

2. Assistance in technical infrastructure:

- Investors who invest and operate the infrastructure of the functional zones shall be supplied with electricity and water at the boundaries of the functional zones.

- Assistance with 100% expenses for the construction of concentrated waste water treatment plant and solid waste treatment land fill of the functional zones shall be given from the state budget.

3. Assistance in trade promotion:

Investors who have made investment in Nhon Hoi EZ shall be assisted with expenses in participating in trade fairs or exhibitions abroad once a year for the first two year applicable to new products; the maximum assisted amount for each case shall not exceed VND100 million.

Article 10. Investors shall be guided and provided free of charge with necessary information by the concerned functional agencies in the process of investigating and formulating investment projects, except for compulsory charges or fees prescribed in the current regulations of the State.

Article 11. Reward to organizations and individuals who have merit in investment promotion and attraction:

Organizations and individuals who have merit in mobilizing, promoting or attracting foreign direct investment or domestic projects into Nhon Hoi EZ (except enterprises operating infrastructure of industrial zones, non-tariff zone and other functional zones promoting and calling investment into their own operation areas) shall be rewarded at the specific rates as follows:

- For projects with investment capital from USD1 million to under USD5 million: VND30 million to be rewarded;

- For projects with investment capital from USD5 million to under USD10 million: VND50 million to be rewarded;

- For projects with investment capital from USD10 million to under USD20 million: VND100 million to be rewarded;

- For projects with investment capital from USD20 million or higher: VND200 million to be rewarded.

Half of the above reward amount shall be paid upon completion of the required investment procedures and the construction work of the project starting; the remaining half shall be paid upon the completion of the construction work and the project starting its operation.

CHAPTER III

ADMINISTRATIVE PROCEDURES FOR INVESTMENT

Article 12. “One-door, at the spot" mechanism shall be implemented for Nhon Hoi EZ. Investors in Nhon Hoi EZ shall only contact directly the contact agency, Nhon Hoi EZ Administration, for being guided and assisted in timely handling the procedures of project formulation and implementation in accordance with the current regulations by the State of Vietnam.

The process of investment licensing and administrative procedure handling in Nhon Hoi EZ shall be announced in public at the contact agency and at the provincial concerned functional agencies.

The concerned functional agencies shall be responsible for preparing in full the necessary information and documents and co-operating in timely handling the related administrative procedures at the request of the contact agency or the investors within a time limit of not more than 03 working days.

The investors shall be exempt from any related expenses or charges in the process of handling procedures of investment in Nhon Hoi EZ, except the fees prescribed in the current regulations of the State.

CHAPTER IV

IMPLEMENTATION PROVISIONS

Article 13. The provincial state management agencies shall be responsible for providing timely guidance and assistance in the related administrative procedures or works in order to create favourable conditions for investors to implement their projects early.

Any organization or individual assigned with tasks related to the provisions of this Regulation who are discovered corrupting or troubling the investors shall be administratively punished or criminally prosecuted subject to the nature or extent of violation or held responsible for compensating if causing any loss of or damage to the investors in accordance with the current law regulations.

Article 14. The preferences not mentioned in this Regulation shall be applied in accordance with the current regulations of the State of Vietnam, Regulation 141 and other related regulations of the People's Committee of Binh Dinh Province.

Nhon Hoi EZ Administration shall be responsible for monitoring the implementation of this Regulation and recommending timely amendment thereof or addition thereto where necessary./.

ON BEHALF OF

THE PROVINCIAL PEOPLE'S COMMITTEE

CHAIRMAN

(Signed and stamped)

VU HOANG HA

APPENDIX: LIST A

(Extracted from Appendix of Decree No. 35/2002/ND-CP dated 29 March 2002)

Attached to Decision No. 124/2005/QD-UBND dated 22 November 2005

of the People’s Committee of Binh Dinh Province

INDUSTRIES AND TRADES INCLUDED IN THE FIELDS ENTITLED TO INVESTMENT PREFERENCES

Investment projects in the following industries and trades shall be entitled to preferences:

I. Afforestation or forest regeneration zones; planting of perennial trees on unused land or barren hills; land reclamation, salt-making, cultivation of marine products in unexploited waters:

1. Planting of and caring for forests;

2. Planting of long-term industrial crops and fruit trees on fallow land or barren hills;

3. Land reclamation for the purpose of production of agriculture, forestry and fishery.

4. Making, exploiting and refining salt;

5. Cultivation of marine products in unexploited natural waters.

II. Construction of infrastructure; development of public transportation; development of education, training, health care and traditional cultures:

1. Investment in new construction of power plants, power distribution and transmission, construction of facilities using power generated by sun, wind or bio-gases;

2. Investment in new construction of water mills and water supply systems for industrial and living purposes; investment in construction of water drainage systems;

3. Investment in new construction or modernization of road bridges, airports, harbours, stations, bus stops, parking spaces; construction of additional railway routes;

4. Construction of infrastructure for concentrated residential areas in the regions included in List B or List C of Decree 35/2002/ND-CP;

5. Development of public transportation: investment in means of railway transportation, road transportation of passengers by automobiles of 17 seats or over, waterway transportation of passengers by motored vehicles;

6. Investment in provision of internet connection services, provision of internet access services, provision of internet application services in the regions included in List B or List C of Decree 35/2002/ND-CP; mail services and parcel services;

7. Establishment of semi-private, people-founded and private schools at the pre-school, pre-tertiary, specialized secondary, college and university levels;

8. Establishments for vocational training and improvement of skill levels of workers;

9. Establishment of traditional cultural houses, traditional dance, song and music ensembles; manufacture, production and repair of traditional musical instruments; maintenance and preservation of traditional cultural houses and museums;

10. Establishment of people-founded hospitals and private clinics for medical examination and treatment, establishment of facilities for epidemic prevention and control and sanitation; establishment of centres for aid activities in intensive care of orphans and invalids, and geriatric centres.

III. Production and trading of exported goods:

Projects in which production and trading of exported goods is valued at over 30% of the total value of goods production and trading of the project in a fiscal year.

IV. Offshore fishing of marine products; processing of agricultural, forestry, and marine products; provision of technical services which directly cater for agriculture, forestry and fishing activities:

1. Offshore fishing of marine products;

2. Processing of agricultural products from domestic raw materials: processing of

livestock and poultry; processing and preservation of vegetables and fruits; production of oil, essential oil or fat from vegetative materials; production of liquid milk and extractive products from milk; production of raw powder; production of feed for livestock, poultry and marine creatures; production of bottled or canned drinks from fruits;

3. Production of pulp, paper, carton or artificial planks directly from domestic sources of agricultural or forestry products;

4. Processing and preservation of marine products from domestic sources of raw materials;

5. Support services for cultivation of agricultural crops, industrial crops and forestry crops; support activities for animal husbandry; forestry support activities; marine product services; services for protection of livestock; multiplication and cross-breeding for new varieties; services for preservation of agricultural, forestry and marine products; and construction of storehouses for preservation of agricultural, forestry and marine products.

V. Scientific and technology research and development; scientific and technology services; legal consultancy, consultancy in respect of investment, business, corporate management, protection of intellectual property rights and technology transfer:

1. Investment in construction of technical works and establishments; laboratories and experimental stations for the purpose of applying new technology to production; production of new materials and rare and precious materials;

2. Investment in production of computers and software products;

3. Provision of services of information technology research and training of information technology human resources;

4. Investment in production of semi-conductors and electronic components; production of internet and telecommunications equipment; application of new technologies in production of information and telecommunications equipment;

5. High-tech industrial application; application of new biological technology for health care purposes, in the production of seedlings, animals for breeding, bio-fertilizers, bio-insecticides and veterinary vaccines; in waste treatment, in environment pollution treatment, and in re-processing of scrap materials and refuse;

6. Application of technology to use or to produce machinery or equipment using bio-energy, wind energy, solar energy, geo-thermal energy or tidal energy;

7. Consultancy in respect of legal matters, investment, business management; consultancy services in respect of science and technology, transfer of intellectual property rights and technology transfer.

VI. Investment in construction of production lines, in expansion of scale and in technology renovation; in environmental and ecological improvement and urban sanitation improvement; relocation of production establishments to non-urban areas; diversification of industries, trades and products:

1. Investment in new production lines, investment in expansion of scale and investment in technology renovation in the industries and trades stipulated in List A;

2. Investment in waste treatment facilities for environment protection; waste collection;

3. Investment in relocation of production establishments to non-urban areas, industrial zones, export-processing zones, hi-tech zones or industrial complexes.

VII. Other industries and trades:

1. Planting sugarcane, planting cotton, planting tea for industrial processing; planting medicinal herbs; and production of seedlings and animals for breeding;

2. Production of children's toys; weaving fabric or completion of textile products; production of all types of silk threads and fibres; tanning and pre-treatment of leather;

3. Rearing of livestock or poultry and aquaculture under the program for transition in the agricultural economic structure on a farm or larger scale;

4. Production of basic chemicals, pure chemicals, specialized chemicals and dyes;

5. Investment in production of pharmaceutical medicines for human beings; medical equipment, orthopaedic equipment, specialized vehicles or equipment for the disabled; construction of storehouses for preservation of pharmaceutical products; storage of treatment medicines for human beings in cases of floods, storms, natural calamities or dangerous epidemics; vegetation protection medicines; prevention and treatment medicines for animals and aquatic creatures;

6. Investment in manufacture of medium- and high-voltage electric instruments; diesel engines; equipment and spare parts for transportation and fishing ships; machine tools, machinery, equipment, spare parts and other machines for agricultural and forestry production; food processing machinery; machinery for textile and garment industries; machinery for the leather industry; mining machinery; construction machinery; industrial robots; locomotives and carriages; automobiles of all types and automobile spare parts; electric generators; precision mechanical equipment; equipment and machinery for safety testing and control of industrial production processes; manufacture of moulds for metal and non-metal products; building and repair of ships and boats; and manufacture of waste treatment equipment;

7. Production of high quality steel, alloy, non-ferrous metals, rare and precious metals, soft iron used for industrial purposes; production of specialized cement, highly thermal insulating materials, electric insulating materials, soundproofing materials; synthesized materials to replace wood, plastic for construction, glass fibres, fireproof materials; coke coal, activated charcoal; and manufacture of fertilizers;

8. Traditional industries and trades, such as carving, mother-of-pearl inlay, lacquerware, stone carving; rattan and bamboo articles, carpets, silk weaving, brocade weaving, embroidery and lace making; production of ceramics and china; production of copper fine art articles; production of rhamnoneuron paper;

9. Investment in class-1 markets and exhibition centres; trade promotion, capital raising and loan activities of people's credit funds;

10. Pilot and salvage operations at sea;

11. Investment in construction of national tourist sites, ecological tourists sites, and national parks; investment in construction of cultural park complexes with sport, recreational and entertainment activities;

12. Investment in construction and operation of infrastructure in industrial zones, export processing zones and high-tech zones; investment in production and processing in industrial zones, export processing zones, high-tech zones, small- and medium-scale industrial zones and in industrial complexes.