Tien Son Industrial Park - Bac Ninh

I. Overview of Tien Son Industrial Park – Bac Ninh:

Information about the industrial park:

Tien Son Industrial Park – Bac Ninh was established according to Decision No. 1129/QD-TTg dated December 18, 1998, by the Prime Minister of the Government. In the decision, Viglacera Corporation – JSC (VIGLACERA) is the investor responsible for the construction and technical infrastructure business in Tien Son Industrial Park – Bac Ninh.

Through multiple adjustments, according to Document No. 808/CP-CN dated June 18, 2003, by the Government, approving the expansion plan of Tien Son Industrial Park, Bac Ninh province, and Decision No. 1372/QD-BXD dated November 2, 1999, by the Minister of Construction, approving the detailed plan of Tien Son Industrial Park, Bac Ninh province (Phase I).

Decision No. 475/QD-BXD dated March 30, 2005, by the Minister of Construction, approves the detailed plan for the expanded Tien Son Industrial Park, Bac Ninh province (Phase I), with an approved area of 350 hectares.

The industrial park has a large scale, covering an area of 350 hectares, including 24 hectares of urban land. Tien Son Industrial Park is one of the first industrial parks in Vietnam closely connected to the urban area. The industrial park was established in 1999 and is divided into two phases:

• Phase 1: 1999 – 2049
• Phase 2: 2006 – 2056
• The total registered investment capital is 834.3 billion Vietnamese dong.

On August 5, 2011, the People’s Committee of Bac Ninh province issued Decision No. 936/QD-UBND approving the adjustment of the detailed construction plan of Tien Son Industrial Park, reducing an area of 19.95 hectares for local construction of residential and service areas. The industrial park was approved with a planned area of 332.05 hectares.

Investment situation:

Tien Son Industrial Park, after more than a decade of focusing resources on investment, construction, and operation, has now emerged as the most comprehensive industrial park project across all technical infrastructure categories. With its strategic location and modern infrastructure, Tien Son Industrial Park has become a destination for many large, well-known businesses from various countries around the world.

Currently, Tien Son Industrial Park has attracted over 120 domestic and foreign investors. The majority of FDI enterprises come from economically strong countries such as Japan, Switzerland, Taiwan, and China.

Prominent brands investing here include Dainichi Color from Japan, ABB from Switzerland, Canon Vietnam, and Sumitomo from Japan.

II. Geographical location of Tien Son Industrial Park – Bac Ninh:

The industrial park is located in the administrative areas of Dong Nguyen, Hoan Son, Noi Due, Tuong Giang, and Tien Son districts (now Tu Son Town), Bac Ninh province.

The industrial park is located within the Hanoi-Hai Phong-Quang Ninh economic growth triangle, between National Highway 1A and National Highway 1B (Lang Son – Hanoi – Ho Chi Minh City). From the industrial park, one can travel along Highway 18A to the east to reach Cai Lan deep-water port in Hai Phong or to the west to reach Noi Bai International Airport.

Regarding regional connectivity:

• Approximately 22km from the capital city of Hanoi.
•  Approximately 33km from Noi Bai International Airport.
• Approximately 128km from Cai Lan deep-water port (Halong City).
• Approximately 122km from Hai Phong seaport.
• Approximately 136km from Lang Son border gate.

III. Infrastructure of Tien Son Industrial Park – Bac Ninh:

Internal transportation system:

• The internal transportation system, which comprehensively covers and is logically arranged within the premises of the industrial park, accounts for 15% of the total area.
• It includes main roads with two wide lanes of 37 meters and branch roads with a width of 28 meters.
• Along the roads, there are 6-meter-wide sidewalks where underground utility corridors such as electricity, water supply and drainage, and information are located.
• Tien Son Industrial Park is connected to National Highway 1A through a traffic interchange and an overpass.

Power supply system:

• The national power grid supplies electricity to Tien Son Industrial Park through a 110/22KV transformer station with a capacity of 2×40 MVA.
• The power transmission system runs along the land plots to ensure a sufficient and stable electricity supply to all investors within the industrial zone.
• Investors can choose to use medium or low-voltage electricity according to their needs.

Communication system:

• The Bac Ninh Post Office has opened a branch in the central area of Tien Son Industrial Park. Its objective is to establish a state-of-the-art IDD telecommunication network that adheres to international standards. The branch aims to offer comprehensive and efficient communication services both domestically and internationally.
• In addition, the industrial park also establishes a modern ICT system to serve diverse communication needs such as data transmission, Internet, IP telephony, and video conferencing.

Water supply system:

• In phase 1, the industrial park has constructed a groundwater treatment station with a capacity of 6,500 m3/day, a large capacity water reservoir system.
• A water supply network to meet the water needs for the production and living of businesses in the industrial zone.

Wastewater treatment system:

• The shared wastewater treatment station of the industrial park collects and treats industrial wastewater.
• The collection and sorting of solid waste from factories and plants precede its transportation to landfill sites for treatment.

Other public utilities:

Tien Son Industrial Park is equipped with various other public facilities, including:

• Warehousing center, banks.
• Lighting and security systems.
• Firefighting facilities, green belts.
• Housing for staff, apartment complexes, service areas, and medical stations.
• Recreational areas, supermarkets, sports complexes.

These facilities effectively meet the needs of employees working for businesses in the industrial park.

IV. Investment-attracting Industries in Tien Son Industrial Park – Bac Ninh:

Tien Son Industrial Park in Bac Ninh mainly attracts the following industries:

• High-tech industries.
• Electronic components.
• Mechanical assembly for manufacturing automotive and motorcycle parts.
• Brick and ceramic production.

V. Investment Costs in Tien Son Industrial Park – Bac Ninh:

• Infrastructure management and maintenance fee: 0.5 USD/m2/year (excluding VAT).
• Annual land lease fee: According to provincial regulations.
• Clean water supply cost: 0.4 USD/m3.
• Electricity cost: According to the electricity tariff of EVN (ranging from 0.066 USD to 0.12 USD/KWh).
• Wastewater treatment fee: 0.28 USD/m3 (excluding VAT).

VI. Investment Incentive Policies in Tien Son Industrial Park – Bac Ninh:

Tax Incentives for Corporate Income Tax:

A preferential tax rate of 10% for 15 years applies to Newly established enterprises from investment projects in the following sectors:

• High technology as defined by the law; scientific research and technological development.
• Investment in water plants, water supply, and drainage systems.
• Software production.

These enterprises are exempt from tax for 4 years and enjoy a 50% reduction in tax payable for the next 9 years.

A preferential tax rate of 10% throughout the operational period applies to:

• Newly established enterprises from investment projects operating in socialized sectors (as decided by the Prime Minister) related to education and training, vocational training, healthcare, culture, sports, and the environment.
• These enterprises are exempt from tax for 4 years and enjoy a 50% reduction in tax payable for the next 5 years.

The period for applying tax incentives and tax reductions for projects is as follows:

• The period for applying tax incentives is calculated continuously from the first year of generating revenue from privileged activities.
• The period for tax reduction is calculated continuously from the first year of taxable income from investment projects. In case the enterprise does not have taxable income in the first 3 years but has revenue, the period for tax reduction starts from the fourth year.

Tax reduction for other cases:

Enterprises in manufacturing, construction, and transportation that employ a substantial number of female workers can receive a corporate income tax reduction equivalent to the extra expenses they incur for employing female workers. These expenses include:

• The expenses include retraining costs. Additionally, there are health examination expenses within a year. Furthermore, postnatal training expenses are provided for female workers. Salaries and allowances are given to female workers during maternity leave and breastfeeding leave while they continue working.
• Setting up a fund for the scientific and technological development of enterprises, up to a maximum of 10% according to Article 17 of the Corporate Income Tax Law.

Profit Transfer Tax to foreign countries: The tax rate is 0%.

Import Duty Exemptions:

• Equipment, machinery (including accompanying spare parts), specialized transport vehicles not yet domestically produced, and construction materials.
• Special investment projects; projects producing mechanical, electrical, and electronic components and spare parts are exempt from import duties on raw materials for the first 5 years of production and business.
• Imported raw materials, components, and supplies for manufacturing export goods.

Value-Added Tax (VAT) Exemption: This applies to imported equipment, machinery, and specialized vehicles within the technological production line that is not yet domestically produced.

Incentives for Land Rental Fee Waivers and Reductions:

• Land rental fees are waived for 7 years for service business projects in the industrial zone if the land rental fees are directly paid to the state.
• Land rental fees are waived for 11 years for:
  – Infrastructure development projects in the industrial zone if the industrial zone developer directly pays the land rental fees to the state.
  – When paying the land rental fees directly to the state, production, and business projects operate in the industrial park.

VII. Labor Source and Costs in Tien Son Industrial Park – Bac Ninh:

Labor Source:

The province of Bac Ninh currently has over 1.15 million people, with nearly 738,000 people of working age, accounting for 63.9% of the population. This indicates that Bac Ninh is in the “golden population” phase. The province’s labor force has been growing at an average rate of about 2.5% per year and increasing over the years.

The percentage of people with a high school education or above is 23.6%. Graduates from junior high school make up 44.34%. Every year, Bac Ninh province has about 7,000 graduates from universities and colleges. Approximately 11,000 vocational students and trained technicians are present. Among them, 40% specialize in technical professions, while 60% focus on business management professions.

Bac Ninh has 8 universities and colleges with 989 lecturers, including 560 lecturers with a higher education degree (accounting for 56.6%). Each year, Bac Ninh province can enroll over 4,500 students.

Costs:

Tien Son Industrial Zone in Bac Ninh is located in the Tien Son district (now Tu Son town), which belongs to Zone II.

Hence, the prevailing minimum wage in Zone II amounts to 3,920,000 VND per month.