Bo Y International Border Economic Zone

Overview of Bo Y International Border Economic Zone:

The Bo Y International Border Economic Zone was approved for adjustment by the Prime Minister in Decision 225/QD-TTg on February 8, 2007, with a total area of 70,438 hectares.

Geographical location:

The Bo Y International Border Economic Zone includes the communes of Saloong, Bo Y, Dak Su, Dak Duc, Dak Nong, Dak Kan, and Plei Kan town in Ngoc Hoi district, Kon Tum province.

Border boundaries of the economic zone:

• The northern border is adjacent to Dak Glei district.
• The southern border is adjacent to Sa Thay district.
• The eastern border is adjacent to Dak To district and Dak Ang commune.
• The western border is adjacent to Laos and Cambodia (sharing a common border with Laos for 30 km and Cambodia for 25 km).

It has a very favorable location for exchange and development with key economic regions of neighboring countries:

• With the shortest and most convenient route connecting the Central Highlands, Central Coastal region, and Southeast region of Vietnam with the Northeastern provinces of Thailand and the Northeastern provinces of Cambodia via the Bo Y International Border.
• Currently, Vietnam, Laos, and Thailand are constructing multiple road links connecting key economic regions of Vietnam, Laos, Cambodia, and Thailand via the Bo Y International Border, such as the Ho Chi Minh Road in Vietnam, National Highway 16A from Pakse to Attapeu Town (Laos), Pakse Bridge across the Mekong River (Laos-Thailand), and Road 18B from Attapeu Town (Laos) to Phu Cua Border Gate connecting with National Highway 40 in Vietnam.

Land use planning of Bo Y International Border Economic Zone:

The total land area of the border economic zone is 70,438 hectares, including:

• Urban development land: approximately 18,704 hectares (residential land: approximately 4,948 hectares).
• Rural residential construction land: approximately 3,377 hectares.
• Tourism development land: approximately 18,836 hectares.
• International commercial airport construction land: approximately 700 hectares.

The Bo Y International Border Economic Zone is a dynamic economic zone and a center in the triangle of development among Vietnam, Laos, and Cambodia. It operates under its own regulations and is built with modern technical and social infrastructure, becoming a type II border urban area, connected to the East-West economic corridor of the region, in order to effectively exploit the geographical, political, economic, and social conditions. It holds significant importance in terms of security and national defense.

Infrastructure of Bo Y International Border Economic Zone:

Transportation system:

• The main transportation axis through the Bo Y International Border plays a role as a transit route, connecting the Northeastern provinces of Thailand, Southern Laos, the Central Coastal region, and the Central Highlands of Vietnam. National Road 18, Route N5, National Highway 14, and the entrance road to the industrial zone have a 36-meter wide road boundary.
• Internal transportation: Organize the urban internal transportation network and squares to meet the standards of a Type 2 urban transportation system.
• The rural transportation system connects with the urban transportation system and inter-regional transportation routes. It ensures that motor vehicles can reach all concentrated residential areas. The transportation routes adhere to the mountainous Class IV road standards.
• Construct several bridges over the Po Ko River, across the Dak Long stream, and transportation junctions at the intersection between the main urban road and National Highway 14.

Power supply system:

• The electricity consumption targets are as follows: By 2015, urban household electricity consumption was aimed at 0.17 kW per person, while by 2025, it was targeted to increase to 0.34 kW per person. For rural households, the target was 0.04 kW per person by 2015 and 0.12 kW per person by 2025. In terms of electricity usage for industry and small-scale industries, the target was set at 100 kW per hectare.
• Total electricity demand was approximately 45 MW by 2015 and about 130 MW by 2025.
• Initially, the power source for the area will be the 110 kV Dak To substation, supplying electricity. Later on, the electricity will be sourced from the Plei Krong hydroelectric plant, which is connected to the national power grid. Additional commercial electricity will come from the Xe Kaman hydropower plant in Laos.

Water supply:

Water supply from the water supply plant within the Economic Zone:

• Domestic water consumption targets: 120 liters per person per day, at night for urban areas; 60 liters per person per day, at night for rural areas.
• Total water demand was approximately 18,000 m3 per day at night by 2015, and about 47,000 m3 per day at night by 2025.
• Water sources in the area include surface water from Au Co and Lac Long Quan lakes. There is also the utilization of water from Dak Hniu central lake and the surface water from the Po Ko River. In addition, in the dry season months, the economic zone will use additional groundwater according to the centralized water supply plan.

Wastewater and environmental sanitation waste treatment system:

• Rainwater and wastewater are designed with separate drainage systems and are treated before being discharged into the environment.
• By 2015, the authorities will collect and treat approximately 180 to 200 tons of solid waste per day at night. By 2025, they plan to increase the collection and treatment to about 400 to 440 tons per day at night.

Investment Attraction of Bo Y International Border Economic Zone:

Investment sectors:

The Vietnamese government encourages and protects Vietnamese organizations and individuals from all economic sectors. It also encourages Vietnamese nationals residing abroad and foreign investors. They are encouraged to participate in business investment in the Bo Y International Border Economic Zone.

The encouraged fields include:

• Import and export, temporary import, re-export, and transit transportation of goods in accordance with the agreement on transit transportation of goods.
• Customs warehouses, duty-free shops, exhibition halls, product introduction stores.
• Manufacturing and processing facilities for import and export, representative branches, domestic and foreign companies.
• Border markets, infrastructure investment.
• Tourism, financial services, banking.

Total number of existing investors:

• 27 active business investment projects with a registered capital of 499.6 billion VND and an implemented capital of 478.9 billion VND.
• 14 projects under construction with a registered capital of 419.2 billion VND and an implemented capital of 14.2 billion VND.
• 13 projects constructing office buildings for agencies and enterprises, including 7 projects in operation and 6 projects under development.

Investment incentives of Bo Y International Border Economic Zone:

Land rent, land use fees, and land use taxes may be exempted or reduced:

– Exemption from land rent during the basic construction period, but not exceeding 3 years from the date of land lease decision (excluding cases of investment in renovation and expansion of production and business facilities).

– Exemption from land rent after the land rent exemption period during the basic construction period.

• 15 years for projects not included in the list of investment incentives sectors.
• 19 years for projects included in the list of investment incentives sectors.

Corporate income tax incentives:

• Preferential tax rate of 10% for a period of 15 years.
• Tax exemption for 4 years and 50% reduction in tax payment for the next 9 years.
  Import tax incentives:
• Tax exemption for imported goods for processing and exported processed products.
• Tax exemption for exported goods for processing and imported processed products.
• Exemption from import taxes for goods imported for the manufacturing of goods intended for export.
• Tax exemption for imported goods for the creation of fixed assets by beneficiaries of investment incentives.
• Tax exemption for imported raw materials, supplies, and components for a period of 5 years.
• Goods imported for the purpose of manufacturing products for export are eligible for tax exemption on imports.
• Tax exemption for imported raw materials, supplies, and components for the production and assembly of medical equipment.