Impact of investment incentives due to the reorganization of administrative units (i.e. the planned consolidation of cities and provinces)

On April 9, 2025, the Ministry of Finance issued official letter No. 4525/BTC-PC guiding the determination of investment incentives and procedures for amending investment projects in case of changes in administrative boundaries due to the arrangement of administrative units and building a two-tier local government model.

For investment projects that have been approved for investment policy or granted an Investment Registration Certificate

On the basis of respecting the regulation on the guarantee of investment incentives in case of changes in the law under Article 13 of the Law on Investment, the relevant projects having investment incentives in the form of investment incentives based on the investment location as indicated in the decision approving the policy and the Investment Registration Certificate shall remain eligibility for those incentives.

For a new investment project or a change in the location of the investment project

In the case of a new administrative unit established by a competent authority due to the arrangement or adjustment of the boundaries of the commune-level administrative units in areas with different socio-economic conditions,

• The newly established administrative unit shall have the same investment incentives as the majority of its commune-level units.
• With equal commune-level units in areas with especially difficult socio-economic conditions and areas with difficult socio-economic conditions, the newly established administrative unit shall be determined to be an area with especially difficult socio-economic conditions.
• With an equal number of commune-level administrative units in difficult socio-economic conditions areas and non-incentive investment areas, the newly established administrative unit shall be an area with difficult socio-economic conditions.
• With an equal number of commune-level administrative units in especially difficult socio-economic conditions areas and non-incentive investment areas, the newly established administrative unit shall be an area with especially difficult socio-economic conditions.

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