PHU QUOC

1. PEOPLE’S COMMITTEE OF KIEN GIANG PROVINCE PROMOTION CONFERENCE CALLING FOR INVESTMENT INTO PHU QUOC INCENTIVE POLICIES ON INVESTMENT PART 1 PROJECTS CALLING FOR INVESTMENT PART 2 HCMC, May 9,2006

2. PEOPLE’S COMMITTEE OF KIEN GIANG PROVINCE INTRODUCTION : INCENTIVE POLICIES ON INVESTMENT AND PROJECTS CALLING FOR INVESTMENT INTO PHU QUOC ISLAND

3. THE DECISIONS OF PRIME MINISTER ABOUT THE DEVELOPMENT OF PHU QUOC ISLAND (From November 5, 2004 to now)

4. THE DECISIONS OF PRIME MINISTER ABOUT THE DEVELOPMENT OF PHU QUOC ISLAND (From November 5, 2004 to now) 178/2004/QĐ-TTg date October 5 ,2004 PREFERENTIAL POLICIES PART 1 THE REGULATION ON FOREIGNERS ENTRY INTO, EXIT FROM AND RESIDENCE IN 229/2005/QÑ-TTg date November 16,2005 PART 2 38/2006/QÑ-TTg date February 14,2006 ENCOURAGING POLICIES ON INVESTMENT PART 3

5. PART 1 PREFERENTIAL POLICIES 178/2004/QÑ-TTg • The Decision no. 178/2004/QD-TTg dated October 5, 2004 of the Prime Minister, the content of this Decision is to determine the target of the overall scheme on development of Phu Quoc Island, Kien Giang province till 2010 with a vision toward 2020. • At article 7, the Prime Minister permitted Phu Quoc to apply the highest preferential mechanisms and policies promulgated by the Vietnamese State. In the other words, any places in the territory of Vietnam is permitted to apply the highest preferential mechanisms and policies promulgated by the Vietnamese State, Phu Quoc island of Kien Giang province shall be applied the same preference.

6. PART 2 THE REGULATION ON FOREIGNERS ENTRY INTO, EXIT FROM AND RESIDENCE IN 229/2005/QÑ-TTg • Foreigners and Vietnamese holding foreign passports, entering, exiting from, and residing in, Phu Quoc Island, for a stay period not exceeding 15 days shall be exempt from visas; foreigners who enter an other international border-gate of Vietnam and stay in its transit lounge before traveling to Phu Quoc island shall also be exempt from visas. For instance, foreigners who enter Phu Quoc Island from Bangkok or Phnom Penh can transit in Tan Son Nhat International Airport, Ho Chi Minh City shall also be exempt from visas and can stay in Phu Quoc not exceeding 15 days. • the Decision no. 229/2005/QD-TTg dated September 16, 2005 of the Governmental Prime Minister, the main content of this Decision is that the Prime Minister promulgated the regulation on foreigners entry into, exit from, and residence in, Phu Quoc Island, Kien Giang province. • Crew members holding valid foreign crew member's books or crew member's passport may enter, exit from, and reside in, Phu Quoc island during the period when their ships anchor at Phu Quoc island.

7. PART 3 38/QÑ-TTg ENCOURAGING POLICIES ON INVESTMENT • The Decision no. 38/2006/QD-TTg on February 14, 2006 of the Prime Minister, the main content of this Decision consists of 2 parts: • Statute for organization and operation of Phu Quoc Island Development Investment Management Board. • Preferential and encouraging policies for investment into Phu Quoc Island POLICY ON LAND POLICY ON TAX POLICY ON NON-CUSTOM AREA POLICY ON BUSINESS REGISTRATION AND ISSUING THE INVESTMENT LICENCE

8. ENCOURAGING POLICIES ON INVESTMENT 38/QÑ-TTg POLICY ON LAND 1.a Foreign investors have the rights: 1. Domestic and foreign investors have operations on tourism, services, production, business of commodities or invest on infrastructure works in Phu Quoc Island have the rights: • To land lease, land sub-lease for land with construction of technical infrastructure composition of the enterprises for investment, construction and business on composition of infrastructure; • Foreigners permanently residing in Vietnam and foreign investors are entitled to purchase dwelling-house and lease resident land for long-term in Phu Quoc Island. • To transfer the renting land use right and property attached to land during the term of land lease or land sub-lease; to mortgage, guarantee, and contribute capital by the renting land use right in case of the total rental land is paid once;

9. ENCOURAGING POLICIES ON INVESTMENT 38/QÑ-TTg POLICY ON LAND 1.b Domestic investors have the rights: - To transfer land use right, land lease, land sub-lease for land with construction of technical infrastructure composition; - To mortgage, guarantee and contribute capital by the value of land use right and property attached on land during the remaining term of land use; - Vietnamese living abroad is entitled to purchase dwelling-house attached to the land use right in Phu Quoc. Island.

10. ENCOURAGING POLICIES ON INVESTMENT QÑ38/QÑ-TTg POLICY ON LAND 1.2/ The maximum exemption for rental land is 15 years from the date to finish the construction. 1.3/ The unit price of land rental per year equals 50% unit price of land rental regulated by Government in Decree no. 142/2005/ND-CP on November 14, 2005. However, the least price equals 0,25% of land price according to the using purpose of renting land promulgated by People’s Committee; the rental land is stable in 5 years. • To apply the policy of one price for commodities, services and land rental towards organizations, individuals without discrimination of inland people from foreigners, who have the operation of production, business in Phu Quoc Island.

11. ENCOURAGING POLICIES ON INVESTMENT QÑ38/QÑ-TTg 38/QÑ-TTg POLICY ON TAX • Government regulated all invested projects into the Phu Quoc Island are entitled to enjoy preferences for areas having specially difficult economic-social conditions (List C). • Government determined Phu Quoc Island to be as the national main-point tourist zone, so the investment projects on tourism business in Phu Quoc Island belong to List A.

12. ENCOURAGING POLICIES ON INVESTMENT QÑ38/QÑ-TTg POLICY ON TAX 2.1/Preferences of income tax: - Investment projects of domestic and foreign organizations and individuals into the Phu Quoc Island District are entitled to enjoy a tariff on enterprise income tax of 10% applied during the period of the project implementation (the present income tax is 28% for all enterprises). - The maximum exemption is 4 years since getting income tax and 50% tax-reduction for 9 years following.

13. ENCOURAGING POLICIES ON INVESTMENT 38/QÑ-TTg POLICY ON TAX 2.2/ Preferences of income tax for people having high income: - Reduce 50% income tax for people having high income, including Vietnamese and foreigner working in Phu Quoc Island. 2.3/Preferences of import tax: - Domestic and foreign investors are exempt from import tax towards one-time imported commodities in order to create the fixed property during the time of investment to projects; mechanism of the above preferences to be applied even to cases of enlarging scale of project, substitution and renovation of technology. - As for BOT project, it is still exempt from import tax towards fuel, raw material, material and means imported of kinds not yet to be produced in the country, for serving the construction, operation of BOT project

14. ENCOURAGING POLICIES ON INVESTMENT 38/QÑ-TTg POLICY ON TAX 2.4/ Preferences of VAT tariff: - Commodities, services manufactured, consumed in the Non-customs Areas and those imported from foreign country into the Non-customs Areas are not to pay value added tax. Commodities, services from the interior of Vietnam and other functional zones on the Phu Quoc Island bringing into the Non-customs Areas will be applied a VAT tariff of 0%.

15. ENCOURAGING POLICIES ON INVESTMENT 38/QÑ-TTg POLICY ON NON-CUSTOM AREA b) Commerce of goods (including export, import, transfer through border gate, temporary import, re-export, distribution, shops and supermarket for retail, shops and supermarkets of non-duties); c) Commerce of services (classification, packaging, transport, forwarding and receiving of transit goods, maintenance, warehouse, bonded warehouse, finance, banking, transport, insurance, entertainment services, restaurant); d) Trade promotion (fair, exhibition, showroom, branches and representative offices of domestic and foreign companies and finance-banking organizations) and other trade operations. 3.1/ On the Phu Quoc Island, Government allowed to construct 2 Non-customs Areas which will be attached to An Thoi Port and Phu Quoc Airport. The Non-customs Area has hard fence separated with surrounding areas. In the Non-customs Area has no residential areas 3.2/ Types of main production and business in Non-customs Areas including: a) Production, processing, re-production, assembling of export goods, import goods, and goods for serving on the spot;

16. ENCOURAGING POLICIES ON INVESTMENT 38/QÑ-TTg POLICY ON NON-CUSTOM AREA 3.3/ Progress of the implementation: - From 2006-2010, some works shall be implemented with the average and small investment scale such as duty-free stores, retail supermarket, services of finance and banking in An Thoi Port and Duong Dong Airport. - After 2010 the Non-customs Areas will be invested completely according to the planning in An Thoi Port and Duong To Airport.

17. ENCOURAGING POLICIES ON INVESTMENT QÑ38/QÑ-TTg • POLICY ON BUSINESS REGISTRATION • AND ISSUING THE INVESTMENT LICENCE. • Foreign direct investment projects into Phu Quoc Island are approved as per theprocess of registration for issuing the Investment Licence. Domestic invested projects are considered, approved as per the current regulations with the simplest procedures. • Decision no. 38/2006/QD-TTg dated February 14, 2006 of the Governmental Prime Minister allowed to establish Phu Quoc Island Development Investment Management Board. People’s Committee of Kien Giang province co-ordinated Ministry of the Interior to finish the project for the establishment of Phu Quoc Island Development Investment Management Board and aslo submited this project to the Governmental Prime Minister.

18. ENCOURAGING POLICIES ON INVESTMENT 38/QÑ-TTg • POLICY ON BUSINESS REGISTRATION • AND ISSUING THE INVESTMENT LICENCE. • THE CORRESPONDENCE ADDRESS: • Department of Planning and Investment of Kien Giang province • 29 Bach Dang Street, Rach Gia town, Kien Giang province. • Tel: 077. 874 118 • (Investment office - Department of Planning and Investment). • Fax: 077. 862 037 • Email : skhdtkg@gmail.com • Website: kehoach.kiengiang.gov.vn. • Decision no. 38/2006/QD-TTg dated February 14, 2006 of the Governmental Prime Minister allowed to establish Phu Quoc Island Development Investment Management Board. People’s Committee of Kien Giang province co-ordinated Ministry of the Interior to finish the project for the establishment of Phu Quoc Island Development Investment Management Board and aslo submited this project to the Governmental Prime Minister. • At the present, Phu Quoc Island Development Investment Management Board is not established. Therefore Kien Giang Department of Planning and Investment, the direct key office, will contact with the investors in order to carry out investment procedures for the investors. • After the project for the establishment of Phu Quoc Island Development Investment Management Board is approved, all procedures of business registration, issuing the Investment Licence, land delivery... to investors is implemented quickly and passed one-door office at Phu Quoc Island Development Investment Management Board. This is the key office to solve problems of the investors so that they do not need to contact with other provincial departments in the mainland.

19. Welcome the co-operation of domestic and foreign investors.