Policy to encourage investment in tourism sector

In recent times, Vietnam’s tourism industry has made significant progress and achieved many promising results. The growth rate of international visitors averages 15% per year and domestic visitors have reached more than 10% growth per year. The tourism infrastructure and technical facilities of the industry have also been constantly upgraded. The types of tourism products and services are increasingly diverse. Service quality and professionalism have gradually improved. Tourism businesses have grown strongly in both quantity and quality, building a number of prestigious domestic and international brands. A number of key tourist areas and destinations have gradually taken shape.

Principles of tourism development in Vietnam

According to Article 4 of the 2017 Law on Tourism, the development of Vietnam’s tourism must comply with the following principles:

First, develop sustainable tourism, with clear strategies, plans and projects, identifying key points and priorities.

Second, develop tourism in conjunction with preserving and promoting the values ​​of national cultural heritage and natural resources; exploiting the strengths of each locality and regional linkages.

Third, ensure national sovereignty, national security and defense, social order; expand international relations, promote the country and people of Vietnam.

Fourth, ensure national and community interests, the rights of tourists, businesses and individuals doing tourism business.

Fifth, develop domestic and international tourism simultaneously; treat tourists equally.

Policies to encourage investment in tourism sector in Vietnam

First, Vietnam has a policy of mobilizing all resources to develop tourism to ensure that tourism becomes a key economic sector of the country.

Second, organizations and individuals doing tourism business enjoy the highest level of incentives and investment support when the government issues and applies policies on incentives and investment support.

Third, the government prioritizes allocating funds for the following activities:

• Planning for tourism;
• Building infrastructure to enhance tourism development;
• Promoting tourism, building national and local tourism brands;
• Investigating, evaluating, protecting, embellishing and developing the value of tourism resources.

Fourth, the government has policies to encourage and support the following activities:

• Training and developing tourism human resources;
• Researching and orienting tourism product development;
• Investing in developing technical facilities and high-quality tourism services;
• Applying modern science and technology to serve tourism management and development;
• Developing tourism in areas with tourism potential; using local tourism human resources;
• Investing in forming large-scale complex tourism service areas; duty-free shop systems, shopping centers serving tourists;
• Investing in developing new tourism products that have a positive impact on the environment, attracting the participation of the community; investing in developing sea and island tourism products, eco-tourism, community tourism, cultural tourism and other specific tourism products.

Fifth, Vietnam has policies to facilitate travel, residence, immigration procedures, customs, VAT refunds, and ensure other legitimate rights and interests for tourists (Article 5 of the 2017 Law on Tourism).

Implementing policies to encourage investment in tourism in Vietnam

In recent times, the government has issued many policies to directly support the tourism industry, including:

First, policies on taxes and fees.

Extension of deadline for payment of VAT, corporate income tax, personal income tax and land rent; Reduction of land rent in 2020 and 2021; Reduction of 30% of VAT rate or 30% of percentage for calculating VAT on goods and services: accommodation services; services of travel agents, tour operators and support services related to promotion and organization of tours. Reduction of 30% of corporate income tax payable; Reduction of electricity prices for tourist accommodation establishments from the retail electricity price applied to business to the retail electricity price applied to manufacturing industries; Reduction of 50% of appraisal fee for granting travel business licenses; Reduction of 80% of deposit for travel service business until the end of 2023; Postponement of payment of trade union fees until the end of 2021.

Second, credit policy.

Exemption and reduction of loan interest until the end of June 2022 (restructuring of debt repayment period, exemption and reduction of interest and fees and maintaining the debt group to continue supporting customers affected by Covid-19).

Third, social security policy.

Support for employees and employers facing difficulties. Enterprises and employees in the tourism sector are supported as follows: Support for employees and employers to temporarily suspend contributions to the Pension and Death Fund. Support for employers to train and improve skills to maintain employment for employees. Support for employees to temporarily suspend the performance of labor contracts or take unpaid leave. Support for employees who terminate labor contracts but are not eligible for unemployment benefits. Support for tour guides. Support level: VND 3,710,000/person. Support for employers to borrow capital to pay for suspended wages, to borrow capital to pay salaries for employees when production is restored. Support for enterprises, cooperatives, and business households in the context of the Covid-19 epidemic according to Resolution No. 105/NQ-CP dated September 9, 2021 of the Government.

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