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Legal Update

Policies for Encouraging the Development of Priority and Cutting-Edge Industries

7 July 2008
Mayer Brown JSM Legal Update

Circular No. 03/2008/TT-BTC of the Ministry of Commerce and Industry ("Circular 03") dated 14 March 2008 and Decision No. 55/2007/QD-TTg of the Prime Minister dated 23 April 2007 ("Decision 55"), provide a number of policies for encouraging the development of priority and cutting-edge industries by creating favourable environments for their growth.  
Full Update 
1.  Under Circular 03, the priority and cutting-edge industries for 2007 to 2010, with long-term sustainable establishment aimed at 2020, are:
(a)   Textiles (thread, cloth, silk, export garments, and auxiliary materials);
(b)   Leather footwear (export footwear, auxiliary materials);
(c)   Plastics (household utensils, packaging, bottles and cans, pipes and so forth; technical plastic);
(d)   Agricultural, forestry and aquaculture processing;
(e)   Steel (steel billets, special steel);
(f)    Mining and processing of aluminum bauxite;
(g)   Chemicals (basic chemicals, fertilizers, petrochemicals, pharmaceutical chemicals, cosmetics chemicals);
(h)   Manufacture of machines and machinery (cars, shipbuilding, complete sets of equipment, agricultural machinery and electronic machinery);
(i)    Electronic equipment, telecommunications equipment, and information technology;
(j)    Products from new technology (new energy, recycled energy, software industry and digital technology items).
2.  A number of policies for encouraging the development of priority and cutting-edge industries are set out as follows:
(a)  Priority Industries:
(i)  Regarding land: Dividing in accordance with demand in industrial zones and other industrial locations;

(ii)  Regarding commercial promotion:
-  Inclusion in the annual program for formulation and development of trade marks;
-  Assisting with funding for enterprises to formulate international quality control standards (via their industry associations);
-  Introducing products free-of-charge on the websites of the Ministry of Industry and Departments of Industry;
-  Exhibiting and introducing products free-of-charge at national and local trade fairs and exhibitions.
(iii)  Regarding research and development: The State budget assists with funding to the maximum level permitted by current regulations for research and development activities related to mainstay industries.
(b)  Cutting-edge Industries: the policies for priority industries are also applicable to cutting-edge industries. Furthermore, the State assists projects with part of the expenses (not to exceed fifty per cent of their investment capital) when the manufacturing establishment projects are aimed at environmental protection.
This Circular takes effect as of 10 April 2008.
For further information, please contact: 
Dao Nguyen ( );
Ephraim N. Wittman ( ); or
Hanh Bui (  )
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