THE PRIME MINISTER

Article 1.- To promulgate a number of mechanisms and policies prioritizing state-funded development investment for Phu Quy island, Binh Thuan province, as follows:

1. The State shall give priority in allocating capital from the state budget and other sources to investment in infrastructure construction in the three communes of Tam Thanh, Ngu Phung and Long Hai and carry out support policies in accordance with the Prime Minister's Decision No. 257/2003/QD-TTg of December 3, 2003, on supporting investment in construction of essential infrastructure of communes meeting with special difficulties in coastal banks and islands.

2. State-funded investment in infrastructure system development shall be supported as follows:

a/ Central budget

Prioritizing the allocation of central budget sources (including official development assistance (ODA), government bonds, the East Sea-Islands Program and other target support programs, and government preferential credit) through ministries and central-level agencies, or providing targeted additional allocation for the local budget to fund key investment projects on infrastructure construction on Phu Quy island, including:

- A project to upgrade Phu Quy airport;

- A project to upgrade and expand Trieu Duong port (Phu Quy port), phase II;

- Projects to develop communication and telecommunications;

- Projects to upgrade and build key roads on the island (enlarging and upgrading a beltway around the island, and main road lines across the island north-south and east-west;

- Projects to develop energy (particularly renewable energy), electricity supply and lighting;

- Projects to explore, exploit, distribute and supply safe water, projects on water drainage, wastewater treatment and reuse of wastewater, and waste treatment;

- Projects to build a vessel shelter area, a fishing information center and a fishing control center;

- Projects on forestation and environmental protection.

b/ Local budget

Local budget shall be prioritized for implementation of other important projects, including:

- Investment projects to build permanent primary, secondary and high school buildings; upgrade commune health stations; and build a district-level vocational training center, a military-civil hospital, cultural-information and gymnastics-sports centers and offices of administrative and non-business agencies;

- Projects to build urban infrastructure (a district center in Ngu Phung commune area), fishing infrastructure (in Trieu Duong port and facilities serving the fishing information center and vessel shelter area), and support investment in construction of industrial zone infrastructure (Phu Quy industrial zone connected with Trieu Duong port);

- Projects to build sub roads and inter-communal roads;

- Projects to assist the transfer and application of new technologies in the domains of water and power supply, telecommunications, aquatic product processing, aquatic resource protection, construction, transport, waste treatment and environmental protection; and anti-erosion dykes for Phu Quy island;

c/ Capital allocation

- For central budget: Based on the central budget capacity, the Ministry of Planning and Investment shall, in collaboration with the Ministry of Finance, annually sum up and include central budget allocations in the budget estimates of relevant ministries and agencies; provide targeted allocations from the central budget to Binh Thuan province, which will be reported to the Government for submission to the National Assembly for approval in accordance with the State Budget Law and other relevant laws;

- For local budget: Priority shall be given to a number of projects on socio-economic development and national defense and security in Phu Quy island district.

Article 2.- Incentive and preferential policies for various economic sectors investing in Phu Quy island district of Binh Thuan province:

1. Investment projects on Phu Quy island are entitled to incentives adopted for localities having specially difficult socio-economic conditions in accordance with the Laws on Investment, Land, Enterprise Income Tax, Import Tax and Export Tax, and Cooperatives, and other legal provisions on taxes and incentives provided by international treaties which Vietnam has signed or acceded to.

2. Investment projects of foreign and domestic organizations and individuals are entitled to a 10% enterprise income tax rate for 15 years since the investment project starts business activities, an enterprise income tax break for four years since it has taxable income and a 50% reduction of the payable tax amount for nine subsequent years.

3. Investment projects on Phu Quy island are entitled to incentives on land, water and sea surface rents, and land use levies as follows:

a/ Exemption from land, water and sea surface rents in accordance with the Government's Decree No. 142/2005/ND-CP of November 14, 2005, on collection of land and water surface rents, and other land-related laws;

b/ Exemption from land, water and sea surface use levies for investment projects in the case of land allocation with payment of land use levies.

4. Investment projects on production and business on Phu Quy island eligible for the State's investment and export credits according to current law.

Investment projects on Phu Quy island eligible for the State's preferential credits according to current law shall be prioritized to get funds for their implementation.

5. Tourism investment projects on Phu Quy island are entitled to mechanisms and polices adopted for investment projects in national tourist parks in the trades and sectors enjoying preferential investment under the Government's Decree No. 108/2006/ND-CP of September 22, 2006, detailing and guiding the implementation of a number of articles of the Investment Law.

6. For investment projects feasible for capital recovery, the People's Committee of Binh Thuan province shall decide on mobilization of investment in the form of BOT (Build-Operate-Transfer), BTO (Build-Transfer-Operate) or BT (Build-Transfer), and issuance of project bonds according to law.

7. Domestic credit institutions, foreign-invested joint venture banks, and 100% foreign-owned banks established and operating under Vietnamese law may open branches on Phu Quy island to provide banking services and other services for economic activities on Phu Quy island in accordance with law.

8. In addition to the preferences specified in this Decision, domestic and foreign organizations' and individuals' investment projects on Phu Quy island in the hi-tech domains prescribed in Clause 2, Article 5 of the Government's Decree No. 99/2003/ND-CP of August 28, 2003, promulgating the Regulation on hi-tech zones, and projects having acquired a certificate of hi-tech industrial project issued by the Ministry of Science and Technology are entitled to a 10% enterprise income tax rate throughout the project life.

9. Investors are entitled to exemption from import duty on goods imported to create fixed assets, including machinery, equipment, spare parts and materials which are unavailable in the country to be used for the manufacture of equipment and machinery for production chains, and other fixed assets serving production and business activities and service provision on Phu Quy island. BOT projects are also entitled to exemption from import duty on imported fuel and materials serving production and operation of works. This preference is also applicable to cases of project expansion and technological renewal.

10. Big investment projects on Phu Quy island significant to the island's socio-economic development and having major impacts on Phu Quy island's affected areas are entitled to a 10% enterprise income tax rate throughout the project life after they are approved by the Government, including:

a/ Investment projects to build establishments producing and supplying electricity and renewable energy;

b/ Projects to provide services of transport from the inland to Phu Quy island and vice versa;

c/ Projects to generate and supply water serving daily and production needs on Phu Quy island;

d/ Environmental protection projects.

11. Adopting the single price mechanism for goods and services to both local and foreign organizations and individuals having production and business activities.

Article 3.- Other provisions concerning the operation, rights and obligations of domestic and foreign organizations and individuals engaged in production and trading of goods, tourism and services on Phu Quy island not stipulated in this Decision, shall be implemented in accordance with the Laws on Investment, Enterprises, Cooperatives, Customs, Land, and Commerce, other tax laws and relevant legal documents as well as international treaties which Vietnam has signed or acceded to.

Domestic and foreign organizations and individuals that have been involved in the production and trading of goods and services on Phu Quy island prior to the date of issuance of this Decision are entitled to the preferences for the remaining duration from the date this Decision takes effect.

When new mechanisms and policies with more preferences are promulgated, they are applicable to Phu Quy island.

Article 4.- The provisions of Articles 1 and 2 of this Decision replace Articles 2 and 3 of the Prime Minister's Decision No. 14/2002/QD-TTg of January 15, 2002, approving the scheme on Phu Quy island economic zone.

Article 5.- Organization of implementation

1. The Ministries of Planning and Investment, Finance, Trade, Defense, Public Security, Industry, Transport, Post and Telematics, Fisheries, and Construction, the National Administration of Tourism and relevant agencies, according to their functions and powers, shall guide in detail and collaborate with the People's Committee of Binh Thuan province in implementing mechanisms and policies specified in this Decision.

2. The People's Committee of Binh Thuan province is responsible for:

a/ Collaborating with ministries and central-level agencies in elaborating a master plan on socio-economic development for Phu Quy island, land-use planning, development plans for industries and sectors, and detailed plans for functional sections (industrial zones, Trieu Duong port, the trade center, the island district's administrative center, etc.) to serve as a basis for designing projects calling for investment and eligible for investment incentives;

b/ Performing state management of investment projects on Phu Quy island in accordance with approved plans; submitting for approval, or approving according to its competence, the list of development investment projects and annual funding plans for development investment on Phu Quy island. Paying special attention to sensitive areas relating to the island's relics upon construction and implementation of plans and projects on development of industries and sectors;

c/ Adopting specific investment incentive mechanisms in accordance with current law to attract investors to implement projects on Phu Quy island; prioritizing recruitment and employment of local labor; assisting vocational training for the local workforce; facilitating local laborers having expertise and skills to work for enterprises on Phu Quy island; providing support for the attraction of personnel having hi-tech expertise to work on Phu Quy island; and supporting construction of public utilities and service facilities in accordance with the State Budget Law, investment and trade promotion, and compensation and ground clearance, to boost investment and development on Phu Quy island;

d/ Directing the People's Committee of Phu Quy district to conduct ground clearance and pay compensations, and the provincial functional agencies to collaborate with the People's Committee of Phu Quy district in carrying out measures to ensure security and social order and safety to facilitate the operation of enterprises on Phu Quy island;

e/ Directing provincial functional agencies and the People's Committee of Phu Quy district to collaborate with relevant ministries and branches in managing Phu Quy island for swift and sustainable development.

Article 6.- This Decision takes effect 15 days after its publication in "CONG BAO."

Article 7.- Ministers, heads of ministerial-level agencies, heads of government-attached agencies, the president of the People's Committee of Binh Thuan province and the president of the People's Committee of Phu Quy district shall implement this Decision.