30-03-2024

EFFORTS MADE TO PROMOTE ESTABLISHMENT OF COTTAGE INDUSTRY ZONES

The Government has recently issued Decree 32/2024/ND-CP, on the management and development of cottage industry zones to attract small and medium-sized enterprises, cooperatives and cooperative groups to invest in production and business in concentrated production areas. With a view to attracting small- and medium-sized enterprises, cooperatives and cooperative groups to invest in production and business in, or relocate their existing production and business facilities to, concentrated production areas, the Government has recently issued Decree 32/2024/ND-CP, on management and development of cottage industry zones.

Cottage industry zone is defined in the new regulation as a delimited place where industrial production activities are carried out and services for industrial and cottage industry activities are provided and there are no inhabitants.

In addition, it must neither be larger than 75 hectares nor smaller than 10 hectares. For cottage industry zones in mountainous districts and those within craft villages, each must neither be larger than 75 hectares nor smaller than 5 hectares.

Worthy of note, a cottage industry zone can be established if it is included in an approved list of cottage industry zones in a province; set to occupy a land area in conformity with a district-level land use master plan; and has its technical infrastructure invested and constructed by the enterprise, cooperative or organization with the legal entity status and sufficient financial capacity.

In case a district already has cottage industry zones, the average occupancy rate of them must exceed 50 percent or the zones’ total industrial land area yet to be leased must be under 100 hectares.

As for investment incentives, local budgets will support the development of technical infrastructure facilities both inside and outside cottage industry zones in their localities.

Priority will be given to environmental protection infrastructure facilities for operating cottage industry zones, shared technical infrastructure projects in areas with difficult or extremely difficult socio-economic conditions, as well as those on sectoral linkage, eco-manufacturing and preservation of traditional crafts.

The State will provide as financial support up to 30 percent of total investment capital required for technical infrastructure construction in a cottage industry zone, which is not included in the project’s total investment capital for calculation of land sublease prices and infrastructure use levies.

The Decree will take effect on May 1 this year.

Decree No. 32/2024/ND-CP

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