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Over $15bn worth foreign direct investment has been flowing into Vietnam in 2007 as investors gained more confidence in the booming economy.

The country has been enthusiastically encouraging foreign investment. Since Jan 1, 2004, foreign economic organisations and individuals have been enjoying tax exemption for transporting profits abroad.

In the past, foreign organizations and individuals' legal incomes earned from investment were taxed at 5%. However, under the Law on Foreign Investment in Vietnam, they are now exempt from this tax.

Such tax exemption will also be applicable for overseas Vietnamese who invest in the homeland and foreign residents in Viet Nam. These incomes include income taxes that have been repaid for reinvestment and incomes earned from transferring capital or buying stock shares.

The new corporate income tax of 28 percent, compares with the previous 32 percent for domestic enterprises and 25 percent for foreign. This will create equality and transparency between them, the Ministry said, stressing this new tax approximates to that of other regional countries, for example, China and Malaysia.

The Government also abolished the 50 percent tax rate imposed on incomes of foreigners in Viet Nam and raised the taxable income to 5 million VND from the previous 3 million VND for Vietnamese citizens.