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Wednesday, June 19, 2024

More incentives proposed to boost Vietnam’s hi-tech industry

The Saigon Times

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HCMC – The Ministry of Planning and Investment in Vietnam is backing additional investment incentives to stimulate hi-tech sector growth.

The ministry is currently seeking feedback from the Ministry of Justice on a draft resolution concerning the addition of investment incentives for the hi-tech sector.

The move is aimed at enhancing the competitiveness and attractiveness of the business environment in Vietnam, given the global minimum effective corporate tax rate of 15% for large multinational enterprises (MNEs), which is due to take effect next year.

The Ministry of Planning and Investment has proposed pilot investment support policy for four categories of hi-tech business.

They comprise a company with investment capital exceeding VND12,000 billion or annual revenue of more than VND20,000 billion in hi-tech product manufacturing; and a hi-tech business undertaking a project worth more than VND12,000 billion or having annual revenue of over VND20,000 billion.

These also include businesses with projects applying hi-tech that have capital exceeding VND12,000 billion or annual revenue exceeding VND20,000 billion; and companies investing in research and development (R&D) centers with more than VND30,000 billion in capital.

The draft resolution also outlines four types of investment support, including training support, resource development, financial assistance for investment in fixed assets and social infrastructure, and support for production costs related to hi-tech products and R&D activities.

These proposals align with the Organization for Economic Cooperation and Development (OECD) guidelines for formulating investment incentive policies amid the enforcement of the global minimum tax.

While many countries in the region have already introduced investment support policies for businesses, these policies have not yet been detailed in legal documents in Vietnam, according to the ministry.

The draft resolution on pilot investment support policies for the hi-tech industry will be submitted to the National Assembly for consideration at the session next month.

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