Launching big deals
After much waiting, recently, the Government issued Decision No. 29/2021/QD-TTg regulating special investment incentives.
"The Government's decision to issue such a decision is right and the right time to compete for investment attraction with other countries in the region," said Mr. Nguyen Dinh Nam, founder and CEO of the Promotion and Cooperation Company. Investment in Vietnam (IPA Vietnam) told a reporter of Investment Newspaper.
In fact, the special investment incentive mechanism has been specified in Clause 2, Article 20 of the Law on Investment. Decision 29/2021/QD-TTg is a step to concretize incentives, time and conditions for applying special investment incentives.
Accordingly, there will be 3 levels of incentives applied to investment projects, depending on their ability to meet the criteria of high technology, technology transfer, added value, and the participation of Vietnamese enterprises. Chain.
In addition to corporate income tax incentives, investment projects that meet the set conditions are also exempted from land rent and water surface rent for 18-20 years, reduced by 55-75% of land rent, and water surface rent in the year. throughout the project lifecycle.
This can be considered a "terrible" incentive, because in fact, according to current regulations, the highest incentive that investment projects can enjoy is the 10% corporate income tax rate for 15 years. exemption for 4 years and 50% reduction for the next 9 years. Large investors investing in Vietnam such as Samsung, LG, etc. are also receiving investment incentives at this level.
Not only is it a great incentive, it is noteworthy that Decision 29/2021/QD-TTg has also set out transparent and clear criteria on the level of technology transfer, investment in R&D, and value creation. increase, there are enterprises participating in the chain, and at the same time classified into 3 different levels with specific criteria. This, as Mr. Do Nhat Hoang, Director of the Foreign Investment Department (Ministry of Planning and Investment) has repeatedly affirmed, shows the consistent position of the Vietnamese Government to give higher incentives to foreign investors. investment projects in the field of high technology, have great spillover.
When summarizing 30 years of attracting foreign investment, many economic experts say that Vietnam's investment incentive policies are still rampant and level, so they have not been able to attract investment in these areas. desiderate field. Decision 29/2021/QD-TTg, it can be said, is a breakthrough in Vietnam's investment incentive mechanism. In addition, the provisions in the Decision also show that the "post-audit" factor is the top concern. If investors do not meet the set criteria, they can completely "cut off" incentives.
Waiting for "giants"
A few months ago, when the Draft Decision on Investment Incentives was released for public comments, many people said that the criteria set out were quite difficult, making not all investors satisfied. can respond.
For example, with the criterion of the percentage of Vietnamese enterprises participating in the chain, level 1 is set at 30-40%; Level 2 is over 40% of Vietnamese enterprises participating in the chain and performing contracts for assembly, supply of components, materials and services to produce products. Correspondingly, the proportion of product costs generated by Vietnamese enterprises participating in the value chain is 30% and 40%.
Or the criterion of technology transfer, level 1 is technology transfer to 3 Vietnamese enterprises; Level 2 is technology transfer to 3 or more Vietnamese enterprises within 5 years from the time of investment certification for the project.
These are two important criteria that investment projects need to meet, if they want to enjoy investment incentives at level 2 and level 3.
According to the Vietnam Chamber of Commerce and Industry (VCCI), to meet the above criteria, large corporations will need a lot of time and effort to rebuild the chain, even support and train businesses. Vietnamese enterprises are capable of participating in the chain. Meanwhile, the gap between incentive levels is not too large, so there is no incentive for large investment projects to implement these additional criteria.
“For this policy to be practical and feasible, it is necessary to have solutions that are synchronized with other policies to help businesses meet pre-conditions to enjoy incentives, such as policies to support business development. in the country to meet the criteria and conditions for cooperation with foreign countries," said Mr. Nguyen Dinh Nam.
Mr. Nam also wondered about the criteria for technology transfer, because in fact, some core technologies and source technologies, few foreign investors are willing to transfer to Vietnam.
It is not unreasonable to say that the criteria given are quite high. However, this is understandable, because with the issuance of Decision 29/2021/QD-TTg, the Government is focusing on "eagles", not small and medium investors. Because it is a "special offer", the criteria set must also be high to screen qualified investors.
According to recent information, many large corporations are still "on the verge" of investing in Vietnam. For example, the Adani Group of Indian billionaire Gautam Adani wants to invest in the fields of energy and seaports in Vietnam; Amkor Technology Group wants to invest in a $1.2 billion project in Bac Ninh. Especially Intel, is planning to invest in phase II, with a capital scale of over 2 billion USD. When Intel proposed this project, Vietnamese authorities also considered whether this project met the criteria to enjoy a special investment incentive mechanism.
Obviously, the promulgated special preferential mechanism will increase the opportunity for Vietnam to attract the "giants"'. However, from another angle, talking to a reporter of Investment Newspaper, Mr. Le Quang Tuan, Head of Investment Department (Vietnam Economic and Cultural Office in Taipei) said that although he is very interested in the investment incentive mechanism, but in the current context, what many foreign investors look forward to the most is "when can they fly to Vietnam".
Covid-19 epidemic, anti-epidemic measures are delaying many investment plans of foreign investors. The Thang Long II Industrial Park project in Hung Yen of Sumitomo Group (Japan) is expected to be delayed by 1 year due to the epidemic. Hyosung's $1.3 billion project in Ba Ria - Vung Tau is also behind schedule, for the same reason. This is also something to be concerned about in the current context, if Vietnam wants to accelerate the attraction of foreign investment.
Source: Dau tu newspaper