The Ministry of Planning and Investment is drafting a Decree on the establishment, management and use of the Investment Support Fund. The most important question is, which investors will benefit from these support policies?
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| Production line at a Samsung Group factory in Vietnam. Photo: Duc Thanh |
Concerned about the beneficiaries
The Draft Decree on the Establishment, Management and Use of the Investment Support Fund has just been released by the Ministry of Planning and Investment for public consultation. At the Workshop on the Draft held yesterday (March 5), many investors in attendance expressed concerns about the scope of application.
“US businesses affected by the global minimum tax are from many different industries, not just high-tech. If the regulation only supports businesses in the high-tech sector, it is too narrow,” said Ms. Virginia B. Foote, Vice President of the American Chamber of Commerce in Vietnam (AmCham).
According to Ms. Virginia, it is also necessary to clarify the regulations on the criteria of “enterprises with investment projects for R&D centers (research and development)”, because there are enterprises that invest in R&D activities, but do not build a separate R&D center. In this case, will investors be supported or not and how will they be supported?
Meanwhile, a representative of NIDEC, a company investing on a large scale in high-tech parks, said that it is necessary to consider investment support on a group-wide scale. “NIDEC has 13 subsidiaries in Vietnam, so when considering support, it is necessary to consider the total investment scale of these companies. This is to ensure that businesses are encouraged to invest deeply in the Vietnamese market,” said a representative of NIDEC.
The above recommendations stem from the proposal of the Ministry of Planning and Investment in the Draft Decree that the subjects receiving support from the Investment Support Fund will be enterprises with investment projects in the field of high-tech product manufacturing; high-tech enterprises; enterprises with R&D center investment projects. Along with that, these enterprises must also meet one of the criteria such as achieving an investment capital scale of over 12,000 billion VND, achieving revenue of over 20,000 billion VND/year, or must complete the disbursement of at least 12,000 billion VND within 3 years...
Even, according to Mr. Do Van Su, the Drafting Committee plans to add the beneficiaries of support to be enterprises investing abroad that meet the criteria on investment capital, revenue, disbursement progress, as well as state-owned enterprises leading the economy, meeting the criteria on total assets, financial efficiency, brand, management capacity, etc.
Explaining this, Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc said that the Draft was not designed to compensate investors affected by the global minimum tax, but without discrimination, regardless of whether the enterprise is domestic or foreign, an operating enterprise or a new investment, if it meets the set criteria, it will be supported.
“There will be no asking or giving. Everything will be regulated transparently, clearly, in accordance with international practices, in accordance with OECD regulations; processes and procedures will also be built to create convenience for investors and state agencies,” said Ms. Ngoc.
Support policy will be stable and long-term
A series of investment support policies, from supporting R&D activities, supporting the production of high-tech products, supporting labor training costs, supporting fixed asset creation costs... have been proposed in the Draft.
Vietnam established the Investment Support Fund not to support businesses affected by the global minimum tax, but to aim at creating stability for the investment environment, as well as targeting investment attraction sectors that Vietnam is encouraging. 
- Ms. Nguyen Thi Bich Ngoc, Deputy Minister of Planning and Investment
However, commenting on the Draft, Mr. Hong Sun, Chairman of the Korean Chamber of Commerce in Vietnam (KorCham), said that the level of support is not clear enough to attract investment. “The conditions for receiving support are still limited. The criteria for the scale of investment projects to receive this support are very high, so it should be expanded and loosened so that more businesses can receive support,” said Mr. Hong Sun.
Mr. Nakajima Takeo, Chief Representative of JETRO Hanoi, also said that investment support should be provided to both small-scale enterprises that make large contributions to the supply chain and to the high-tech sector in Vietnam.
Sharing the same concern, Mr. Pham Minh Cao, Deputy Director of External Relations of Hyosung, is concerned about the regulation that projects must be disbursed within 3 years. “If we invest in the field of biotechnology, we may not be able to disburse within 3 years, but it may take 5-10 years to disburse all the resources of 12,000 billion VND, because we have to invest and research at the same time,” said Mr. Pham Minh Cao.
From another perspective, Mr. Cao also proposed supporting investment on a group-wide scale. Hyosung has invested more than 4 billion USD in Vietnam and plans to invest another 1.5 billion USD in Ba Ria - Vung Tau, but it is very likely that each project alone may not meet the criteria of 12,000 billion VND, so it will not be supported according to the Draft.
Meanwhile, what interests Ms. Dong Hong Hanh, representative of Samsung Vietnam, is that investors can receive support from the end of 2025, early 2026. According to Ms. Hanh, a clear and immediate support roadmap should be studied to stabilize the investment environment, because Vietnam has never applied a monetary support policy.
Concerned about the mechanism for receiving support, Mr. Vu Tu Thanh, Deputy Executive Director, US-ASEAN Business Council, raised the situation that if a business pays additional taxes and receives investment support from Vietnam, but the "mother" country does not approve, still considering that the investor is being exempted from taxes, what will happen?
In response to this question, Deputy Minister Nguyen Thi Bich Ngoc said that when developing the Draft Decree, international practices and OECD regulations had to be reviewed to ensure that no enterprises would have to return to their “mother” country. “The OECD has issued a global minimum tax policy, but has not yet provided specific guidance. Countries must both develop policies and consult the OECD. The ultimate principle is to follow OECD principles,” said Ms. Ngoc.
“In the immediate future, we will focus resources on supporting the high-tech sector,” said Ms. Ngoc, affirming that these policies are stable and long-term.
In addition to the Investment Support Fund, according to Deputy Minister Nguyen Thi Bich Ngoc, Vietnam is also reviewing the investment incentive mechanism to amend and develop a comprehensive policy. When completed, regulations on investment incentive support will be included in this policy, ensuring consistency, comprehensiveness and comprehensiveness.
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