More groundbreaking policies to attract major investors.

With the Investment Support Fund expected to be established in 2024, a series of unprecedented investment support policies in Vietnam will be implemented. As a result, Vietnam will become even more attractive to major investors.

With the Investment Support Fund expected to be established in 2024, a series of unprecedented investment support policies in Vietnam will be implemented. As a result, Vietnam will become even more attractive to major investors.

Vietnam needs not only a well-structured strategy but also groundbreaking and superior mechanisms to attract investment. (Photo: Duc Thanh)

Breakthrough policies revealed

Following the consensus reached by the National Assembly Standing Committee at its recent session, the Government Decree on the establishment, management, and use of the Investment Support Fund is expected to be issued soon. Accordingly, a series of groundbreaking, outstanding, and even unprecedented investment support policies in Vietnam will be implemented.

For example, direct cash payments will be made to support a range of expenses, such as training and human resource development costs; research and development (R&D) costs; fixed asset creation costs; high-tech product manufacturing costs; social infrastructure investment costs; and other cases as decided by the Government .

The support rates are also very attractive. For example, support of up to 50% of the actual project costs incurred in the fiscal year for training and developing human resources for Vietnamese workers; or support of up to 30% of the actual project costs incurred in the year for R&D activities…

Specifically, the draft decree stipulates support for initial investment costs. The beneficiaries of this support are businesses with R&D center investment projects in the semiconductor and artificial intelligence sectors, with a maximum support level of up to 50% of the initial costs.

Of course, to receive support, investors and projects must meet the criteria set out in the Draft Decree. For example, to receive support for initial investment costs, businesses must meet conditions regarding capital, investment sector, etc., and it must be an R&D center investment project that has a positive impact on the innovation ecosystem and the development of new technologies and breakthrough products for the country.

For a long time, Vietnam has only applied investment incentives based on income (mainly through tax exemptions and reductions). Now, with the establishment of the Investment Support Fund, the incentives are based on costs and include cash support – something never before applied in Vietnam.

“The United States, South Korea, India, China, European countries, and many ASEAN countries such as Singapore, Malaysia, Indonesia, and Thailand… have implemented diverse and attractive investment support policies, applied in parallel with income-based and cost-based incentives,” said Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc, adding that, as a result, many countries have attracted large-scale projects in the high-tech sector.

Meanwhile, a report from the Ministry of Planning and Investment indicates that while foreign investment has continued to grow in recent years, the number of large-scale projects with high technological content remains modest. Currently, Vietnam has 110 active foreign investment projects with capital exceeding $500 million, of which only 27 are in the high-tech sector. Specifically, from 2013 to the present, only 59 large-scale projects exceeding $500 million have been established, averaging less than 5 projects per year.

The implementation of the global minimum tax rate from 2024 has also affected Vietnam's competitiveness. Some businesses have considered new investment plans and expansion in Vietnam. Several large corporations have surveyed and researched investment opportunities, but have not yet chosen Vietnam or are waiting to monitor the government's policy response.

Therefore, the establishment and effective use of the Investment Support Fund is necessary. The Standing Committee of the National Assembly, when discussing the Draft Decree, agreed with this.

Open the doors wide to welcome the "eagles" (large investors).

A delegation of American semiconductor companies, including major names such as Intel, Ampere, Marvell, Cirrus Logic, Infineon, and Skyworks, recently visited Vietnam to explore investment and business opportunities. Among them, John Neuffer is visiting Vietnam for the third time in his capacity as President of the Semiconductor Industry Association (SIA).

During his meeting with Prime Minister Pham Minh Chinh, John Neuffer reiterated the numerous new and significant opportunities for American businesses in Vietnam. “SIA and American businesses will continue to support Vietnam in developing its semiconductor industry and building a robust supply chain,” said John Neuffer.

It is necessary to issue a Government Decree to ensure the continued attractiveness of Vietnam's investment environment, meeting practical requirements and conforming to international practices.

- Mr. Le Quang Manh, Chairman of the Finance and Budget Committee of the National Assembly

Having visited Vietnam and returned, John Neuffer believes that investment plans by American semiconductor companies will continue in Vietnam. In fact, during his visit to Vietnam at the end of 2023, Mr. Neuffer mentioned that many American businesses are ready to double their investments in Vietnam.

Offering advice to Vietnam, John Neuffer suggested that Vietnam needs not only a well-structured strategy but also groundbreaking, superior mechanisms to attract investment. From this perspective, the establishment of the Investment Support Fund could create significant impetus for Vietnam to attract large investors and large-scale projects in pioneering industrial sectors such as semiconductors and AI.

Opportunities are opening up, especially after billionaire Jensen Huang's NVIDIA Corporation recently signed a strategic cooperation agreement with the Vietnamese government to establish NVIDIA's AI R&D Center in Vietnam (VRDC) and an AI Data Center. Details of these plans have not yet been revealed, but Minister of Planning and Investment Nguyen Chi Dung called it a "historic turning point."

"NVIDIA's development of an AI Research and Development Center in Vietnam will be a significant boost, helping Vietnam make major technological advancements in the future, and will have a ripple effect on other high-tech investors worldwide, especially in the field of AI, encouraging them to invest in Vietnam," Minister Nguyen Chi Dung stated.

With the boost from NVIDIA and with outstanding investment support policies, Vietnam is becoming even more attractive to major investors.

"We hope that Vietnam will soon issue a decree on the Investment Support Fund," said Choi Joo Ho, General Director of Samsung Vietnam, at a meeting with National Assembly Chairman Tran Thanh Man last weekend.

Samsung is also a major player, with its investment in Vietnam exceeding $24 billion. Besides the Samsung Display project, which recently received an additional $1.8 billion in funding, Samsung will continue to increase its investment in Vietnam in the coming period.

Source: https://baodautu.vn/them-chinh-sach-dot-pha-de-don-dai-bang-d232540.html