Investment support fund aims to create stability, encourage capital flow into prioritised sectors

Friday, Mar 15, 2024 08:36

Production at Japan-invested R Technical Research Việt Nam Company Limited, Hoà Bình Province. The investment support fund will first focus resources on the high-tech sector. — VNA/VNS Photo Tuấn Anh

The investment support fund will foster the stability of the investment environment and promote the capital flow into prioritised sectors, according to Deputy Minister of Planning and Investment Nguyễn Thị Bích Ngọc.

Ngọc said this while hearing contributions from major investors and foreign business associations to the draft decree on the investment support fund as a solution to attract investment in the context of Việt Nam starting to adopt OECD’s global minimum tax rate starting from 2024.

According to Virginia B. Foote, Deputy Chairwoman of the American Chamber of Commerce, the US companies which are affected by the global minimum tax operate in various sectors, not only the high technology industry.

If the fund only provides support to investors in the high-tech sector, it is too narrow, she was quoted by Đầu Tư (Investment) online newspaper as saying.

It is necessary to clarify the regulations on the criteria for enterprises with investment projects in research and development (R&D) centres because there are enterprises that invest in R&D but do not build a separate R&D centre. In this case, would investors be provided with support or not, she questioned.

Hong Sun, Chairman of Korean Business Association in Việt Nam (Korcham), said that the support policies are not clear enough. Criteria to be eligible for the support remain high and should be expanded so that more firms can receive the support.

The support should be also provided to enterprises of smaller scale but contributing significantly to the supply chain as well as high-tech development in Việt Nam, Nakajima Takeo, chief presentative of the Hà Nội Office of the Japan Trade Promotion Organisation said.

Phạm Minh Cao from Hyosung Việt Nam said that the criteria for the support raised in the draft that at least VNĐ12 trillion worth (US$485.7 million) of investment must be disbursed within the first three years might cause difficulties for investors. For example, Hyosung invest in biotechnology, in which it is difficult to finish disbursement within three years, even 10 years, because the investment must be carried out along with R&D.

Cao added that the support should be based on the total investment of a corporation in Việt Nam rather than a single project or a member company.

In response, Ngọc said that the investment support fund should not aim to only support investors which are affected by the global minimum tax.

There will be no discriminations, regardless of domestic or foreign enterprises, existing enterprises or new investment, Ngọc said, adding that any firm meeting the set criteria will be eligible for the support.

The support fund will first focus resources on the high-tech sector, Ngọc said, adding that these policies are stable in the long term.

Besides, Việt Nam is reviewing investment incentives to develop a comprehensive policy framework to ensure the consistency and integrity, Ngọc said.

Under the draft decree, the fund will provide support to investments in high technology and R&D centres. In addition, investors must meet criteria, including investment from VNĐ12 trillion, revenue from VNĐ20 trillion per year, and complete the disbursement of at least VNĐ12 trillion within three years. — VNS

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