A production line at the Doosung Tech Co., Ltd. Viet Nam. — VNA/VNS Photo Danh Lam

HA NOI (Biz Hub) — South Korea was the top foreign investor in Viet Nam with total new and expanded investments of US$6.2 billion through October 2015, according to a report released on Monday.

The report released by the Foreign Investment Agency (FIA), of the Ministry of Planning and Investment, showed that South Korea had 583 new projects with total registered capital of $2.3 billion, and 257 expanded projects in the 10-month period with total registered capital of $3.9 billion.

Most of these projects were foreign direct investment (FDI) projects, the report revealed.

Malaysia was the second largest investor with total investment of $2.5 billion, followed by Japan and the United Kingdom, with total investments of $1.48 billion and $1.27 billion, respectively.

South Koreans invested in 16 sectors, mainly in processing and manufacturing industries, with total investment of $5.63 billion, or 90.3 per cent of their registered capital, during the period.

Electrical production and supply industry was the second largest field, with $200 million total investment, accounting for 3.2 per cent of South Korean capital.

As for the locations, they invested in 41 provinces in Viet Nam during the first 10 months.

The northern province of Bac Ninh attracted most of South Korea's investment in the reviewed time, with $3.33 billion, followed by southern Dong Nai province with $401.9 million and northern Hai Phong province, with $305.7 million.

In the first 10 months, Viet Nam attracted $19.29 billion of FDI projects, a year–on–year increase of 40.8 per cent. Meanwhile, FDI disbursement posted a 16.3 per cent increase to $11.8 billion, reported the FIA.

Finance ministry

The finance ministry has refused the proposal of Samsung Electronics Viet Nam Company requesting preferential corporate income tax treatment for some of its projects.

The ministry said Samsung Company's proposal either surpassed the current legal framework or failed to meet current regulations.

The company recently proposed to change the conditions to be eligible for corporate income tax preferential treatment. Specifically, it proposed to apply a tax rate of 10 per cent in 30 years for its projects that are currently implemented.

It requested a reduction of 10 per cent in corporate income tax payment during the whole implementation period for an investment project in Bac Ninh province, tax exemption in four years and tax reduction of 50 per cent in the following nine years.

However, the ministry said some projects could be considered for preferential tax as per the duration, but they must meet certain pre-conditions such as products with world competitiveness, earning a turnover of more than VND20 trillion (US$894 million) per year after five years once the project started to generate turnover and using an average permanent number of over 6,000 workers.

The prime minister would decide the eligible projects for preferential tax treatment of 10 per cent with the maximum period of 15 years.

The ministry said the current regulations do not regulate that a preferential tax rate of 10 per cent be applied during the whole implementation period of projects.

Regarding the company's proposal to continue getting the corporate income tax reduction of fifty per cent for three more years, Deputy Head of the ministry's Tax Policy Department Nguyen Quoc Hung said in a document sent to Samsung that it would surpass legal framework of the current Law on corporate income tax if Samsung company was allowed to get the tax preferential treatment for three more years.

The ministry asked the company to report to the prime minister. — VNS