SEV will build a US$300-million research and development centre in Ha Noi. — Illustrative image/ Photo bizlive.vn

HA NOI (Biz Hub) — Prime Minister Nguyen Tan Dung has given his approval to Samsung Electronics Viet Nam (SEV) to build a US$300-million research and development centre in Ha Noi.

Covering an area of 3ha in the city's Hoang Mai District, the centre will have a 21-storey building and will employ 2,000 labourers in 2016 and 4,000 in the coming years, depending on its business results. SEV will develop hi-tech electrical, electronic and telecommunication products in the project.

The project will run rent-free for 50 years, and will be divided into three phases. It will invest $50 million in the 2016-17 period, $150 million in 2018 and $100 million in 2019. The centre is expected to become operational by 2019.

The PM asked the municipal people's committee to conduct checks and to supervise the project.

The science and technology ministry is responsible for supervising SEV's human resource restructuring as well as other activities.

SEV has, in recent years, turned Viet Nam into one of its largest production hubs by investing nearly $15 billion in its complexes in Bac Ninh and Thai Nguyen provinces and in HCM City.

Samsung secured the government's approval late last year to raise its investment in another electronics facility to touch $2 billion.

Its operations around the country include the assembly of smartphones and televisions. Smartphones and electronics products, largely made by Samsung, have surpassed garment and footwear products to become Viet Nam's largest export earners. The value of smartphone exports rose 28 per cent last year to touch $30 billion, accounting for 18.6 per cent of Viet Nam's total export revenue.

SEV had earlier asked for various incentives, such as exemption from paying land taxes for 50 years, site clearance costs, import tariffs on equipment and devices for the R&D centre, and customs clearing procedures. In addition, the annual personal income tax of employees at the centre will be cut by half.

The establishment of the R&D centre was an obligation of SEV so that the smartphone producer could enjoy incentives for its complexes in the northern provinces of Bac Ninh and Thai Nguyen, the planning and investment ministry said in a report submitted to the PM.

The capital's government, meanwhile, has decided to use the city's budget to cover the infrastructure costs in the land plot where the centre will be built.

The expansion comes amid similar moves made by other electronics firms operating in Viet Nam, such as LG, Microsoft, Intel and Canon, besides Panasonic and Toshiba, helped by new free trade pacts and cheaper wages.

SEV has rented eight floors at PVI Tower for its R&D centre, named Vietnam Mobile Research and Development Centre (SVMC), which has 1,500 people. Last year, SVMC completed 10 software projects for the Southeast Asian market.

All the software was made by Vietnamese people.

"We are eligible to work for all R&D centres of Samsung worldwide. Several employees at SVMC also worked for other Samsung's projects," Do Duc Dung, head of SVMC's project management office, told Viet Nam News.

SVMC is participating in the implementation of 360 projects, of which 40 are globally used solutions, while the remaining commercial software projects belong to the centre.

SVMC claims about 10 per cent of the market share of the software used in Samsung's smartphones and tablets globally.

SVMC is the largest research and development (R&D) centre in the Southeast Asian region. Samsung has 25 R&D centres, specialising in research for its phones worldwide. — VNS