High tech investment into Vietnam manufacturing: Seize the opportunity.

 

The Covid-19 pandemic has been causing a huge shock in both supply and demand for the world economy. Many multinational high-tech manufacturing enterprises have oriented to seek investment opportunities or move production and processing facilities to countries other than China. This shift has been underway since the US-China trade tensions took place and was catalyzed faster by the pandemic. 

Currently, Vietnam is facing the opportunity to welcome this wave of shifts and changes in the supply chain because of the advantage of the pandemic control, which is a huge plus for the investment environment in Vietnam. 

In addition to macro factors such as political stability, GDP growth, disease control, and relatively competitive labor prices (the wages of manufacturing workers in China are now three times higher than Vietnam), a big plus is rental price of factories in Vietnam is lower than many countries in the region. Specifically, the rent in Ho Chi Minh City is about more than $5 - $6.0 USD/m2/ month or in Da Nang, for ready-built high-tech factories & hi-tech accessories are available at just. $3.9 USD/m2/month.

All of the above advantages are the foundation to create opportunities for Vietnam to receive not only large FDI capital but also small and medium sized manufactures in high tech and supporting high tech industries. However, to seize the opportunity, Vietnam needs to have appropriate attraction policies in this period.

By 2018, 3 high-tech parks in Vietnam, Ho Chi Minh City, Hoa Lac and Da Nang have attracted 218 projects with a total registered capital of nearly 10 billion USD, creating jobs for about 50,000 workers. Attraction activities of high-tech zones are changing positively, creating a foundation for the development of national scientific and technological potential. For example, Investment incentive policy according to Decree No. 04/2018/ND-CP dated January 4, 2018 Regulations on incentive mechanisms and policies for Da Nang Hi-tech Park:

Incentives for corporate income tax
- 10% for 15 years*
- Tax exemption for the first 4 years
- Discount- 50% discount for the next 9 years
- Projects from VND 3,000 billion: 100% land compensation and site clearance are exempted

 

Land rental incentives: In Construction period: Exemption for no more than 03 years from the date of issuance of the land lease decision (excluding cases of investment in construction, renovation and expansion of production and business establishments)

Exemption for the entire lease period for the project:
- Hi-tech application, manufacturing Hi-tech products according to the list specified by Prime Minister. 
- Hi-tech supporting industrial products;
- Hi-tech incubation, Hi-tech business incubation;
- R&D; venture investment
- Investment in the development of water plants, water supply and drainage systems;
- House;
- Building a human resource training facility that is

Exempte for 19 years for the following projects:
- Commodity exhibition center, supermarket, trade center
- Logistics center, goods warehouse (bonded warehouse, tax-suspension warehouse) )
- Fitness and sports center

Exempt for 15 years for projects:
- Investment and business in hi-tech infrastructure
- People's services (housing for experts, healthcare, cultural activities and other services related to the lives of residents in the Hi-Tech Park)Industrial Park

 

Currently, Da Nang is deploying the largest-scale factory for rent for high-tech and ancillary manufacturing industries. high technology. The project has a total scale of 29.6ha, invested by Long Hau Joint Stock Company (LHC), providing ready-built factories with flexible area from 1,500m2, including spacious workshop and office area. 2nd floor with modern design.

Currently, phase 1 with an area of ​​10,000m2 has been completed and handed over to 2 Japanese investors. The next phase with a scale of 10,000m2 is being accelerated, expected to be completed in October this year.
In addition to providing factories for lease, LHC also provides customer services to meet the diverse needs of businesses, including legal services such as applying for investment certificates, business registration, labor recruitment. , renovating and repairing factories...

Da Nang High-Tech Park in general and Long Hau Hi-tech Factory in particular - Da Nang are the ideal investment environment for businesses in the face of the current wave of strong investment shifts. With the comprehensive and quick support of Long Hau, the investment going into operation will be accelerated, reducing risks.

 

To clarify concerns about opportunities and challenges when choosing to invest in high-tech manufacturing in Vietnam, we invite you to attend a webinar organized by Long Hau Joint Stock Company (HOSE). -LHG) accompanies ICHAM & Datalogic Vietnam with the theme: “Is Vietnam an attractive destination for high-tech manufacturing?”.