Foreign investors continue to urge Vietnam to soon issue investment support policies in the context of global minimum tax being implemented from early 2024.
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| A facility of Bosch Vietnam Co., Ltd. Photo: Le Toan |
There will soon be additional investment support measures
A few days ago, Lam Research Semiconductor Group (USA) came to Vietnam to look for investment opportunities. During a meeting with Prime Minister Pham Minh Chinh, Mr. Karthik Rammohan, Senior Vice President of Lam Research Group (USA), said that Lam Research aims to expand its operations and diversify its supply chain in the region. Asia.
Particularly in Vietnam, Lam Research plans to cooperate with Seojin Company (currently with factories located in Bac Ninh and Bac Giang) to develop a factory and supply chain for the semiconductor industry, with an investment of 1-2 billion VND. USD in phase I. After phase I, Lam Research can invest directly and continue to expand operations in Vietnam.
This information immediately received the attention of public opinion, when recently, many investors in the semiconductor field expressed interest in the Vietnamese market. However, the question is, will Lam Research decide to choose Vietnam?
In working with the authorities, as well as in the meeting with the Prime Minister, one of the issues that Lam Research is interested in is what are Vietnam's investment incentive policies? This is probably very important for not only the semiconductor sector, but for foreign investors in general, especially in the context of global minimum tax applicable from 2024.
In a recent working session with Minister of Planning and Investment Nguyen Chi Dung, businesses belonging to the US-ASEAN Business Council also expressed interest in implementing global minimum tax, as well as Establishment of Vietnam Investment Support Fund.
This is also a topic mentioned a lot at the annual Vietnam Business Forum (VBF) 2024, which recently took place in Hanoi.
Appreciating Vietnam's efforts to complete the Draft Decree on the establishment of the Investment Support Fund, Mr. Hong Sun, Chairman of the Korean Business Association in Vietnam (KoCham) said that the level of support in the Draft is unclear. “The Vietnamese government needs to carefully analyze and forecast the impact of the implementation of the global minimum tax, get widespread opinions from industries on the content of the Decree to amend and supplement, and thereby take measures. to avoid negative impacts on foreign investors," Mr. Hong Sun suggested.
Meanwhile, Mr. Gabor Fluit, Chairman of the European Chamber of Commerce in Vietnam (EuroCham) frankly expressed that the Vietnamese Government needs to take advantage of the opportunity that Pillar 2 (global minimum tax - PV) brings. to conduct a comprehensive review of current tax incentives.
“This includes carefully studying the impact of global minimum tax rates on the interests of current and future investors, and considering practical and effective solutions to ensure investment incentives on the right key projects and need to be encouraged, so that the application of Pillar 2 does not negatively affect the investment and business environment in Vietnam and still ensures to meet Vietnam's regulations and commitments in Pillar 2", Mr. Gabor Fluit suggested.
Propose to expand beneficiaries
A notable piece of information in recent days is that the US Government plans to spend 6 billion USD to support Samsung to promote the world's leading electronics corporation to continue expanding its investment activities in the US. Samsung Electronics is implementing a $17,3 billion project in Texas.
But not only Samsung, but the US Government, based on the Chip and Science Act, is also ready to support billions of dollars for TSMC (Taiwan) and Intel to encourage these businesses to produce semiconductor chips. in America.
The official global minimum tax regulation that will be applied from 2024 is causing concern for foreign investors investing in Vietnam that the tax incentives they currently enjoy may become nearly zero. meaningless.
– Mr. Hong Sun, Chairman of the Korean Business Association in Vietnam (KoCham)
Previously, Germany, Poland, and Israel decided to provide "huge" support for Intel, while Japan also devoted a large amount of resources to support TSMC... All to gain victory in the race to regain investment resources. large investment, especially in the fields of semiconductor chips and high technology. Not only investment recipient countries like Vietnam, but also major powers that are investment exporting countries, are also getting ready in this race. They even "play bigger", when they are willing to spend a lot of money on large-scale projects.
This reality is putting Vietnam in a difficult position if it wants to continue attracting new and retaining large investors. That is also the reason why when developing the Draft Decree on the establishment of the Investment Support Fund, the Ministry of Planning and Investment for the first time proposed monetary support, applying to 5 cost groups, including training and human resource development costs; R&D costs; investment costs to create fixed assets; production costs of high-tech products; investment costs for technical infrastructure systems.
“Such spending-based incentives can increase the likelihood of generating additional investment because they directly target investment costs,” Mr. Gabor Fluit expressed agreement.
However, according to Mr. Hong Sun, currently, according to the Draft Decree, the beneficiaries of support are limited to investment capital of 500 million USD or more, thus causing concern about the number of businesses. The possibility of receiving very little support and most foreign enterprises do not receive incentives.
“In case the investment activities of these enterprises are narrowed due to this regulation, it will negatively affect the production and business activities of all supply enterprises that have invested in Vietnam according to their enterprises. That industry, in the end, will cause obstacles to Vietnam's expansion of foreign direct investment attraction," Mr. Hong Sun said.
Having the same opinion, Mr. Seck Yee Chung, when representing the group of affiliated members speaking at VBF, also said that the preferential subjects in the Draft are still too narrow.
"With the condition of very high capital scale or revenue, only a very small number of businesses in the high-tech field can achieve it," Mr. The target is an enterprise operating in a high-tech park; If it is in the high-tech field, the investor should be considered as a large corporation, with an investment capital of 20.000 billion VND, or 1 billion USD or more, instead of considering each enterprise or project. .
According to Mr. Seck Yee Chung, many countries are making efforts to research and promulgate diverse investment support policies. For example, the US has launched a series of support packages worth hundreds of billions of dollars targeting priority sectors. Singapore also offers a refundable investment deduction policy that supports up to 50% of expenses that meet the conditions.
"Vietnam can research and refer to these policies in the process of developing support policies," Mr. Seck Yee Chung emphasized.
