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Foreign investors tend to haggle about investment incentives
Robert Bosch Vietnam now waits for the final decision from the government of Vietnam on whether to give investment incentives to its expanded project. Prior to that, some investors also obtained the desired incentives after asking for preferences.
The story about whether Vietnam should please giant foreign investors by offering extra investment incentives has been once again heated up, after Robert Bosch Vietnam in Dong Nai province clamored for investment incentives for the expanded project.
Bosch has invested 100 million dollars in its factory in the southern province, while it plans to raise the investment capital in Vietnam to 322 million dollars by 2015.
However, Vo Quang Hue, CEO of Robert Bosch Vietnam. Said the plan on scaling up production in Vietnam would still depend on if Bosch can receive investment incentives. What Robert Bosch wants is to enjoy the preferential policies, including the corporate income tax incentives reserved for hi-tech enterprise.
At present, Bosch still cannot enjoy tax incentives as a hi-tech enterprise. Setting up factory in the Long Thanh Industrial Zone, the company also does not enjoy the corporate income tax as stipulated in the Decree No. 124 which guides the implementation of the Corporate Income Tax Law.
Even if Bosch could enjoy tax incentives now, it would not be able to enjoy tax incentives for the expanded project.
Bosch has got good news when Minister of Planning and Investment Bui Quang Vinh, after visiting the factory, believes that Bosch’s project can meet the requirements (the project in high-tech production and supporting industries) to be able to enjoy tax incentives.
Therefore, Vinh has told Bosch to send an official document to clamor for the preferences. Meanwhile, the Dong Nai provincial People’s Committee and the Planning and Investment Department would also send the documents, confirming the investment scale of the project. The documents would be submitted by the Ministry of Planning and Investment to the government, which would consider releasing a preferential mechanism for Bosch.
As such, everything now depends on the final decision to be made by the government. In the best scenario, the proposals by the investors get approval, and Vietnam will have one more foreign invested project to be able to enjoy specific investment incentives.
An official of the Ministry of Planning and Investment said on Dau tu that a lot of problems in the implementation of the investment incentive mechanism for foreign invested enterprises have been found.
The enterprises in industrial zones do not enjoy the corporate income tax incentives. Meanwhile, only newly registered investment projects can enjoy tax incentives, while expanded projects cannot.
This, according to the official, has led to the fact that a lot of expanded projects in the hi-tech field, in which Vietnam encourages investments, cannot enjoy preferences. Meanwhile, newly registered projects can enjoy incentives at the highest levels.
“Meanwhile, if comparing newly invested projects and expanded projects, one would see that the latter have higher feasibility,” he said.
As a result, instead of registering expanded investment projects, some investors asked for the permission to set up a new project to enjoy tax incentives. After that, they would merge the two projects into one.
“Investors won’t make investments if they cannot receive investment incentives,” said Ngo Sy Bich, Head of the Bac Ninh provincial Industrial Zone Board of Management, who is suffering a headache from Samsung case.
Thoi bao Kinh te Vietnam has reported that Samsung Electronics Vietnam (SEV) has asked for the preferential mechanism for the expanded part of its project to raise the total investment capital to 1.5 billion dollars. However, the proposal for incentives has not got the nod from the government.
vietnamnet
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