Cinderella sector offers incentives
Cinderella sector offers incentives
The Vietnamese government has issued a new decree that offers big incentives for both foreign and domestic investors to invest in Vietnam’s Cinderella sector of agriculture.
The decree which will take effect on February 10, 2014 is intended to stimulate investment in the country’s under-funded agriculture sector. Under the new decree, businesses investing in agriculture will enjoy a number of benefits. In terms of land, investors will be able to enjoy up a 70 per cent reduction in land-use fees depending on the type of project. Investors could also benefit from land and water surface rental fee reductions from the point their projects are put into operation.
In addition, under the new decree, businesses investing in large-scale cattle farms will receive support of VND3 billion ($142,857) per project from the state budget, while businesses investing in breeding high-yield dairy cows will receive VND5 billion ($238,095) per project to build infrastructure and buy equipment.
Investors will also receive other benefits such as human resources training, market development and science and technology applications.
According to the Ministry of Agriculture and Rural Development, foreign direct investment (FDI) has largely shunned the agriculture sector. Between 2009 and 2013, FDI in agriculture accounted for a meagre 0.55 per cent of the country’s total FDI during the period.
Domestic private businesses have also barely invested in agriculture. Between 2009 and 2013, only 3,486 agricultural businesses were established with a total registered capital sum of VND126.5 trillion ($6 billion) with 475 businesses eventually folding.
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