Investors lack clear regulations
Investors lack clear regulations
The lack of clear and specific regulations on incentives offered for agricultural investment is the biggest stumbling block for foreign investors hoping to enter the industry.
Managing director of major US-based investment consultant BowerGroupAsia Inc, Nguyen Viet Ha, was quoted by Dau tu (Investment Review) as saying that the number of US investors in the Vietnamese agricultural sector is now negligible, though many US companies wanted to implement agricultural projects in Viet Nam.
Currently, only animal feed maker Cargill and Monsanto are operating in Viet Nam's agricultural sector.
Ha believed that policy impediments stopped investors from entering the market.
Foreign agricultural projects have theoretically got big incentives like exemptions or reductions in corporate income tax, import taxes, land rental and many other priorities, but there are no clear and specific regulations on how to apply these incentives. Most of these regulations are still on paper.
Though land incentives have been prescribed for foreign agricultural projects, many projects with regard to planting of forests and sugarcane have only found small areas of land compared with big areas licensed in their investment certificates, she said.
Credit policies for foreign agricultural projects have also become impractical because there is a belief that foreign investors do not need the credit support; or due to complicated and unclear procedures. Previously, US food and agricultural companies, including famous brand names like ACX Pacific Northwest, Case New Holland, Commercial Lynks and ConAgra Foods came to Viet Nam to explore business opportunities. Others who came here were Dantzler, Dragonberry Produce, Intervision Foods and John Deere along with Novick Industries, PTC International, TRC Trading Corporation, and Verdant Ocean. Wilbur Packing Company, Zafi Beverages and Agriculture Technologies were among a host of firms that showed up, but almost no investment deals were reported after the visit.
Experts hoped that the Trans-Pacific Partnership would open a new opportunity not only for agricultural exports and imports between Viet Nam and the US, but also for US investment in Viet Nam's agricultural industry.
However, they said, a lot depends on specific regulations that Viet Nam will apply and its measures to overcome impediments against foreign direct investment in agriculture.
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