Amata seeks incentives for Halong
Amata seeks incentives for Halong
Thailand’s Amata Group is asking for special incentives from the Vietnamese government for its $1.6 billion industrial park and township complex in the northern province of Quang Ninh province, enabling the complex to be competitive with neighbouring VSIP Haiphong and Dinh Vu industrial parks, both located in an economic zone.
According to Amata’s latest press release, the group will establish Amata City Halong JSC this September, in which Amata will hold a 70 per cent stake, with 29 per cent owned by Tuan Chau Investment Hi-tech Infrastructure Development JSC and 1 per cent held by Dao Thi Doan Trang. Trang is the daughter of Dao Hong Tuyen, chairman of Tuan Chau Group, the holding company of Tuan Chau Investment Hi-tech Infrastructure Development JSC.
This movement confirms Amata’s determination to develop the large-scale complex, the first of its projects in the northern Vietnam.
According to the group’s initial plans, the 5,800 hectare complex will feature an industrial park (IP), a residential township, a hospital, schools, an exhibition centre, a shopping centre, and an amusement park.
Under Vietnam’s existing legal regulations on tax incentives for such projects like Amata’s, companies investing within Amata’s future complex can get only two years of tax exemption and four years of a 50 per cent reduction on the 22 per cent corporate income tax (CIT) rate. In addition, there is no personal income tax reduction for workers in the industrial park’s tenants.
In comparison, as VSIP Haiphong and Dinh Vu are located within Dinh Vu-Cat Hai economic zone (EZ), their tenants are by default enjoying tax incentives offered to EZ including a 10 per cent CIT over a 15 year period, with the first four years exempt and the following nine years at a 50 per cent reduction. The rates are considered the highest of their kinds in Vietnam.
Therefore, Amata is seeking the Ministry of Planning and Investment’s (MPI) support to enable Amata City Halong’s tenants to enjoy a 10 per cent CIT rate over 18 years, with the first five years fully exempt, 50 per cent reduction on this rate over the next eleven years. In addition, it requested an 8 per cent CIT rate for hi-tech companies for the entirety of their lifetime, and a reduction by half of the personal income tax rate for hi-tech companies’ workers at the site. Amata also asked for an exemption on their land and water rentals.
However, the MPI said that Amata’s proposals far exceeded the existing tax incentives that the Vietnamese government had granted to IP tenants in an EZ.
Somhatai Panichewa, president of Amata (Vietnam) JSC, the developer of the Amata Bien Hoa industrial and township complex, and CEO of Amata VN Plc. (listed on Thailand’s stock exchange, and the developer of all future projects in Vietnam), explained that Amata asked for this support package from the Vietnamese government because it wished to increase its competitiveness against VSIP Haiphong – situated only 16 kilometres from the proposed Amata City Halong.
Amata has been investing in Vietnam since 1994, with its maiden project of Amata Bien Hoa, in the southern province of Dong Nai.
