New incentives to favour innovative startups in Vietnam
New incentives to favour innovative startups in Vietnam
The fresh incentives of the government are hoped to facilitate thousands of local startups which have been struggling to survive the COVID-19 pandemic.
As of August 31, about 2,500 startups and related projects lured in the total investment of VND900 billion ($38.6 million)
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The newly-issued Decree No.94/2020/ND-CP outlining policies and incentives for the National Innovation Center (NIC) will officially take effect from October 5. Under the regulation, startups under the NIC will be entitled to the most favourable investment conditions such as having to deal with fewer administrative procedures and having 100 per cent land leasing cost for 50 years in high-tech areas.
Establishments in Hoa Lac Hi-tech Park will be exempt from infrastructure usage fees at the areas they lease as well as also land clearance expenses. Moreover, the startups will be able to enjoy a preferential tax rate of 10 per cent over the first 30 years, instead of the previous 20 per cent.
They will also receive a 5-year tax exemption for imported materials and equipment that are not produced domestically.
Startups focusing on clean energy and intermediate goods manufacturing will also be entitled to these boons.
The new decree will provide a life-line to startups thrown off by the impacts of the pandemic. According to Le Hoang Uyen Vy, co-founder of Do Ventures, investment in local startups fell by 22 per cent, from $284 million in 2019 to $222 million in 2020 due to the impacts of COVID-19.
She added that the social distancing and fluctuations in the global markets were the main reasons behind the interruption in investment activities.
Therefore, the incentives are expected to ease some of the startups' difficulties. As of August 31, about 2,500 startups and related projects lured in a total investment of VND900 billion ($38.6 million) since 2016 when Vietnam started a supporting programme to aid about 1,000 businesses by 2020.
