Support fund propels high-tech policy
Support fund propels high-tech policy
The Vietnamese government has announced financial support of up to 50 per cent for major initiatives in semiconductor manufacturing and AI.
High-tech developers and suppliers are being enticed to Vietnam through the fund, photo Le Toan |
A new investment support fund is expected to open up more opportunities to lure more high-tech activities into Vietnam, with the headline 50 per cent incentive set for projects with minimum investment of at least VND3 trillion ($118 million)
On the last day of 2024, the government issued rules on establishing, managing, and using the support fund to apply for the 2024 fiscal year. Through the fund, the government is willing to support costs for training, human resource development, research and development (R&D), creating fixed assets, production of high-tech equipment, social infrastructure, and more.
Developers must allocate VND1 trillion ($39 million) within three years of approval, and their ventures must lean towards positively impacting the innovation ecosystem.
Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc said that the move aims to lure foreign direct investment (FDI) in priority areas, especially high technology and R&D centres.
“Supporting these enterprises will contribute to enhancing Vietnam’s long-term position in the supply chain, especially in semiconductors and AI. The fund also encourages R&D activities in Vietnam, thereby developing a base of original technology and domestic sci-tech personnel,” she said.
Along with initial costs, enterprises will also be supported up to 3 per cent of the added production value of high-tech products in the fiscal year if they meet various criteria, such as a minimum revenue of VND200 trillion ($8.2 billion), a minimum workforce of 10,000 people, and an added value ratio of high-tech products reaching a minimum of 30 per cent.
The main source of the fund will come from the state budget, allocated in the Law on State Budget. The Ministry of Finance revealed that the initial capital is about $596 million.
Dao Quang Thuy, from the National Agency for Technology Entrepreneurship and Commercialisation Development under the Ministry of Science and Technology, said the policy will help entice high-tech giants and suppliers to Vietnam.
“This policy will be a strong competitive advantage for Vietnam in the race to pull in global funding, especially in the context that other countries are also promoting strategies of self-reliance in the semiconductor industry, increasing production value, and reaffirming their position in the global value chain,” he said.
The global minimum tax applied from 2024 has also affected Vietnam’s competitiveness. While some businesses consider new investment and expansion plans in Vietnam, many are waiting to monitor continuing government policy and other factors.
Since the support fund rules were issued, Bac Ninh province in the northern region has already approved numerous projects, including Samsung Display’s billion-dollar factory. This had been committed since last year but was only granted an investment registration certificate this month.
Many other large names have already set foot in Vietnam and expanded their plans, such as the $1 billion increase from semiconductor manufacturer Amkor, and the same figure from LG Display, in addition to hundreds of millions of US dollars coming from Foxconn, Goertek, and Luxshare initiatives.
