In a presentation to a delegation of South Korean businesses yesterday, Director Tran Phu Lu of the Ho Chi Minh City Trade and Investment Promotion Center revealed four key incentives the city offers to attract foreign investors.
Specifically, Ho Chi Minh City offers tax exemption or 10 percent reduction for a period of 15 years, or up to 30 years. Moreover, businesses will be exempt from import duties to create fixed assets, raw materials, supplies, and components for production as well as enjoy exemptions or reductions in land use fees, land rental fees, and land use taxes.
Last but not least, the city will offer a three-year land rental fee waiver during the construction phase, followed by an additional 15-19 year waiver depending on the project type. Additionally, investors will benefit from an incentive of accelerated depreciation, allowing for higher tax deductions.
The depreciation period for fixed assets ranges from 5 to 20 years by using the straight-line method. To facilitate investor entry into the local market, Ho Chi Minh City has upgraded 17 existing industrial parks, export processing zones, and high-tech zones.
The city is also pouring more money to invest in new industrial parks, increasing the total number of industrial parks to 23, while expanding and developing commercial infrastructure. The city also takes heed of training to improve the quality of human resources and creating a diverse ecosystem to support business investment needs.
Furthermore, the city is committed to administrative reforms, creating a transparent investment environment, and working hard to address difficulties which impede investors.
Representatives from various South Korean businesses noted that Ho Chi Minh City has a large consumer market with a population of over 10 million with an average income of around US$6,700 per year. Within a 50 km radius, it can access the market of the Southern Key Economic Zone of Vietnam with the population of 20 million.
This creates a favorable environment for South Korean businesses to increase their manufacturing investments and grow their market share in the country.
