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(VEN) - A conference on promoting investment in the Saigon Hi-tech Park (SHTP) recently took place in Ho Chi Minh City.
The Saigon Hi-tech Park authority set a target of attracting US$150 million in investment capital for SHTP in 2010, which is US$36 million more than 2009. Attracting more investment now takes the top priority in SHTP. Fields of operation in SHTP are being expanded and diversified to attract more investors that operate in the information technology (IT) industry.
With its multi-faceted potential, SHTP has attracted many foreign and domestic investors including big names like CMC, Intel, Vinagame, Datalogic, HP, FPT (the Corporation for Financing and Promoting Technology), and more.
Luong Van Ly, a member of the SHTP development strategy research team, said that SHTP is working hard to become a leading hi-tech park in Vietnam, which will coordinate with the Hoa Lac Hi-tech Park in the northern country to promote sci-tech and economic development in Vietnam. The SHTP authority is making plans and policies to attract much more investment to the hi-tech park in the coming time, which is expected to develop different industries, including microelectronics, semiconductor, information, telecommunications, energy, new materials, biology and more, in SHTP.
SHTP has so far licensed 41 projects, including 22 foreign direct investment (FDI) projects and 19 domestic investment projects, with a total capital of more than US$1.75 billion. These 41 projects provided jobs for 10,000 people and earned export revenues of more than US$259 million in 2009.
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Le Trong Hieu, head of the SHTP investment promotion and international cooperation department, said that SHTP has a favorable location, as it is situated near major routes and sites - Hanoi Highway, Saigon Port, Ho Chi Minh City Technical Teacher Training University and others. Adequate infrastructure in the hi-tech park includes water supply and drainage systems, wastewater treatment plants, electric power and gas supply networks, modern R&D facilities and workforce and other utilities. SHTP has been receiving great assistance from the Government and Ho Chi Minh City authorities. These assistance help SHTP develop strongly and attract domestic and foreign investors.
In the future, SHTP will construct a scientific zone, which is to consist of areas for scientific research and training, a multi-functional square, hi-tech production areas, a free trade area and more, at a big cost. More than half of this scientific zone will be trees and water surface that are expected to create an ideal environment for creation activities. In this regard, investment will be implemented promptly from when businesses register investment to when they begin operation.
Businesses say that to attract more investment to SHTP, apart from what the hi-tech park is doing, clear, proper tax and other policies are important.
SHTP now has different preferential policies for investors, including a zero (0) percent enterprise income tax for four years (from when the investor begins making a taxable income), a five percent enterprise income tax for the following nine years, a 10 percent enterprise income tax for the two subsequent years and a 25 percent enterprise income tax for the project's remaining years.
Other preferences include import tax exemptions for materials (equipment, machinery and others) that are imported to make up fixed assets, and land rent exemptions for R&D projects of leading international hi-tech groups. SHTP has proposed that the relevant authority license a 50 percent personal income tax reduction for people working in the park.
TMA Solution chairman Nguyen Huu Le said that a better marketing strategy is needed for strong investment attraction, and that SHTP should learn from China and Singapore's marketing experiences to do a better job in introducing SHTP's investment potentials and opportunities to foreign investors. It is necessary to have more concrete plans for investment attraction, while preferential policies need to be clear, he said.
Businesses also said that workforce has become a major difficulty. SHTP has a center training workforce for its businesses, but what the center has done, in addition to workforce trained by Ho Chi Minh City-based universities, are not enough to satisfy the businesses' demand for skilled workers.
Datalogic managing director Tran Tien Phat said that employees that businesses recruited and could recruit in general have poor skills so businesses usually have to retrain these people. This increases businesses' costs.
The fact that the SHTP training center does not satisfy its businesses' workforce demands might discourage potential investors to come to SHTP. Meanwhile, the personal income tax law still has a number of provisions that do not satisfy employee demands.
Bui Van Quyen from the Ministry of Science and Technology's representative office in Ho Chi Minh City said that bigger attention needs to be paid to R&D-related intellectual property regarding SHTP development.
Nguyen The Hung, acting director of the Southern Foreign Investment Center of the Ministry of Planning and Investment, said that apart from the above-mentioned suggestions, SHTP needs to attach much importance to scientific and technological research and application related to climate change dangers to cope with the increasing climate change phenomenon in Vietnam. This will help SHTP attract more investors in the future./.
By Hong Anh
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