Much Room for Attracting Investment into Dak Nong IZs

Investment, construction and development status of provincial IZs has seen remarkable progress over the past year. Investment attraction into IZs has been improving. Particularly in 2011, investment licenses were issued to 4 IZ projects with total registered capital of VND172.5 billion, implementation fund of VND158.1 billion, renting area of 15.5 hectares; and adjustment was made to 4 project investment licenses to increase capital by VND119.5 billion. The total amount of new and increased investment in 2011 was VND277.6 billion.

 

Regarding accumulative investment attraction results by December 31st 2011, Tam Thang IZ attracted 28 investment projects, in which 23 are operating, 2 are having capital construction implemented and 3 registered for investment. They had total registered capital of VND1,169.1 billion and implementation fund of VND 966.9 billion; the IZ’s occupation rate was 62.2 percent (only projects operating and having capital construction implemented) and 67.5 percent (also including projects registering for investment). Concerning investment and infrastructure construction activities, Tam Thang IZ completed about 70 percent against the amount approved by the authority. Basically, the image of a modern IZ with varied sectors and fields has been formed to support provincial investment attraction.

 

Given such result, Mr Pham Van Hoa, Deputy Chairman of IZ Management Board, said that in general, investment attraction into IZs in 2011 did not bring about high efficiency and meet the set target (Tam Thang was expected to be occupied at 75 percent instead of 67.5 as at present). Due to the impacts of economic crisis, high interest rates and contractionary monetary policy of the Government, investors couldn’t mobilize capital to implement projects registering for investment in IZs. At the same time, poor provincial economic-social infrastructure and difficulties in transportation were also factors influencing investment attraction into provincial IZs.

 

In the province, there are IZs listed in the national development planning for IZs to 2015 and orientation to 2020 such as: Nhan Co IZ in Hamlet 12, Nhan Co Commune, Dak R’lap District added by the Prime Minister to Development Planning for IZs in Vietnam to 2015 and orientation to 2020 under Decision 1107/2006/QĐ-TTg dated August 21, 2006, on a planned area of 100 hectares.

 

Accordingly, concerning status of development planning on IZs in Dak Nong province by 2020, observing direction of Provincial People’s Committee and guidance of Ministry of Investment and Planning and stakeholders to develop Proposal adding Quang Duc IZ (expected area of 200 hectares) in Dak Ru commune, Dak R’lap District in Development Planning for IZs in Vietnam to 2020 to consult Provincial People’s Committee on submission for Prime Minister’s approval. IZs formed and being formed demonstrated that Dak Nong is a promising land with many investment opportunities for enterprises in the coming time.

 

Sharing about incentives when making investment into Tam Thang IZ, Deputy Chairman of Dak Nong IZ Management Board said that, concerning corporate tax, enterprises newly established from investment projects in Tam Thang IZ are given the following advantages: tax incentive of 10 percent in 15 years; tax exemption for 4 years, and tax reduction of 50 percent in the following 9 years.

 

 As for value added tax (VAT): tax rate of 5 percent is applied on some goods and services such as: clean water for production and daily life; fertilizer, ore for fertilizer production; pesticide and plant and animal growth stimulants; cattle, poultry and other livestock feed.

 

As for import and export tax: import tax exemption is applied for imported goods to make up fixed assets of enterprises, including: equipment, machines; specialized transporters in technology lines certified by Ministry of Science and Technology; transportation means for workers including cars with 24 or more seats and means of water transportation; materials for equipment assembling in technology line or component manufacturing; and building materials which cannot be produced domestically. Besides, businesses are also assisted in labour training.

 

Sectors given investment incentives in IZ include: products from beans, peas, vegetable, roots; corn starch production; coffer powder and instant coffee manufacturing; coffee, cashew, cocoa manufacturing for export; products from rubber such as rubber tubes and tyres; unbaked tile and brick production; plastic product manufacturing; microbial, NPK fertilizer manufacturing; sectors producing traditional handicrafts such as bamboo, brocade products, wooden products from existing materials; cattle, poultry and fishery feed manufacturing; machines serving agricultural, forestry production, food manufacturing, drainage and irrigation equipment; wind and solar electricity project; and ferrous metal production.

 

Apart from preferential incentives under governmental regulation, Dak Nong also issued many outstanding administrative reforms to fully observe Governmental Proposal 30; and develop and apply One-stop shop mechanism in implementing investment and corporate registration procedures in the province. The province also formed a department to receive and return results in the office processing files for enterprises investing in IZ, according to regulations.

 

In addition, given the motto of simplicity, convenience, accuracy, legal observance in taking administrative procedures, the office also regularly assists businesses and investors in the IZ; at the same time, saves time and transportation cost for enterprises and investors. For example, concerning files, documents, settlement duration reduction; businesses and investors can choose to take administrative procedures either directly in the office or via post.