Hau Giang Industrial Zones Offer Various Incentives for Investors

9:41:10 AM | 12/10/2020

Industrial zones in Hau Giang province are catching greater attention and becoming preferred choices of many investors. With the spirit of open cooperation, the Hau Giang Industrial Zones Authority always accompanies and supports investors when they carry out projects, from initiation to operation. The following is the interview by Vietnam Business Forum with Mr. Nguyen Phong Minh, Director of the Hau Giang Industrial Zones Authority.

Could you briefly introduce the current picture of industrial zones in Hau Giang province? What are specific and outstanding preference mechanisms and policies of the province for investors?

Hau Giang has adopted many right decisions on industrial development, constantly reformed administrative procedures, and improved the investment environment towards openness, transparency and fairness for investors. In particular, the Hau Giang Industrial Zones Authority has made every effort to provide favorable conditions for businesses to study, invest and execute projects while supporting, listening and promptly removing their difficulties in operation to draw more investors into industrial zones. Many large operational projects are completing the province’s industrial picture and helping economic growth, employment and income for workers.

According to Decree 118/2015/ND-CP dated November 12, 2015, as large-scale industrial zones in Hau Giang province are listed to locate in socially and economically difficult localities, investors there will enjoy many tax and land rent advantages as follows:

* Corporate income tax: 10%, applied for 15 years, from the first year with project revenue.

* Import and export tax: Companies are exempt from import duty on items used as fixed assets, inputs, supplies and components to carry out investment projects.

* Land rent exemption or reduction: Land rent and water surface rent exemption for 11 years from the date on which the project comes into operation. In case a tenant invests in an industry subject to investment incentives or special investment incentives, it will be exempt from land or water surface rent for up to 15 years, an increase of four years compared to the median.

In addition, carrying out the Government’s Decree 61/2018/ND-CP, dated April 24, 2018, on single-window mechanism for settlement of administrative procedures, the authority recently acted as a head agency to resolve all related procedures of investors. In 2020, the Provincial People’s Committee issued Decision 1309/QD-UBND on the list of industrial investment projects attracted into industrial zones and provide favorable conditions for investors to reduce processes, procedures and time for settling administrative procedures.

How do you assess investment attraction results and business performance of enterprises in Hau Giang industrial zones in recent years?

In recent years, investment funds have flowed into local industrial zones thanks to the advent of more large-scale projects. To date, the occupancy rate has reached 92% in large-scale industrial parks and 72% in small-scale clusters. As many as 57 investment projects have been licensed into industrial zones, including 55 manufacturing projects (six FDI projects) and two infrastructure business projects, with a total investment fund of VND73,277 billion (domestic) and US$488.4 million (FDI). By mid-2019, investors disbursed VND53,358 billion, accounting for 63% of the registered capital. As many as 41 projects are in operation, including major projects such as Minh Phu Hau Giang Seafood Joint Stock Company, Hau Giang Pharmaceutical Joint Stock Company, Lac Ty II Company Limited and Masan Brewery Co., Ltd. Several large-scale projects are under construction such as Song Hau 1 Thermal Power Plant and Sunpro Steel Mill.

In the past time, business performance in industrial parks has been relatively stable. Tenants greatly contributed to budget revenue growth, accounted for more than 80% of local import and export value, created jobs for many workers in Hau Giang and neighboring localities.

What solutions did the authority advise the government to support companies and help them deal with difficulties and promote business performance amid the COVID-19 epidemic outbreak?

The Hau Giang Industrial Zones Authority actively coordinated relevant bodies to advise the Provincial People's Committee on many solutions to support business performance as follows:

Going with tenants to prevent the COVID-19 epidemic from the early days to ensure a safe working environment. All workers fully apply epidemic prevention and control measures in business. The authority has proactively reviewed and grasped the situation to prevent infections in industrial zones.

Actively coordinating with tenants to manage workers, especially foreign workers, advising the Provincial People's Committee to tighten management of people subject to control measures. Appropriate policies are taken to support entry and mandatory quarantine of expert workers to ensure enough resources for companies to run their business operations.

Coordinating with the Department of Labor, Invalids and Social Affairs to promptly implement governmental policies and support packages for employees; reviewing and grasping the list of resigned or unemployed workers to have appropriate support, vocational training and social security policies.

Visiting and working with tenants and maintaining communication channels to quickly capture emerging problems and difficulties to have best solutions as soon as possible (the authority paid working visits to 22 tenants and many other meetings and discussions with them to troubleshoot their nuisances in the first 8 months of 2020).

Actively coordinating with local and external financial and credit institutions and central business support funds to deliver financial support and credit for businesses (interest rates and loans); carrying out loan packages to support salary payment for employees; rescheduling tax and fee payment.

Vietnam's extensive international integration and global investment shift trend are presenting a great opportunity for the province to draw investment funds. How has the Hau Giang Industrial Zones Authority prepared for this?

The enforcement of the EU - Vietnam Free Trade Agreement (EVFTA) and the EU - Vietnam Investment Protection Agreement (EVIPA) is offering a huge opportunity for Vietnam to integrate globally and attract external investment flows.

To prepare well for investment opportunities generated by these pacts, Hau Giang province, including the Industrial Zones Authority, has invested in completing industrial zone infrastructure, and created land funds for attracting investors. The authority also actively reviewed sector planning and proposed the Provincial People’s Committee to approve business lines and sector-specific subdivisions to facilitate and reduce the time of obtaining investment certificates for projects in industrial parks. The authority has also reviewed and streamlined procedures for foreign investment.

The authority is also carrying out planning procedures for new industrial zones to advise the Provincial People’s Committee to submit the planning to the Prime Minister for approval to meet the demand of domestic and foreign investors in the coming time.

Source: Vietnam Business Forum