Samsung’s confident pitch

This will raise the global electronic firm’s total investment in Vietnam to $3.5 billion since 2008.

A source from Samsung Electronics Vietnam, a wholly-owned subsidiary of Samsung, told VIR that negotiations between the South Korean firm and goverment agencies had entered the final round and could end this month. He added the investor planned to begin construction this month if things went smoothly.

Dang Xuan Truong, director of Thai Nguyen’s Industrial Parks Management Authority, confirmed that the provincial authority could grant an investment certificate to Samsung this month, after negotiations on project incentives finish.

Samsung on February 6, 2013 signed a contract with Vietnamese partners to rent 100 hectares at Yen Binh Industrial Zone, Thai Nguyen, for 49 years for building this $2 billion project, its second factory in Vietnam.

When Samsung’s second facility goes into operation, Vietnam would become the firm’s largest manufacturing hub for handsets.

Samsung’s existing facility in northern Bac Ninh province’s Yen Phong Industrial Zone went into operation in 2009 and last year churned out 100 million mobile phones and now employs 24,000 local workers.

This plant had initial investment capital of $670 million and was licenced to raise the investment capital to $1.5 billion in November 2012. Currently, the factory in Bac Ninh produces all of Samsung latest hi-tech products like Galaxy S III, Galaxy Tab 7 and Galaxy Tab 10, serving the Asian and European markets. Samsung expects it would reach $16 billion of export revenue by 2015 in Vietnam.

To encourage Samsung to expand investment in Bac Ninh, the government agreed to recognise this firm as a high-tech enterprises in accordance with Vietnam’s High Technology Law. This means Samsung can enjoy the highest incentive of corporate income tax at 10 per cent and also enjoy import tax exemption within the first five years.

For the project in Thai Nguyen, Thai Nguyen Provincial People’s Committee proposed a preferential mechanism for this project including a 10 per cent corporate income tax within 30 years, free corporate income tax within four years since it gains profits and a 50 per cent corporate income tax.