Samsung Electronics, the globe’s largest mobile-phone maker, has officially gotten a nod from the Vietnamese government to enjoy peak incentives for its investment expansion in the country.
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The Government Office just announced that “the government will continue granting highest incentives to the new investment project of Samsung Electronics if the project meets criteria and commitments like the Samsung Electronics Vietnam in Bac Ninh province.”
Kim Yong Seok, complex planning director of Samsung Electronics Vietnam, last week confirmed with VIR that Samsung had received a green light from the government to enjoy incentives. That means the firm will enjoy a 10 per cent corporate income tax for all products manufactured at the new factory instead of 25 per cent as commonly applied.
The announcement ended two years of negotiations between the South Korean firm and Vietnamese government about the incentives for Samsung’s investment expansion in Vietnam from $670 million to $1.5 billion to manufacture mobile-phones, cameras and other electronic products.
According to Vietnam’s Law on Enterprises, an investment expansion will not be granted incentives like a newly established project. But a Ministry of Planning and Investment source said Samsung would establish a new project, which could be built in a place two hours of driving from the existing factory in northern Bac Ninh province.
“The new factory could be built in Thai Nguyen province, Haiphong city or other places,” said Seok. He added Samsung had recently taken a tour to many provinces in the north for studying the investment location.
The Vietnamese government last year officially recognised Samsung Electronics Vietnam as a hi-tech firm, allowing the manufacturer to enjoy highest incentives with 10 per cent of corporate income tax for all products manufactured at its factory in Bac Ninh. But the government did not mention whether it would give incentives to Samsung Electronics’ investment expansion which was also proposed at the same time.