Vietnam’s Chip Ambition: New Legislation Aims to Lure Top Semiconductor Players and Cement its Status as a Global Hub
Vietnam Proposes Incentives to Attract Chip Companies
Vietnam is drafting a law to attract chip companies, offering various benefits such as tax breaks, faster export processes, and research expenses that are taxable up to 150%. This move aims to seize the opportunity of the technology war between China and the United States and push itself to be a center for semiconductor production in ASEAN.
The Digital Technology Industry Law outlines additional benefits, including grants, emergency visas, and the right to lease land without paying rent for 10 years. These incentives are designed to attract companies investing in technology and promote Vietnam as a hub for semiconductor production.
Key Benefits of the Law
- Tax Benefits: Companies investing in technology can enjoy a 150% write-off on research costs, as well as other tax benefits such as exemption from taxes on imported materials and personal income tax relief for projects over $160 million.
- Free Use of Land: The company can use the land without paying rent for a period of 10 years.
- Speeding up Visa and Export Processes: Measures to facilitate faster visa issuance and export processes.
- Grant Support: Companies can receive grants from the government to support investment and technology development.
- Training and Skills Development: Investments are being made in energy infrastructure and skills training to prepare for the semiconductor industry.
The law reflects Vietnam’s determination to attract chip companies, especially at times when companies are looking for new sources of production apart from China.
“I think the DTI bill shows Vietnam’s seriousness in attracting chip companies.” Baker McKenzie’s Manh-Hung Tran told Nikkei Asia.
In recent years, executives from chip companies such as Intel’s Pat Gelsinger and Nvidia’s Jensen Huang have visited Hanoi, revealing Vietnam’s efforts to attract them.
However, Vietnam still faces many challenges, such as complying with global minimum tax laws, budget control, and a shortage of energy and skilled labor.
Despite these obstacles, Vietnam has shown its determination to become a key player in the semiconductor industry by investing in infrastructure, energy, and training, and offering attractive benefits.
Source: Nikkei Asia