HCM City (VNA) – HCM City plans to provide further incentives for small- and medium-sized enterprises that invest in support industries, according to Nguyen Phuong Dong, Deputy Director of Department of Industry and Trade.
He said that support industries played an essential role in advancing the country's goal to become an industrialised nation by 2020.
A robust support industry, which is needed to improve the competitiveness of Vietnamese products, is seen as a top priority.
Support industries not only provide jobs and promote exports, but also prevent excessive dependence on imported goods and services, according to Dong.
However, their development has been slow in Vietnam because policies are not attractive enough to investors.
The country has achieved success in developing support companies for the motorbike and electrical appliance industries.
Some key sectors like machinery, garments and textiles, and footwear are hurt by the lack of support industries. This has caused them to depend excessively on imported feedstock and inputs, thus losing out on profits and competitiveness.
Dong said the promulgation of a new decree was important to creating a legal framework for State agencies to oversee and manage the sector.
The decree is expected to help support industries in key sectors like IT, electronics, automobiles, textile and garments, leather footwear and technology.
One of the major challenges to attracting investment in support industries in the city is the lack of clear policies and information about the field.
Most Vietnamese companies involved in support industries are small- and medium-sized, and many of them lack funds to invest in modern technology as well as human resource training or necessary technologies.
The country has only 656 enterprises producing spare parts compared to 58,000 businesses operating in the manufacturing industry.
According to the Ministry of Industry and Trade, the underdeveloped state of the local support industry has resulted in increased production costs, and a risk of bigger trade deficits with foreign partners and low competitiveness of Vietnamese products compared with regional peers.
Vietnam has to rely too much on imports of components and spare parts, mostly from China.
The Ministry of Industry and Trade recently completed a draft decree on developing support industries with many incentives.
The ministry has stressed the need for incentives for those operating in the support industry area because the sector is still in a primitive stage.
The top incentives include exemption of business income tax for organisations and individuals operating in the field and transfer of support industry technologies, according to the draft decree.
The state will support a maximum of 50 percent of funding for the training costs of technical staff of businesses operating in support industries.
Each employee would be trained only once with a training period lasting no more than six months.
The state budget will also support a part of the cost of advertising in mass media and registering trademarks for businesses' operations.
The funding to participate in local and international trade fairs and access market information will also be partly covered by the state.
There will also be a pilot programme lasting until 2020 that will cut 50 percent of personal income tax for people working as specialists or trainers in technology transfer in support industries for a maximum period of one year.
The incentives also include exemption from import duties for goods that are imported to create fixed assets for production of support industries.
The lending interest rate for projects in support industries will enjoy a preferential rate that will not exceed the maximum rate of 80 percent of normal rates for loans with a maturity period of up to 10 years.
There will also be centers for the development of support industries to be established across the nation.
The ministry said the policies to support the sector needed to be implemented before 2018 when the regional free trade agreement takes full effect.-VNA
See more
Investors upbeat about Vietnam’s industrial property market
Investors are bullish on Vietnam's industrial property market growth on the back of the nation's strategic location, sound infrastructure, and increasing demand for industrial space, particularly industrial parks that meet green standards, according to market research.
Vietnamese travel firms explore opportunities at int'l trade fair in Singapore
Vietnamese travel firms are attending the Asia International Trade Fair (ITB Asia 2024) in Singapore.
Forum connects Vietnamese, Belgian busineses
The Vietnam-Belgian business forum took place in Brussels on October 23, offering a chance for enterprises of the two countries to introduce their products and explore new cooperation opportunities.
Vietnam's exports to Singapore maintain high growth
Vietnam's exports to Singapore surged by 35.23% in September, maintaining a high year-on-year growth rate in the first nine months of 2024, at 31.55%.
Hanoi hosts textile & garment, fabric garment accessories expos
The Vietnam Hanoi Textile & Garment Industry and Fabric Garment Accessories Expos 2024 (HanoiTex & HanoiFabric 2024) is taking place in Hanoi on October 23 – 25 as part of a series of international exhibitions on Vietnam's textile and garment industry.
PM receives General Director of Russian oil and gas company Zarubezhneft
Prime Minister Pham Minh Chinh received General Director Kudryashov Sergei Ivanovich of Russian oil and gas company Zarubezhneft in Kazan on October 23 (local time) as part of his working trip to Russia to attend the expanded BRICS Summit.
Vietnam, Laos step up trade, tourism promotion
A Vietnam-Laos trade fair was kicked off in Phonsavanh township in Xiengkhouang province of Laos on October 23 as part of activities to celebrate the 75th anniversary of the traditional day of Vietnamese volunteer soldiers and experts in Laos (October 30, 1949 – 2024).
Reference exchange rate up 10 VND on October 24
The State Bank of Vietnam set the daily reference exchange rate for the US dollar at 24,260 VND/USD on October 24, up 10 VND from the previous day.
Nuclear power back on table to secure Vietnam’s energy future
In a move to secure Vietnam's energy future, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan has underscored the urgent need to restore investment in and develop nuclear power, placing utmost importance on safety.
Da Nang – India’s Ahmedabad new flight service launched
The Da Nang Department of Tourism and Vietjet Air organised a ceremony to launch a new flight service linking the vibrant central city of Da Nang with Ahmedabad, a cultural hub of India, on October 23.
Vietnamese goods enter US through global supply chain
The Saigon Co.op Distribution Company Limited (SCD) - a member of the Ho Chi Minh City Union of Trade Cooperatives (Saigon Co.op), and STC Natural Vina Company on October 23 held a hand-over ceremony for goods that will be exported to the US.
Vietnam’s first international semiconductor exhibition to take place in November
The Vietnam Semiconductor Industry Exhibition 2024 (SEMIExpo Vietnam 2024), will take place at the National Innovation Centre in Hanoi from November 7-8 under the theme of "Elevating Vietnam in the Global Semiconductor Supply Chain".
HCM City event promotes digital transformation
With the theme “Digital technology - a new growth driver for HCM City”, the two-day event officially opened to visitors at Riverside Palace in District 4 from October 22.
Vietnam Airlines, Garuda Indonesia strengthen strategic partnership
National flag carrier Vietnam Airlines and Garuda Indonesia have officially signed a Memorandum of Understanding on enhanced collaboration for the expansion of their strategic partnership.
Vietnam Motor Show 2024 showcasing green technology
The Vietnam Motor Show 2024 (VMS 2024) themed Accelerate to Green kicked off in Ho Chi Minh City on October 23, featuring 19 automotive brands and nearly 300 exhibitors.
Vietnamese steel industry under pressure amid protectionism tension and dumping
Facing the threat from Chinese steel and the tension of protectionism globally with the possibility of further escalation, whether the 'picture' of the Vietnamese steel industry will be brighter or not in the times ahead continues to form a question mark.
Vietnam’s lobsters claw back prominence in China
Vietnam’s lobster export to the Chinese market in January-September rose 33 folds year-on-year on the back of lower prices and stronger trade ties between the two nations, the South China Morning Post said on October 22.
Seafood exports to boom in year-end despite headwinds: Experts
The year-end festive season is expected as a stimulus to boost Vietnam’s exports of aquatic products despite various challenges, according to experts.
Banks show positive results during third quarter
Several banks have recently announced startling business performance results in the third quarter of 2024 and the first nine months of 2024.
Reference exchange rate up on October 23
The State Bank of Vietnam set the daily reference exchange rate for the US dollar at 24,250 VND/USD on October 23, up 10 VND from the previous day.