On July 31, the Prime Minister of Vietnam approved four action plans under the framework of Vietnam-Japan cooperation through 2020 with a vision to 2030. According to these plans, the two countries will work together on the implementation of the Vietnam Industrialization Strategy. This strategy will focus on four industries: electronics, agricultural machinery, agro-fishery processing, and environmental industry and energy conservation.This also add a point to investment incentive in Vietnam.
Vietnam will focus on developing support industries, increasing labor productivity, and establishing electronic industry clusters to attract leading global electronics manufacturers. By 2020, the country hopes to produce better and higher value-added products for export as well as domestic consumption.
Production value is projected to increase at least 20 percent annually and contribute about 10 percent to Vietnam’s overall industrial value. By 2030, Vietnam also expects to become a major producer of electronic equipment using advanced and environmentally friendly technology.
In order to develop the country’s agricultural machinery industry, the government is developing a legal framework which will create a more favorable business environment for this industry. The government will also implement a number of support programs aimed at helping farmers obtain high quality products at reasonable prices.
According to this plan, by 2020 total agricultural output is expected to rise to US$430 billion from its 2010 level of US$220 billion. GDP per capita in the agricultural sector will also increase from US$740 in 2010 to US$2000 in 2020. By 2020, the agricultural sector is projected to make up 15 percent of Vietnam’s GDP and, due to improving technology and growing methods, the labor rate in this sector will decrease to between 30 to 35 percent of the total population.
Vietnam aims to become a supplier of high quality agricultural products that meet global standards. Due to their high production levels and stable quality, the main products included in the government’s plan are rubber, coffee, tea, shrimp, vegetables, and fruits.
Additionally, in order to meet the growing global demand for processed food, the government will support Vietnamese producers by helping to modernize their technology, and improve their marketing activities and brand building.
To make their products even more competitive on the world market, the Vietnamese government has also strongly encouraged local producers to produce products that meet world standards and that are able to be certified by such organizations as VietGap, GlobalGap, and Rainforest Alliance. This industry also gets investment incentive in Vietnam.
Environmental and energy conservation
To help build this sector, the government is encouraging the development of an environmental and energy-saving industry through the creation of preferential mechanisms and policies intended to attract both domestic and foreign investors. The government has also promised to subsidize and give multiple financial concessions to enterprises that are working in these fields.
The Vietnamese government provides a range of tax incentives; these apply to investment projects in specific sectors and areas with difficult socio-economic conditions as well as those in high-tech zones and economic zones in order to encourage the development of the economy, technology, and education of these regions. For example, newly established companies investing in Long Hau industrial park are eligible for Corporate Income Tax (CIT) incentive of 6 year period, includes: 2 year CIT exemption, and 50% reduction in the next 4 years. In general, the government tries to make more investment incentive in Vietnam.