Vietnam is about to enact legislation that could unlock significant foreign investment in its burgeoning semiconductor industry. The Ministry of Information and Communications has been leading the drafting of a law focused on digital technology.
The draft law includes essential provisions aimed at fostering the semiconductor sector, a cornerstone of Vietnam’s digital economy. Semiconductors are integral to the development of digital technologies, and Vietnam is positioning itself as a key player in the global supply chain.
Special Investment Incentives for the Semiconductor Sector
To encourage large-scale investment, the draft law proposes special incentives for both new and expanded projects in the semiconductor industry. These incentives include mechanisms for investment matching and targeted financial support, designed to attract high-impact projects that can accelerate growth across the sector.
One notable feature of the draft law is a framework for recruiting experts and talent within the semiconductor industry. This framework will help domestic technology firms and other key players meet the growing demand for specialized skills, a crucial element for sustained growth in the sector.
In addition to attracting investment, the draft law also aims to promote technology transfer and facilitate mergers and acquisitions among domestic and foreign companies. By encouraging such collaborations, the law hopes to create a more integrated and competitive domestic semiconductor ecosystem.
Streamlined Trade and Export-Import Procedures
The draft law also introduces a national one-stop mechanism to streamline export-import procedures for goods, raw materials, and components related to the semiconductor industry. This system, along with the proposed green lane, is expected to reduce logistical hurdles, improve efficiency, and support the global ambitions of Vietnam’s semiconductor companies.
Incentives for Research, Development, and Manufacturing
The draft law offers maximum incentives in terms of investment, tax, finance, credit, and land use to organizations and individuals involved in semiconductor research and development. These benefits will extend to semiconductor manufacturing enterprises and those supporting the supply chain, with the goal of creating a robust infrastructure to support the industry’s growth.
Special incentives are also outlined for key semiconductor projects, particularly those that involve building data centers, research and development hubs, and semiconductor manufacturing facilities. For large-scale projects exceeding VND4 trillion ($166 million), additional benefits will be provided under existing regulations.
Vietnam’s Long-Term Semiconductor Strategy
On September 21, Prime Minister Pham Minh Chinh signed a decision outlining Vietnam’s semiconductor development strategy through 2030, with a vision to 2050. This strategy aims to position Vietnam as a competitive and safe destination for semiconductor production and establish the country as a key player in the global semiconductor supply chain.
Key initiatives include the development of specialized chips and core technologies, fostering investment in research and innovation, and establishing a fully integrated semiconductor ecosystem. The government will create a fund to support semiconductor research and development, with an emphasis on creating domestic chip production centers to reduce costs and stimulate innovation.
Additionally, the strategy outlines maximum incentives for high-tech foreign-invested projects in the semiconductor sector, supported by both central and local government budgets. A steering committee on semiconductor industry development, chaired by the prime minister, will oversee and drive the implementation of these initiatives.
Vietnam’s forthcoming law on digital technology, with its focus on semiconductors, could be a game-changer for the country’s digital economy. By offering targeted incentives, streamlining procedures, and fostering talent, the law aims to unlock foreign investment and position Vietnam as a leading hub in the global semiconductor supply chain. With strong government backing and a long-term strategic vision, Vietnam’s semiconductor industry is poised for significant growth in the coming decades.
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