Ninh Thuan will call for investment capital for 46 key projects from 2011 to 2015. It will offer the highest preferences for domestic and foreign investors involved in these prioritised projects. The Vietnam Business Forum Magazine has an interview with Mr Pham Dong, Director of Ninh Thuan Department of Planning and Investment, on these attractive preference policies. Trung Kien reports.
Nearly five years after joining the World Trade Organisation (WTO), Vietnam has had a lot of opportunities to attract foreign investment capital. How has Ninh Thuan province taken advantage of these opportunities to attract investors?
Stepping up international integration and improving provincial economic competitiveness is an objective of all tiers of government and businesses, as well as an important mission to sustain socioeconomic development.
To realise these goals, in addition to applying the highest preferences provided by the central government, Ninh Thuan province has actively stepped up international cooperation, international economic exchange, and investment promotion. In 2009 and 2011, the province coordinated with central ministries and agencies to successfully organise two investment promotion conferences to catch investment flows. In 2010, the province established and operated the Economic Development Office to support investors. With its active moves, the investment environment was getting better and locally strong fields like energy, urbanisation, tourism and mining caught the interest of investors. More investors came to the province to explore business opportunities than in previous years.
With these efforts, since 2006, the province licensed 146 investment projects with a total registered capital of VND36,288 billion (US$1.8 billion), of which 18 projects worth US$582 million are foreign-invested. Notably, the Provincial People’s Committee, the governing body, approved in principle 12 wind power projects, of which six were granted investment certificates to invest nearly VND17,000 and develop power plants totalling 525 MW. Outstanding projects include the 124.5 MW, VND5,200 billion Phuoc Nam power plant using renewable energies invested by Enfinity Asia Pacific Limited; and the 180 MW, VND6,537 power plant invested by Thuan Phong Energy Joint Stock Company. These large-scale projects have a ripple effect and create an important driving force to promote the province’s socioeconomic development. Both provincial authorities and investors are working to keep up the pace of investment projects. To date, 54 projects have been put into operation, of which 19 are operating in industrial and construction sectors, 15 are involved in the trade and service fields, eight are engaged in agriculture, forestry and fishery fields, and 12 projects are foreign-invested.
Besides, the Provincial People’s Committee signed comprehensive development cooperation agreements with other southern provinces and cities like Ho Chi Minh City, Phu Yen, Khanh Hoa, Binh Thuan and Lam Dong, in order to best apply economic advantages and infrastructure systems for regional socioeconomic development. It also concluded investment cooperation agreements with many large economic groups and potential investors like State-owned Vietnam National Oil and Gas Group (PetroVietnam), MK Group of South Korea, Federal Owens Group of the United States, Kachay Homes Inc of the United States, and Asia New Generation Company of Hong Kong to carry out large scale projects worth from US$500-800 million onwards in tourism, energy and agricultural sectors.
To assist investors throughout the process from studying investment opportunities to getting investment licences and carrying out projects smoothly and quickly, administrative reform plays an important role. How has Ninh Thuan province addressed this matter?
In 2010, the Binh Thuan Provincial People’s Committee established the Economic Development Office (EDO) affiliated to the Department of Planning and Investment. This office is operated under a new single-window mechanism designed on research from Singapore’s Economic Development Board (EDB) and Monitor Consultants’ initiatives. Accordingly, investors need to contact only EDO to complete business establishment procedures, consult investment policies, apply for investment certificates, and consult procedures relating to construction, land, environment, land compensation, site clearance and other procedures to carry out their projects.
After two years of operation, EDO has achieved good results and investors’ requirements are promptly settled. With the single-window mechanism, the time for settling procedures is shortened, even by one-third or half, the duration stipulated by law. For example, the time for granting investment certificate is shortened from 25 business days to 15 days, the time for granting business registration certificate, tax code and seal is reduced from 8 working days to 3 days. Simple procedures like tax code granting, tax declaration registration and location introduction are settled within a single working day. The office also hosts regular meetings with investors to hear the problems they face with procedures and introduce measures to address them.
With the new model and new method, Ninh Thuan province has made many positive changes in investment attraction in the past two years. The formation and operation of EDO has created a breakthrough in the local investment environment. This change is highly appreciated by investors and the business community.
In addition to drawing investment capital from all economic sectors, EDO has also attracted a lot of ODA and NGO funds for infrastructure construction, poverty reduction and integration of supporting resources to serve local development goals. From 2010 to date, the province has 28 ODA projects with total capital of VND2,952 billion (including VND2,187 billion from ODA donors like JICA, AFD, ADB, Belgium, the World Bank and IFAD). ODA projects focus on agriculture, health, education and training, transportation, irrigation and water supply which benefit local people’s lives.
To attract 46 investment projects from 2011 to 2015, what preferences will Ninh Thuan offer domestic and foreign investors?
Our 46 projects (including 25 specific projects and 21 desired projects) concentrate on prioritised industries like tourism and services; renewable energy; processing industry, clean industry, supporting industry; agriculture; medical training; construction and real estate; and transportation. Some of these projects were previously studied by investors but could not proceed because of financial difficulties. Now, the province adds them to the list.
Ninh Thuan offers the highest preferences for these 46 projects. Ninh Thuan province is an investment-encouraging province and its six districts are also special investment-encouraging localities. Accordingly, the province enjoys the highest preferences provided by the central government. Thus, investors will be given the best treatments in land, corporate income tax, import tax and other conditions. In addition, investors will enjoy double-incentives if they take on national business projects (also included in these 46 projects). Specifically, investors will be exempt from land rentals for 11-15 years if their projects are located in rural districts, enjoy preferential corporate income tax of 10 percent for 15 straight years from the first year having incomes, exemption from income tax for the first four years from the first year with taxable incomes and a 50 percent reduction over the next nine years, and exemption from import tariffs on fixed assets, based on the Import - Export Law.
Beside these, investment projects in Ninh Thuan province, depending on scale and industry, will be supported with infrastructure construction, land compensation, supporting facilities like water supply, electricity, traffic, worker training, and trade promotion.
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