Intel, LG Chemical, AT&S, Samsung, and SMC have decided against large scale investments in Vietnam on the back of ‘limited investment support’, according to the Ministry of Planning and Investment–the MPI–and quoted in The Investor, the official mouthpiece of the government-backed Vietnam Association of Foreign Invested Enterprises.
The MPI has also said it is concerned that if no new incentives program is introduced it may lose some Samsung production lines to India and LG may suspend a US$5 billion investment in electronics manufacturing in Vietnam.
This stems from the introduction of the Global Minimum Tax which has seen corporate tax incentives significantly diminished for firms operating in Vietnam. An alternative ‘investment support fund’ has been proposed, however, this is yet to be legislated. A December 2023 draft included financial support for training and reimbursements for research and development conducted in Vietnam.
Of note, foreign-invested manufacturing enterprises in Vietnam have historically been able to receive a number of corporate income tax–CIT–incentives. The extent of these incentives has largely depended on several criteria, however, most manufacturing firms generally qualified for a 10 percent CIT rate for the first 15 years.
See also: Tax in Vietnam 2024: Quick Read