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  Foreign Investment

Dung Quat zone woos US investors

In a Monday meeting with representatives of 60 American companies already operating in Viet Nam, authorities of the Dung Quat Economic Zone promised numerous business incentives to potential investors.

Le Hue, vice chair of the zone’s authority, said the central region where the zone is located had "comparative advantages, like a deep seaport and an airline facility".

Speaking at a luncheon presentation organised by the American Chamber of Commerce, he said companies setting up shop in the zone would be entitled to a five-year exemption of import duties on materials, raw materials and semi-finished products.

A preferential tax rate of 10 per cent would apply for the first 15 production years and a 50 per cent tax deduction for nine years thereafter, Hue said.

High-tech projects would enjoy a corporate income tax rate of 10 per cent for the entire project, and high-income earners would be entitled to a 50 per cent deduction of their income tax.

Foreigners with permanent resident status in Viet Nam and other foreign investors would be eligible to buy houses and lease residential land, Hue said.

At the meeting, Hue also announced two new projects that would be granted licences next month.

Taiwan’s Tycoon Blast Furnace Steel Project is a US$1 billion steel plant with an annual capacity of five million tonnes of ingots, and Korea’s Doosan Industry Complex Project, at a cost of $200 million, will manufacture power plant equipment and desalination plant equipment.

The multi-functional Dung Quat economic zone is designed for diversified investment, particularly in oil refining, petrochemical and heavy industries (steel mills, ship building, machinery and container vessels), consumer goods and export-oriented sectors.

The first phase of infrastructure construction has been completed, with new seaports, airports, internal roads, post and telecommunications services, power and water supply, and a solid waste treatment facility.

To date, 64 projects have been granted investment licenses with total combined investment capital of $3.15 billion.

The zone has thus far attracted two major projects, including a $2.5 billion project involving the Viet Nam Oil and Gas Corporation, and a $300 million investment by the Viet Nam’s Ship Building Industry Corporation.

Sixteen other projects are under operation, mostly in light industries such as garment making, wood processing, and building material production. Fourteen other projects are in the pipeline, with construction on buildings already begun.

Vietnamnews - (21/04/2006)

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