The Vietnam Chamber of Commerce and Industry (VCCI) has suggested enhancing support for research and development (R&D) expenses to exceed 50% for foreign direct investment (FDI) enterprises, as indicated in its policy feedback submitted to the Ministry of Planning and Investment.
VCCI highlighted that with Vietnam’s forthcoming implementation of additional corporate income tax under the global minimum tax framework, it presents an opportune moment to enhance the nation’s investment support strategies. They emphasized that these changes would pose both challenges and opportunities for Vietnam.
According to VCCI, investment support policies offer adaptability, enabling the government to tailor support targets, forms, and content to guide enterprises in their investment endeavors, ultimately aiming for positive societal outcomes. Therefore, when crafting investment support policies, it’s crucial to consider options that achieve multiple objectives, supporting businesses while fostering long-term positive impacts on Vietnam’s socio-economic development.
The chamber recommended reassessing the current 50% cap on R&D expenses for FDI enterprises, suggesting that support levels could potentially increase to 75%, particularly if FDI entities actively employ local talents. Apart from the economic spill-over effects, this enhanced incentive could stimulate closer collaboration between businesses and research institutions, bolstering their capabilities and contributing to the country’s scientific and technological advancement.
Additionally, the chamber proposed introducing criteria related to the nationality of directly employed researchers to encourage the hiring of Vietnamese researchers and scientists for R&D activities.
Concerning support for fixed asset investment expenses, capped at a maximum of 40%, both movable and immovable assets should be allocated to R&D activities in the high-tech sector for at least three years. Furthermore, the chamber recommended a more detailed categorization of support levels based on asset types, with a preference for immovable assets.