Hi-tech products must make up 60% of total annual revenue in the first three years and at least 70% from the fourth year, according to the law. Moreover, companies must ensure 5% of the staff are university graduates.
 

The Saigon Hi-Tech Park Authority (SHTP), which organized the seminar together with the city Department of Science and Technology and is home to hi-tech investors, said the requirements in the new law were hard for investors to meet, especially R&D.

 

R&D, SHTP and investors said, is good for Vietnam in the long run but right now it is an obstacle to attract investors because hi-tech multinationals always have R&D facilities elsewhere in the world. To carry out R&D, foreign investors should look at different factors, such as regulations on intellectual property and availability of expert labor, said Lam Vu Thao, Intel Products Vietnam’s site counsel. Moreover, some firms produce hi-tech products under franchises on technology inventions, instead of R&D investment, or use technologies from universities and research institutes for production, he said.

 

Le Thi Thanh My, deputy head of SHTP, said almost all the hi-tech products were for export, so enterprises do not need to invest in R&D in Vietnam to manufacture new products for the local market. The law offers incentives for hi-tech enterprises meeting the requirements, such as land and tax incentives. Investors can be exempted from the corporate income tax (CIT) for four years and enjoy a 50% reduction for another nine years.

 

The Government will focus investment on developing high technologies in areas such as information technology; bio-technology; new material technology; and automation technology. The law will also allow an expansion of international cooperation in the sector, especially with global entities with advanced scientific and technological competence. The law will also strengthen the country’s scientific and technological potential in order to boost industrialization and modernization, and international economic integration.

 

State money will also go to hi-tech programs and projects and import of technologies particularly relevant to the advancement of socio-economic development, national defense and security, according to the law.

 

International cooperation in developing hi-tech human resources will be encouraged, with priority given to training hi-tech students at universities, colleges and vocational schools in the region and the world. Implementation of a long-term plan on international integration in science and technology, boosting activities to seek and apply advanced technologies for Vietnam to increase its domestic research capability, and training organizations and enterprises are also part of the new law.

 

Vietnam has attracted some multinational firms like Intel, Nidec, Canon, Samsung, Foxconn, Sonion, Jabil Circuit, Global Equipment Services (GES), Compal, Bosch, Fujitsu, Toshiba, Renensas, AMCC and Panasonic.

 

They have building factories to manufacture semi-conductor chip, information technology, telecom, automation, precision engineering, new materials, nano-technology, and bio-technology factories working in sectors like health care, pharmaceuticals, and environmental protection.