Shim Won Hwan, general director of Samsung Electronics Vietnam (SEV) said the South Korean firm had to make a final decision on expanding investment to $1.5 billion in Bac Ninh province, where it already has a $670 mobile phone factory.

"We are excited to expand investment in Vietnam, but we want to be sure that the expansion will enjoy tax incentives like a newly established project,” said Hwan.

 "Without incentives, our products will lose to other rivals. We are wavering,” he said.

The Vietnamese government last year recognised Samsung Electronics Vietnam as a hi-tech firm, allowing the manufacturer to enjoy highest incentives with a 10 per cent corporate income tax rate for all products manufactured at its Bac Ninh factory.

 However, the jury is out on whether this rate will also cover products produced by expansion facilities.

A Ministry of Planning and Investment (MPI) source said under the Enterprise Law, investment expansion will not be granted incentives like a newly established project.

Early this year, the government has assigned the MPI, Bac Ninh People’s Committee and other related ministries to study the possibility of giving incentives for Samsung’s expansion. The MPI source said the government would further discuss this issue.

"I know the government supports Samsung project and will find a way to solve this obstacle,” said the source.

Vietnam is among Samsung’s largest manufacturing bases. The Bac Ninh factory produces latest Samsung hi-tech products, serving the Asian and European markets. Samsung expects it will reach $16 billion in export revenue by 2015 in Vietnam.

From 2008 to early 2012, 32 foreign-backed companies announced to invest $450 million in Vietnam to provide components for Samsung’s products. By 2015, Samsung could need 96 foreign component providers and a similar number of local suppliers.