Samsung wants to change the purpose of the R&D Center or transfer the building and its related land-use rights to another party, in case of necessity.
Samsung Electronics Vietnam (SEV) is seeking a number of preferential incentives for its upcoming US$220-million R&D center in the West of Hanoi.
The project, targeted to become the most advanced R&D center in Southeast Asia, would cover an area of 11,600 meter squares with a 16-floor building capable of accommodating 3,000 employees. SEV plans to start construction in early 2020.
Samsung’s current R&D center in Hanoi was set up in 2013 as a subsidiary of Samsung Electronics Vietnam Bac Ninh. The center is currently renting 12 floors at the PVI building in Pham Van Bach street, Cau Giay district, as its base.
Under the proposal, SEV want to be categorized as an export processing enterprise (EPE), for which import tax and domestic tax are not applicable to goods that EPE produces. Such a status would include all transactions related to a potential transfer of the project, the construction of office building and future activities.
Meanwhile, SEV expects to allocate part of the expenses and human resources of the R&D center for two of its four subsidiaries in Vietnam, namely Samsung Electronics Vietnam Thai Nguyen (SEVT) and Samsung Electronics Vietnam Bac Ninh.
SEV also look for financial incentives in terms of electricity cost and land-use rights for the project.
Notably, SEV said in case of necessity, the company would be able to change the purpose of the R&D Center or transfer the building and its related land-use rights to another party.
During the construction of the project, SEV proposed to be applied with EPE status for temporary locations of its R&D center.
According to the Ministry of Planning and Investment (MoIT), SEV is entitled to two types of preferential treatments, including the status of EPE, but not including transactions related to the transfer of the project, construction of office buildings and the allocation of expenses.
The MoIT said the establishment of a R&D center is a prerequisite for Samsung’ complexes in Bac Ninh and Thai Nguyen to enjoy their current preferential treatments.
Moreover, the operation model of the upcoming project is similar to that of Samsung’s existing R&D center, albeit at a permanent location to ensure long-term stability.
The MoIT said the inclusion of transaction related to the transfer of the project and construction of office building into the EPE status is in line with the overall incentive policy applicable to the project.
However, the ministry noted if Samsung wants to change the purposes of the project, all incentives in place will be reconsidered to see whether the new purposes fit the criteria for preferential treatments.
Regarding tax incentives, the Hanoi People’s Committee previously said as of present, SEV does not provide required legal documents to be entitled for preferential treatments. Hanoitimes
Samsung would continue to increase investment in R&D and supporting industries in Vietnam and seeks more support from the Vietnamese government, said Lee Jae-young, vice chairman of Samsung.
Securities company KB Securities projected Vietnam’s GDP growth in the fourth quarter of 2019 to reach 6.95 - 7%, leading to the whole-year growth at nearly 7%.