VietNamNet Bridge - While foreign investors are treated as ‘VIP customers’, Vietnamese enterprises meet difficulties when working with authorities.

Viettel, the military telecom group, which is now making phone sets, wants to have investment incentives just like Samsung. It was proposed at a recent working session with the Ministry of Finance on electronics component import tax.

Do Thi Thuy Huong, member of the Steering Committee of the Vietnam Electronic Industries Association (VEIA), said that Samsung received approval after it showed the list of high-tech equipment it planned to import for production. It did not have to wait for the Ministry of Science and Technology’s (MST) inspection.

Vietnamese enterprises have to have their import equipment inspected by MST and other relevant ministries to be recognized as ‘high-technology production lines’.

“In general, it takes us (Vietnamese enterprises) more time than FIEs to follow the procedures,” Huong said.

“If we lodge complaints, we do not receive enough attention from state management agencies like FIEs,” she added. “This really discourages us.” 

The discriminatory treatment by Vietnamese authorities is one of the most common complaints.

Vietnamese businessmen want to access state support in the most convenient way and they want the preferences to be given equally to both Vietnamese and foreign invested enterprises.

“The preferences shown on paper are very attractive. But in fact, it is really difficult to access preferences,” Huong said.

Pham Chi Lan, a renowned economist, also commented that government agencies seemed to favor FIEs in an effort to lure foreign investors to Vietnam. 

However, she warned that to develop the economy, Vietnam should rely on domestic strength, and needs to focus on developing Vietnamese businesses, rather than relying on foreign direct investment.

Local newspapers reported that Samsung haggled over investment incentives, taking full advantage of its status as a big investor to claim unprecedented investment incentives. Many claims have been approved by government agencies.

Regarding support industries, Huong said that it was very difficult for Vietnamese enterprises to join the electronics manufacturers’ global supply chain.

Samsung, for example, has been followed by 60 satellite enterprises, including 50 from South Korea. 

The enterprises can also enjoy investment incentives related to land use right access and corporate income tax. 

In the latest news, Samsung Display in Vietnam received an investment certificate on August 6 to invest an additional $3 billion in expanding its factory in northern Bac Ninh province.  The additional capital increased the total for Samsung Display to $4 billion, following the $1 billion in capital invested for researching and developing high-resolution screens.

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