Vietnam has been issuing many policies to actively participate in the Fourth Industrial Revolution. Vietnam has determined the key pillarsincluding developing human resource, improving labor productivity and national innovation capacity. Vietnamese government has been creating favorable conditions for foreign businesses to invest in Vietnam’s IT sector.
High technology law in Vietnam has been created a favorable environment for business development.
The high technology law was approved by the National Assembly of the Socialist Republic of Vietnam, this lawtookeffect from July 1, 2009. The law has many provisions that strongly support the development of high technology for both domestic and foreign enterprises. The highest incentives in terms of land, taxes and specific financial supports. All of these incentives are devoted inresearching, developing, transferring, training and using of human resources. A special feature of the High Technology Law is that individuals can also invest in hi-tech parks if they are approved by the Government. This is an unprecedented rule. High-tech venture capital funds are also encouraged from the state budget and other sources.
Tax incentive policy
In the recent years, Vietnam’s tax policy has been getting better and better. The corporate income tax policy has reformed. In addition, the National Assembly of the Socialist Republic of Vietnamrepeatedly adjusted to reduce the corporate income tax rate, which made the investment environment of Vietnam become more and more competitive than other countries in the region and around the world. Specifically, the corporate income tax rate has decreased from 32% in 1997 to 28% in 2003. Since 2009, the corporate income tax rate has been 25%. Currently, the corporate income tax policyhas established various incentive criteria, such as: geographical area, economic zone, hi-tech park; high technology sector, scientific research and technological development, especially investment in infrastructure development and high quality human resources in IT sector.
Expanding more incentives for foreign businesses to invest in IT sector
According to Decree No. 154/2013 / ND-CP, organizations and businesses implement new investment projects in the field of information technology in the centralized IT area of Vietnam, including: Research and Development, application, information technology transfer; producing and trading information technology products, providing information technology services; training human resources for information technology; technology incubation and information technology enterprises; promoting information technology trade… will receive various incentives. These incentives arethe significant supports including tax incentives, investment incentives and other preferential policies, such as: the corporate income tax rate will be 10% for 15 years, tax exemption for 4 years, 50% reduction of payable tax amounts for 9 subsequent years for new investment projects in the centralized IT area… The import tax is exempt for fixed assets and goods served the production of IT products and services.The process of importing and exporting IT machine, equipment and productsalso will be facilitated.
Vietnam has an abundant and potential IT human resource; the training demand for IT sector is huge.
Vietnam has more than 150 educational institutions with IT training. There are nearly 35,000 IT students graduated each year. Among them, approximately 30% of students work in IT businesses. Over the past 3 years, the number of jobs in IT industry has increased averagely 47% per year. However, the number of employees in this industry only increased at an average of 8%. The experts estimated that Vietnam will need about 78,000 IT employees each year and by 2020 Vietnam will lack about 400,000 IT employees. Because of this, the Vietnamese government has been paying great attention to develop high quality IT human resource to meet the need to accelerate the process of approaching the fourth industrial revolution. In addition, the Vietnamese government continues to focus on developing legal foundation, synchronous infrastructure, improving high quality human resource, and creating a favorable environment for domestic and foreign resources (including India) invested in Vietnam.
Vietnam – India cooperation in training high quality IT human resource: New opportunities for cooperation and investment.
Vietnam – India cooperation in IT sector has been expandingfor many years.The 12 important documents signed between the Governments of the two countries (2016), there were 2 documents of IT sector. Indiais a country that has advantages in the IT industry, has been assisting Vietnam in building projects on expanding software outsourcing and developing IT infrastructure.
Vietnam has great demand in developing high quality IT human resource to approach the 4.0 revolution effectively.Moreover, Vietnam has been issuing incentives policies in investment environment, tax and creating the legal corridor. This can be a great opportunity for Indian businesses and universities to invest in IT human resource training in Vietnam. High quality IT human resource from Vietnam will also be a promising market for Indian businesses in recruiting to expand their business in the coming years.