Danang Unveils Competitive Policies to Attract Investment in the Semiconductor Industry

With the attention, direction, and support of the Central leadership, on June 26, 2024, the National Assembly passed Resolution 136/2024/QH15 on the organization of urban administration and piloting mechanisms and policies for the development of Da Nang City with specific incentives to attract strategic investors and partners in the field of semiconductors.

Specifically, for strategic investors , enterprises will be leased land by the State without having to go through land use right auctions or investor selection bidding; they can choose to have the State lease the land and collect the land rent once for the entire lease term. They can also include 150% of their actual research and development (R&D) expenses in deductible expenses when calculating corporate income tax and enjoy priority in customs procedures as prescribed by customs law and tax procedures.

For strategic partners , enterprises will be directly leased infrastructure information assets by the State without going through auctions; be appointed by the State to procure specific equipment; receive support of up to 5% of the total cost of purchasing production support equipment, asset relocation costs, production lines, equipment, technology, and new investment project costs. To enjoy the incentives for strategic investors and partners, enterprises and investors must not only meet the requirements in terms of capital, revenue, technology, etc., but also have long-term cooperation agreements with the city in training human resources, technology transfer, and expanding investment in the city. These contents are detailed in Resolution No. 136/2024/QH15 of the National Assembly.

For investment activities in the fields of semiconductors, artificial intelligence, information and communications, science and technology management, and innovation : Corporate income tax exemption for a period of 5 years from the time of taxable income occurrence. Exemption from personal income tax and corporate income tax for organizations with income from the transfer of shares, capital contributions, and the right to contribute capital to innovative enterprises, semiconductor, and artificial intelligence activities (which have not yet offered securities for sale to the public) for a period of 5 years from the time of capital contribution to the enterprise.

Exemption from personal income tax for a period of 5 years for income from innovation startup activities, design, manufacturing, packaging, and testing of semiconductors and artificial intelligence working at enterprises in the city.

For students and experts in the semiconductor industry, the city will support training and fostering costs for those who study the semiconductor industry major; enjoy preferential treatment in terms of income and accommodation expenses.

In addition, based on the above policy support and incentive orientations, the City People’s Committee is urgently completing the draft Resolution on policies to support the development of the semiconductor and artificial intelligence industries in Da Nang City; and submitting it to the City People’s Council for approval at the end of 2024, so that it can be issued and applied from the beginning of 2025. This will contribute to creating a favorable environment, encouraging, and attracting students of the semiconductor industry, experts, and intellectuals to work, teach, and transfer technology, as well as investors and strategic partners from countries with developed semiconductor industries such as the US, Japan, Korea, and the EU…