VietNamNet Bridge – More foreign investment is needed for
high-tech production, services and research in HCM City through to the end of
2015.
This is the viewpoint of Nguyen
Tan Phuoc, deputy head of the city's Export Processing and Industrial Zones
Authority (Hepza).
Although the city has attracted a
great deal of FDI in the processing and manufacturing industries, these sectors
have become less competitive due to high costs of labour and rising fees for
land rentals, he told the Dau Tu (Investment Review) newspaper.
As a result, city authorities
plan to focus on developing the southern economic region's competitive
advantages and hire experts and skilled labourers in industries that require
creative, intelligent and trained staff.
Phuoc said land rental costs were
higher in HCM City's industrial and processing zones than in other provinces
because the fees for land clearance and infrastructure investment in the city
were high.
Currently, only the Sai Gon
Hi-Tech Park and Quang Trung Software City offer preferential rates on land
rentals, but it can be difficult for a company to locate there due to strict
technology standards.
To enter the zones, a project has
to be approved by a technology council and investors must commit to contribute
1 per cent of their income and 5 per cent of its skilled employees to conduct
research and development activities in the zones. Because of these regulations,
many companies have decided not to locate in HCM City.
A beverage company from Japan,
for example, chose to locate its plants in surrounding provinces after
initially considering HCM City as a possible site.
A shortage of local labourers and
staff has also challenged investors.
Most employees at the industrial
parks in HCM City are from the central and Cuu Long (Mekong) Delta regions, so
it is difficult for the processing zones to have a stable supply of labourers.
Investors also have to pay higher
fees in HCM City and invest in accommodations as well as transportation.
This had caused companies to move
from the city to Binh Phuoc and Tien Giang provinces, Phuoc said.
In addition, there are no areas
left in HCM City that are considered disadvantaged, so preferential tax rates
given to investors in those areas are no longer being given.
A report from the Ministry and
Planning and Investment said the city had attracted about US$10.48 billion in
FDI.
VietNamNet/VNS
Business & Investment Opportunities
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