The three SEZs, in the northern, central and southern parts of the country, will offer unprecedented incentives and looser restrictions, and therefore, will attract a lot of big investors, especially foreign.
The Ministry of Planning and Investment (MPI) hopes that from 2020, they will make up billions of dollars to GRDP (gross regional domestic product), and from 2030, thanks to SEZs, the average income of locals will be between US$12,000-13,000 per annum.
Currently, Vietnam has 18 SEZs and 325 IZs which also offer investment incentives at different levels. However, the SEZs to be set up will be larger and have special policies.
It is expected that the head of the SEZs will have more power than chairs of provincial people’s committee and SEZs will be central units.
A series of investment incentives in banking & finance, land, transport, tax rates and employment are being considered.
Vietnam may allow the establishment of specific monetary institutions and banks and the diversification of the types of transactions in line with international practices. SEZs may be allowed to use some free convertible currencies alongside with the local currency.
Businesses in the SEZs would be able to enjoy the preferential tax rate of 10 percent for 30 years, tax exemption for 4 years and 50 percent tax cut in the next nine years since the day they have taxable income.
A 17 percent tax rate would be imposed on income from investments in real estate projects.
Analysts are cautious about the prospect of SEZs in Vietnam. A WB report showed that 50 percent of SEZs in the world have sustained failure.
The face of Phu Quoc has changed rapidly in the last few years. From a pristine island, Phu Quoc has become one of the most active tourism areas in the country and the region. 254 investment projects capitalized at US$16.7 billion hade been registered on the island as of early 2017.