What benefits do FDI enterprises gain from the Investment Support Fund under the Global Minimum Tax Law? This article of DNP Viet Nam Law Firm analyzes the advantages that the investment support fund provides to FDI enterprises, including support for workforce training, fixed asset investment, high-tech manufacturing, and infrastructure development, thereby helping stabilize Vietnam’s investment environment.
1. The investment support fund helps with human resource training and the establishment of R&D centers
1.1. Objective
To encourage long-term investment in technology transfer, human resource development, and R&D activities in Vietnam.
1.2. Key details
Legal basis: Article 19, 26 of Decree No. 182/2024/ND-CP.
– Subsidy of up to 50% for workforce training costs:
- Covers expenses for training engineers, technical staff, and skilled workers in high-tech investment projects.
- Includes costs of hiring trainers, organizing in-house courses, or sending employees overseas.
– Support of up to 50% for establishing R&D centers:
- Applies to projects in priority sectors: semiconductors, AI, integrated circuit design, and smart technology.
- Covers capital expenditures for infrastructure, equipment, and research software.
1.3. Benefits
- Firstly, it reduces financial pressure on FDI enterprises investing in human capital and innovation.
- Moreover, it encourages high-tech FDI to establish local innovation hubs in Vietnam.
- As a result, it enhances the quality of Vietnam’s workforce and its integration into global supply chains.
2. The investment support fund assists in fixed asset investment and the production of high-tech products
2.1. Objective
To promote long-term capital investment and the establishment of modern production bases in Vietnam.
2.2. Key details
Legal basis: Article 21 of Decree No. 182/2024/ND-CP.
– Subsidy of up to 10% for fixed asset investment costs:
- Specifically, it applies to the construction of factories, the purchase of machinery, and production equipment.
- Furthermore, the support is granted based on approved investment projects that demonstrate clear economic and technical efficiency.
- However, the annual subsidy is capped at 0.5% of the project’s total investment capital.
– Incentive of up to 3% of value-added from high-tech products:
- Applicable to products listed in Vietnam’s priority high-tech sectors.
- Value-added is calculated based on the proportion of locally produced components versus imported inputs.
2.3. Benefits
- Firstly, it accelerates capital recovery, encouraging higher initial investment commitments.
- Moreover, it provides motivation to increase local content and domestic value creation.
- Finally, it adds technical and economic value to Vietnam’s industrial ecosystem.
3. The investment support fund assists in developing social infrastructure to support the investment project
3.1. Objective
To improve living conditions for workers and nearby communities, supporting sustainable and inclusive development.
3.2. Key details
Legal basis: Article 23 of Decree No. 182/2024/ND-CP.
– Subsidy of up to 25% for social infrastructure costs, applies to the construction of:
- Worker housing
- Schools and childcare facilities for employees’ children
- On-site medical clinics or health stations in industrial zones
– Projects must be within or adjacent to industrial parks or high-tech zones linked to the FDI investment.
3.3. Benefits
- First, it helps FDI companies create a stable and productive workforce.
- Moreover, it enhances the company’s corporate social responsibility (CSR) image in the local community.
- Finally, it supports compliance with international standards for responsible and sustainable investment.
4. The investment support fund helps maintain competitive advantages and strengthen long-term positioning in Vietnam
4.1. Objective
To ensure FDI enterprises retain cost efficiency and remain confident in long-term business operations in Vietnam.
4.2. Key details
- Importantly, there is no significant increase in overall investment cost, even with the implementation of the 15% minimum tax rate.
- As a result, there is a shift from traditional tax incentives to direct financial support, aligned with OECD guidelines and global best practices.
- Consequently, enterprises receive equivalent or even higher net benefits in a transparent and legally sound manner.
4.3. Benefits
- Firstly, it stabilizes investor sentiment, encouraging continued expansion.
- Moreover, it strengthens Vietnam’s position as a reliable and future-oriented investment destination.
- As a result, it attracts high-quality FDI in tech, digital transformation, and innovation sectors.
Implementing the global minimum tax is a necessary step in economic integration, but Vietnam has swiftly introduced the Investment Support Fund to balance interests. Through this fund, FDI enterprises enjoy a range of practical benefits. These measures not only help businesses offset the impact of the new tax, but also demonstrate Vietnam’s strong commitment to accompanying investors.
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