09:53 | 28/03/2016 Investment
Prime Minister Nguyen Tan Dung has given his approval to Samsung Electronics Viet Nam (SEV) to build a US$300-million research and development center in Ha Noi.
SEV will build a US$300-million research and development centre in Ha Noi. — Illustrative image/ Photo bizlive.vn
Covering an area of 3ha in the city's Hoang Mai District, the centre will have a 21-storey building and will employ 2,000 labourers in 2016 and 4,000 in the coming years, depending on its business results. SEV will develop hi-tech electrical, electronic and telecommunication products in the project.
The project will run rent-free for 50 years, and will be pided into three phases. It will invest $50 million in the 2016-17 period, $150 million in 2018 and $100 million in 2019. The center is expected to become operational by 2019.
SEV has, in recent years, turned Viet Nam into one of its largest production hubs by investing nearly $15 billion in its complexes in Bac Ninh and Thai Nguyen provinces and in HCM City.
SEV had earlier asked for various incentives, such as exemption from paying land taxes for 50 years, site clearance costs, import tariffs on equipment and devices for the R&D centre, and customs clearing procedures. In addition, the annual personal income tax of employees at the center will be cut by half.
The establishment of the R&D center was an obligation of SEV so that the smartphone producer could enjoy incentives for its complexes in the northern provinces of Bac Ninh and Thai Nguyen, the planning and investment ministry said in a report submitted to the PM.
The capital's government, meanwhile, has decided to use the city's budget to cover the infrastructure costs in the land plot where the center will be built.
The expansion comes amid similar moves made by other electronics firms operating in Viet Nam, such as LG, Microsoft, Intel and Canon, besides Panasonic and Toshiba, helped by new free trade pacts and cheaper wages.
SEV has rented eight floors at PVI Tower for its R&D centre, named Vietnam Mobile Research and Development Centre (SVMC), which has 1,500 people. Last year, SVMC completed 10 software projects for the Southeast Asian market. All the software was made by Vietnamese people.
SVMC is participating in the implementation of 360 projects, of which 40 are globally used solutions, while the remaining commercial software projects belong to the center.
SVMC claims about 10 per cent of the market share of the software used in Samsung's smartphones and tablets globally.
SVMC is the largest research and development (R&D) centre in the Southeast Asian region. Samsung has 25 R&D centers, specialising in research for its phones worldwide./.