CITPs look for a common landscape to build sites

A new draft decree, to replace Decree 71/2007/ND-CP regulating concentrated information and technology parks, is expected to gear-up Vietnam’s software industry.

The draft, which is in the process of collecting recommendations before being sent to prime minister for approval before the close of this year, will be the first legislative move on concentrated information and technology parks (CITP).

Deputy Minister of Information and Communications Nguyen Minh Hong stressed the role of establishing of CITPs because they would help Vietnam attract more local and foreign software giants.

“Moreover, CITPs will help the nation complete technical infrastructure, build a favourable business environment for applying scientific research, encourage setting up new technology enterprises and develop the existing ones,” Hong said.

At present, Vietnam has seven CITPs with Ho Chi Minh City having four and one each in Hanoi, Danang and Can Tho. The parks are home to 715 enterprises and 30,000 workers.

However, many experts criticised that the draft decree was disproportionate with reality.

“The regulation on initial software area of at least 10 hectares is rather small to establish a CITP and difficult to attract investments,” said Chu Tien Dung, chairman of Ho Chi Minh City Computer Association and general director of Quang Trung Software City (QTSC).

Nguyen Huu Le, CEO of TMA – a software outsourcing company in the QTSC shared a similar concern.

“The 10ha limit in the draft decree would reduce CITPs’ attractiveness to investors,” Le said, adding that his company’s decision of locating in the QTSC was to make full use of the park’s completed infrastructure facilities and services, and allowed it to use the park’s brand name to attract local and foreign partners.

Apart from the QTSC, which has already promoted a comprehensive and effective development strategy and investment promotion policy, other CITPs across the country are hitting hardship of attracting both domestic and foreign IT investors.

To boost the development of CITPs nationwide, in 2008, Vietnamese government decided to spend VND2 trillion ($100 million) to build and improve infrastructure facilities of CITPs, a four-fold jump against 2005.

“However, the development of CITPs in Vietnam has not kicked into gear,” said Hong.

Dung suggested some key issues needed to be timely addressed to boost the sustainable growth of CITPs, such as completion of hard infrastructure facilities including roads and airports, supply of skilled workers to meet investors’ demand and improvement of administrative procedures.

In addition, some recommended that the draft decree should offer more incentive policies for investors in CITPs including personal income tax exemption and reduction and favourable taxes on equipment used for research & development. – VIR

Tags: Vietnam software industry