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Dak Lak is prominently placed in the South Central highlands, neighbouring five provinces (Gia Lai, Phu Yen, Khanh Hoa, Lam Dong and Dak Nong) and Cambodia. The province is linked to Viet Nam’s major cities with a system of highways and air routes and is an attractive destination for domestic and foreign investors as well as lovers of the Highlands.
Thanks to any early recognition of the limits to an economy based on agriculture and forestry, Dak Lak encouraged individuals and organizations to participate in the economy, establishing industrial and manufacturing enterprises in order to create employment for the local labour force as well as to attract human resources from other provinces. As a result the structure of Dak Lak’s economy has seen an increase in the share of industry and services and a relative decline in agriculture. Between 1996 and 2005 the share of agriculture, forestry and fisheries declined from 72.3 percent to 65.54 percent, industry and construction rose from 8.9 percent to 13.2 percent and services rose from 18.8 percent to 21.26 percent.
To attract investment, provide employment and raise revenues for the provincial budget, Dak Lak focusses on efficient allocation of resources, training for local government officials, administrative reform, infrastructure development and building an attractive investment environment. Dak Lak has established an industrial zone, several concentrated industrial groups and has simplfied regulations and procedures related to investment. Total investment in such developments has risen from VND 1,374,483 million in 2001 to VND 2,586,740 million in 2005, with the state budget contributing 56 percent of capital and the remaining 44 percent from other sources. As of December 2005, there were three foreign direct investment (FDI) projects with registered capital of USD 25.571 million and 77 domestic investment projects with the total registered investment capital of VND 508,368 million. Japan is the largest investor in Dak Lak with registered capital of USD 10.534 million, followed by the United States with USD 4.505 million and the UK with USD3.239 million.
The development of manufacturing and other business operations has helped increase provincial revenues from VND 1,559,827 million in 2003 to VND 2,563,227 million in 2005. Local government expenditureswere VND 2,330,021 million in 2005 with VND 620,905 million invested in provincial development.
However, there are few foreign investors in Dak Lak. In 2003, there was only one foreign company investing in Dak Lak with registered capital of USD 1.4 million. Between 1998 and 2004, there were four foreign invested companies registered in Dak Lak with total registered capital of USD 20.4 million.
Table: Foreign direct investment projects licensed 1998 to 2004
|
|
FDI projects 1988 to 2004 |
Total registered capital
million USD |
|
Lam Dong |
80 |
934.5 |
|
Gia Lai |
6 |
34.1 |
|
Dak Lak |
4 |
20.4 |
|
Dak Nong |
3 |
6.9 |
|
Kon Tum |
1 |
5.2 |
|
Central Highlands total |
94 |
1001.1 |
Source: GSO 2005
INVESTMENT INCENTIVES
Investment orientation:
Dak Lak is seeking domestic and foreign investments focusing on the following:
¨ Investments in construction and infrastructure, particularly traffic systems, power, water, information and communication, education and health. Build – Operate and Transfer (BOT) or joint venture projects are encouraged.
¨ Dak Lak gives priority to cooperation and joint ventures in cultivation, breeding, manufacturing and processing agriculture and forestry products and manufacturing high quality construction materials for domestic consumption and export.
Special importance is attached to exploitation industries including coffee, rubber and the manufacture of soft drinks. Projects using modern technologies with the capacity to promote the mutual development of other supporting industries and services and which undertake technology transfer are encouraged. The province is determined to accelerate the construction of industrial zones and concentrated industrial zones equipped with high techniques and technologies.
Main resolutions completed:
Overall planning and orientation of investment demands for all economic sectors; plans for land use and natural resources have been prepared and will be published to help investors in the preparation of their projects.
Dak Lak is developing detailed regulations and will soon apply soon the “one guichet” procedures in business registration according to the spirit of Inter-ministerial circular No. 02/2007/TTLT-BKH-BTC-BCA, dated February 27, 2007, of the Ministry of Planning and Investment, the Ministry of Finance and the Ministry of Public Security. This will ensure the rapid implementation of investment certificates and business registration certificates. Investors and businesses wishing develop projects in Dak Lak will need to contact only one agency for the settlement of procedures of investment and business registration.
Dak Lak Planning and Investment Department is the permanent authority of the investment council of the province and has responsibility for receiving dossiers and advising provincial People’s committee on investment projects.
The provincial State administration bodies will support investors in the deployment of projects following the receipt of an investment certificate.
The province is investing in high schools, universities and vocational training schools to build an educated and skilled workforce.
3. Investment incentives policy:
Appendix B provides a list of locations where investments will enjoy incentives provided in Decree 108/2006/ND-CP dated 22 September 2006. Dak Lak, in accordance with state policies and regulations on domestic and foreign investment, undertakes to create favorable conditions for the arrival of investors for research, market surveys and those seeking investment opportunities and investment promotion in the province.
All projects will enjoy land rents at the lowest rate. Dak Lak will also ensure a supply of essential services covering electricity, water, labor and information at low fees.
Projects in industrial zones, tourism, industry, breeding, fisheries and environmental protection will enjoy rates equal to 50 percent of general rent rates for the life of the project. The province will also assume 100 percent of the cost of site clearance for projects invested in industrial zones in accordance with planning.
Dak Lak encourages investment in afforestation, construction of accommodation for workers and public welfare works through the exemption of land rent.
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