'Silicon Valley' hopes centre on software park Vietnam's very own 'Silicon Valley' will grow up in and around the Quang Trung Software Park, if hopes of the IT officials are realised. Construction work on the 40 hectare park, in Ho Chi Minh City, began last week. Municipal authorities say they have already received applications for space from three foreign and 15 domestic firms. Quang Trung should become the largest software production centre in the country, catering for 7,000-10,000 software specialists and earning US $200-300 million by 2005, says Deputy Chairman Nguyen Thien Nhan of Ho Chi Minh City People's Committee. Around US $12 million of city money is to go on infrastructure for the park, supplemented by US $3 million from the central government for telecoms. In July Vietnam's first software park opened in Ho Chi Minh City at a cost of US $1.8 million. The park should also attract firms which assemble and trade in hardware, and personnel training and research firms, Mr Nhan added. Companies investing in the park will enjoy preferential policies on corporate income tax and software exports, Mr Nhan continued. Companies will pay 25 % income while a four-year tax exemption will be granted to foreign-invested companies over the first four years of operation and a two-year tax exemption will be granted to domestic companies, he said. Foreign firms will also enjoy a 50 % tax reduction for the next four years while domestic companies will only receive two years. Income tax for Viet Kieu (Overseas Vietnamese) firms will be only 5 %. Software exports would incur no export taxes while a 50 % tax reduction would be applied to income earned from exports from the first year of exportation. Enterprises would not have to pay supplemental income tax (according to clause 10 of the corporate income tax law) and they would be completely exempted from VAT. Personal income tax would only be imposed on workers who earn more than VND 8 million (US $570) a month. Top government officials and Vietnam Post and Telecommunications have pledged to establish a US $3 million Internet gate for sole use in the park. Internet charges would be less than those of regional countries while US $2,000 in grants would be given to new companies for them to set up shop. One thousand young programmers would be provided with US $500 each. Cheap rents of US $4 per square metre per month have been promised to investors who utilise 10,000 square metres or more. Cheap loans worth up to US $7,000 should be made available to start-up companies in a bid to further encourage their development. Trafac Saigon is to build the park, according to Nguyen Cong Vu, its designer. Expected to start operations in January 2001, the 39.2 hectare site is divided into eight sectors for software production, administrative affairs, training and research, conferences and exhibitions, commerce and marketing, sports and physical training and amusement, housing for experts and a sector for auxiliary techniques. As many as 20,000 software engineers involved in software production and training programmers for the city should be accommodated by 2010.
