There are some regulations in place offering high-tech enterprises preferential tax and credit policies but many analysts believe that access is an issue for most.

Management agencies and analysts discussed a range of measures at the recent fifth Vietnam Business Forum to help remove obstacles in the development of science and technology and innovation and, especially, in gaining access to capital sources.

Under existing regulations, a high-tech enterprise must have at least 70 per cent of its total yearly net revenue coming from sales of high-tech products.

However, analysts acknowledged that this is a major challenge for domestic businesses. Many face difficulties renewing technology due to limited financial capacity, making it hard for them to apply high technology in production and meet the required percentage of revenue from high-end products.

There also exits a legal gap as a result of inconsistency and a lack of synchronization between legal documents, creating difficulties for businesses and authorities in implementing preferential policies for high-tech enterprises.

No documents have been issued as yet to help high-tech businesses benefit from preferential policies relating to finance, credit, and taxes, according to analysts.

Regarding credit policy, high-tech development is one of five priority areas entitled to a short-term loan interest rate of 4.5 per cent, according to a State Bank of Vietnam (SBV) announcement. However, analysts said, banks often don’t provide loans to risky areas like new science and technology.

The cost of technology imports is huge, while the financial capacity of most businesses is limited.

Meanwhile, foreign businesses investing in high technology in Vietnam benefit from many preferential policies, especially tax incentives.

Therefore, providing Vietnamese high-tech businesses with tax and credit incentives would create motivation for research and development and re-investment in high technology, helping to raise their competitiveness.

In order to improve the effectiveness of preferential tax and credit policies, analysts suggested conducting surveys on the production capacity of domestic businesses to identify and adopt appropriate support measures.

Vietnamese businesses need support regarding capital, technology, production capacity, and output; seek the involvement of the State in creating appropriate support policies in imports and exports and training high-quality human resources; and require support from credit institutions and banks in offering businesses preferential loans.

In order to deal with the challenges and create motivation for businesses to renew technology in production and trade activities, the State should adopt comprehensive and strong policies, including those to create favorable conditions for businesses to gain better access to finance, credit, and tax incentives, according to analysts.

It is essential to have pilot preferential policies on credit and taxes for investment projects applying high technology, green technology, and advanced technology to create high added value in production and trade.