Understanding High-Tech Infrastructure in Vietnam
High-tech zones play a crucial role in advancing science, technology, and economic development in Vietnam. According to Article 31 of the 2008 Law on High Technology, high-tech zones are defined as designated areas for the research, development, and application of high technology. These zones also serve as incubators for high-tech enterprises, providing training for high-tech human resources and supporting the production and commercialization of high-tech products.
The technical infrastructure of high-tech zones includes various components that ensure the smooth operation of these zones. As per Article 2, Clause 3 of Decree 10/2024/ND-CP, high-tech infrastructure systems encompass:
- Engineering infrastructure works within the high-tech zone;
- Environmental protection facilities, fire prevention systems, traffic safety measures, and public security infrastructure;
- Information technology infrastructure.
Furthermore, high-tech infrastructure must be planned, designed, and constructed in a modern, synchronized, and environmentally friendly manner, following smart urban standards.
Legal Requirements for Investors in High-Tech Infrastructure Projects
Given the strategic importance of high-tech zones, investors undertaking infrastructure development projects in these areas must meet stringent legal conditions. Under Article 24 of Decree 10/2024/ND-CP, investors must satisfy general and specific conditions based on the nature of the project.
1. General Conditions
Investors in high-tech infrastructure projects must:
- Comply with real estate business regulations as stipulated in the Law on Real Estate Business;
- Obtain land allocation, land lease, or land use conversion approvals from the government, in accordance with the Land Law and other relevant regulations.
If the investor is a foreign economic organization, they must meet additional land use eligibility requirements under Vietnamese law.
2. Specific Conditions
Depending on whether the project receives state funding for infrastructure construction, investors must comply with different requirements.
2.1 Projects Without State Budget Support
For projects where the state does not invest in infrastructure development, investors must meet the following criteria:
- Investment Commitment and Project Type Registration: Investors must commit to attracting high-tech projects that align with the principles and criteria outlined in Articles 28 and 35 of Decree 10/2024/ND-CP. Additionally, the industries and project types must align with the approved master plan for the high-tech zone’s establishment and expansion, as sanctioned by the Prime Minister.
- Implementation of Monitoring Mechanisms: Investors are required to establish a rigorous monitoring and evaluation mechanism for compliance with investment principles and criteria. They must submit annual or ad hoc reports to the high-tech zone management board detailing project implementation progress and compliance with regulatory requirements.
2.2 Projects Using the Investor Selection Bidding Process
If the project follows a competitive bidding process to select an investor, the selection criteria include:
- Investor Capability Assessment: Investors must demonstrate financial capability and adherence to the general conditions outlined above.
- Experience Evaluation: The investor’s experience is assessed based on the project’s scale, implementation progress, and past performance. The ownership structure, founding members, and stakeholders of the investing organization are also taken into consideration.
- Technical Criteria: Investors must adhere to the high-tech zone’s approved construction planning, the investment policy decision issued by the relevant authority, and other applicable regulations.
- Financial and Commercial Criteria: The financial plan must comply with the investment policy decision issued by the competent authority, ensuring that the project is economically viable and aligns with national development goals.
Challenges and Considerations for Investors
Investing in high-tech infrastructure comes with significant challenges, including regulatory compliance, financial risks, and operational complexities. Some of the key considerations for potential investors include:
- Land Use Rights and Legal Procedures: Investors must navigate complex land allocation and lease procedures, especially for foreign entities.
- Infrastructure Development Costs: High-tech infrastructure projects require substantial financial investment, often necessitating partnerships or government incentives.
- Regulatory Changes: Frequent updates to laws and regulations require investors to stay informed and ensure ongoing compliance with legal requirements.
- Environmental and Social Commitments: High-tech zones must be developed in an environmentally sustainable manner, and investors must adhere to strict environmental protection and corporate social responsibility standards.
Developing high-tech infrastructure in Vietnam presents lucrative opportunities for investors but also requires careful legal and financial planning. By adhering to the conditions set forth in Decree 10/2024/ND-CP and other applicable laws, investors can contribute to the growth of Vietnam’s high-tech sector while ensuring regulatory compliance. Those considering such investments should conduct thorough due diligence, seek expert legal counsel, and engage with relevant government agencies to navigate the complex investment landscape effectively.
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