Proposing a specific mechanism for sea reclamation and logistics urban projects

The Vietnam Department of Seas and Islands (Ministry of Agriculture and Environment) proposes to supplement outstanding preferential and specific support mechanisms in the Law on Marine and Island Resources and Environment (amended), to promote sustainable marine economic development.

At the above policy development workshop on July 9, Mr. Nguyen Thanh Tung, Deputy Director of the Vietnam Department of Seas and Islands, said that the proposed support mechanism includes tax incentives, along with policies on infrastructure, procedures, green finance and risk sharing. Projects eligible for incentives must apply green, advanced technology, protect the marine environment, or be pervasive.

Accordingly, three groups of activities are proposed to enjoy special mechanisms including green projects (offshore wind power, high-tech marine farming, logistics); new model group (sea reclamation urban area, business and service area on the sea); marine economic development support group…

In fact, current policies include incentives for businesses, but are mainly designed for onshore projects. Meanwhile, investing at sea has high risks, high costs, long capital recovery period, and is especially directly affected by natural disasters and climate change.

Therefore, marine projects are proposed to enjoy incentives equivalent to special incentive industries, or projects implemented in extremely difficult socio-economic areas. The draft stipulates a number of preferential financial policies such as corporate income tax exemption and reduction, sea use fees, access to green finance…

Administrative procedures for marine projects have also been shortened, such as allocating marine areas without auction, approving investment policies and approving investors. The proposed sea delivery term is 70 years, 20 years more than the preferential project on land.

As the unit implementing the sea reclamation urban project in Da Nang, Sungroup representative said that sea reclamation activities are expanding land area, so they are entitled to incentives. They asked for priority access to raw materials, including construction sand.

Susceptibility to natural disasters is the biggest risk for businesses operating at sea. After seven years of supporting shipping activities, Mr. Bui Khac Binh, Chairman of the Board of Members of Nghi Son Technical Services Co., Ltd., calculated that they actually only operated 7-7.5 months per year. For example, in 2025, their operations will face difficulties when Vietnam welcomes up to 15 storms, 6 tropical depressions and 8 monsoons.

“7 years of operation, we lost 18 billion VND,” Mr. Binh stated. Meanwhile, the cost of using the sea area is higher than that of the mainland. He proposed applying the policy of financial support and sea assignment equivalent to land allocation.

In fact, Mr. Dau Anh Tuan, Deputy Secretary General of the Vietnam Confederation of Commerce and Industry (VCCI), said that many domestic and foreign investors are interested in high-tech marine farming and sea reclamation infrastructure, but are concerned about legal overlap and stability. The business community expects incentives to be truly outstanding and predictable.

“An attractive incentive policy that depends on the ask-give mechanism, “running” through many doors, will reduce the investment motivation of businesses,” Mr. Tuan stated. In addition, incentives must be accompanied by reduced procedures and effective inter-sectoral coordination mechanisms, while establishing maritime property rights.

Businesses also request to be granted a “green book”, which means the right to use the sea, similar to a “red book” for real estate. This green book will establish property rights and be allowed to transfer and mortgage for loans.

Vietnam has 21 out of 34 provinces and cities with sea. The design of specific preferential policies will contribute to promoting the local economy, moving towards the double-digit growth target. Mr. Nguyen Quoc Toan, Director of the Vietnam Department of Seas and Islands, said this draft law will be submitted to the National Assembly in October.