The Hanoitimes - A draft decree o­n information technology parks (IT) will create opportunities for the development of both enterprises and the industry, according to analysts.

The eight-chapter and 38-clause draft, compiled by the Ministry of Information and Communications (MIC), is expected to be submitted to the Government for approval in October.

Under the draft, the IT parks will provide six main functions, including manufacturing and trading of IT products and service provision; research and development; human resource training; technology and IT firm development; organising fairs and exhibitions; and attracting local and international investors to accelerate the development of the parks.

The zones would be tasked with replacing foreign imported products and services, making a major contribution to the development of the telecommunications sector and the wider economy, according to the MIC.

The draft also makes the distinction between first class IT parks employing at least 2,000 workers and smaller second class parks with a workforce of at least 1,000 workers.

To encourage investors to build IT parks, the Government will create the most favourable conditions with land clearance, access to preferential loans from the Bank for Investment and Development of Viet Nam (BIDV), and the right to issue corporate bonds.

The draft also stipulates incentives for IT firms operating in the parks. They will be exempted from land rent, enjoy a corporate income tax rate of 10 per cent for a 15 year period following the start of earnings and import tax exemptions o­n IT specialised equipment which can not be produced at the local market.

The draft also offers preferential policies to newly-established, large-scale businesses producing key products and services, operating in the zones.

They will also enjoy a corporate income tax of 10 per cent for 30 years and zero per cent value added tax (VAT) o­n exported goods and services; VAT exemptions for imported equipment, machinery and components; VAT waived for imported raw materials used to manufacture software products and hardware products which cannot be made in this country.

Chu Tien Dung, general director of the Quang Trung Software City Co said the IT zones would help form powerful centres, more easily mobilise resources and better bolster co-operation between enterprises in a bid to accelerate the sector's development.

Deputy Minister of Information and Communications Nguyen Minh Hong said it was necessary to continue collecting opinions from local authorities, enterprises and relevant bodies. The cities of Hanoi, Da Nang and HCM City that had already achieved certain success were encouraged to share their experience with other localities.

Information and communications departments had been asked to develop appropriate solutions for the development of IT zones and make submissions to the ministry as part of the draft's finalisation, Hong added.

Viet Nam currently has o­nly seven IT parks and they lack efficiency. Analysts said that the decree was vital in supporting the development of the sector.