Galileo Investment Group invests in and develops major businesses worldwide. Our current ventures include The Creative City, a large-scale real estate development project in the Phu Yen Economic Zone along Vietnam's south-central coast. Galileo intends to serve as the master planner, community builder, and real estate development manager for The Creative City.
| July, 2009 |  | October, 2009 | | November, 2009 |
Galileo Investment Group invests in and develops major businesses worldwide. Our current ventures include The Creative City, a large-scale real estate development project in the Phu Yen Economic Zone along Vietnam's south-central coast. Galileo intends to serve as the master planner, community builder, and real estate development manager for The Creative City.
Vietnam is a country in transition that is emerging as a powerful economic player in the Asia-Pacific region. It has the second fastest growing economy in Asia showing steady and satisfactory growth results year after year, yet the country faces many challenges to keep up with its rapid economic expansion. As Vietnam transitions from agriculture and manufacturing to knowledge-based industries, its population is naturally undergoing a major shift from rural to urban areas. As a result, Vietnam ’s cities are quickly becoming overpopulated and lack sufficient infrastructure to accommodate the huge urban growth. They also lack the educational resources needed to re-train the work force to become productive contributors to the many new knowledge-based companies already starting to invest in Vietnam .
Vietnam seeks a modern high-tech city with the requisite components – such as eco-friendly residential, commercial, educational, and entertainment zones – needed to fulfill the country’s economic potential. Galileo is designing The Creative City to meet this need. The Creative City requires careful master planning, it must include economic drivers to enable and sustain the country’s growth, and it must realistically be in sync with Vietnam ’s current profile. Vietnam recognizes that it must quickly build a world-class modern city to help position itself to compete effectively and become a world leader in the new global knowledge-based economy.
The opportunity for Galileo and its development partners is nothing short of building a Singapore or Hong Kong for Vietnam with the privilege of hindsight. The Creative City will become both Vietnam ’s most modern and most important major city – destined to become an engine for Vietnam ’s new economy, a global leader in certain high-tech industries, and a major hub for international commerce.
Phu Yen - The crossroads of Southeast Asia
Phu Yen is geographically situated at the crossroads of South East Asia, and serves as a bridge connecting northern and southern Vietnam . Because of its strategic location, idyllic landscape, and ready access to the region’s air, land, and sea transportation assets, the national and provincial governments of Vietnam have recognized the unique opportunity to develop Phu Yen into an international trade hub to serve as a gateway for commerce and culture in South East Asia .
Numerous examples from development economics indicate that with rapid sustained economic growth, capital intensive agricultural production often causes a long-term population shift away from rural areas and towards urban centers. Consequently, this creates a significant development challenge as burgeoning cities' resources are stretched thin and uncontrolled sprawl ensues. As this demographic shift occurs for the 75% of Vietnam 's population that currently resides in rural areas, government authorities in Vietnam envision Phu Yen as one solution to this challenge. By supporting the thoughtfully planned, large-scale development of Phu Yen through policy actions and carefully selected partnerships with private developers, the government hopes to leverage Phu Yen's strategic opportunity to become an international center for trade into an engine for job creation which can attract and accommodate the urbanizing population of Vietnam . To this effect, an Economic Zone in Phu Yen to offer a litany of development incentives. The Phu Yen property for which Galileo Investment Group anticipates receiving its land-use rights investment license consists of approximately 5,600 hectares (an area approximately the size of Manhattan ).
Highlights of The Creative City Property
Prime Waterfront Property Centrally Located Within 3 Hours of All Southeast Asia
Phu Yen is located along Vietnam ’s south-central coast, and is the eastern-most point in Vietnam . Singapore , Hong Kong, Manila , Bangkok and South China are several of the major destinations which are easily accessible from this location and which can all be reached within three hours or less flight time.
Extensive Transportation Assets
Phu Yen has ready access to National Highway 1A, the coastal railway system, and a regional airport currently planned to be converted into an international airport. Along the southern-most portion of the property is a port envisioned by Galileo and the Vietnamese government to be transformed into a cruise ship port to support The Creative City’s tourism industry. The East-West Economic Corridor (“EWEC”) - a major recent infrastructure project north of the region - stretches 900 miles across Vietnam, Laos, Cambodia, Thailand and Myanmar, is one of the key economic corridors in the region which aims at deepening integration as well as trade and investment linkages. The EWEC is expected to become both a dynamic development hub, as well as an important link to the markets of Northeastern and Southern Asia . Future development plans will expand the EWEC westward into India.
Special Economic Zone with Tax Advantages
The Phu Yen Economic Zone has been designated as a tax advantaged development zone to encourage investment in the area. This is one of the few Economic Zones established in Vietnam to aggressively create “tax havens” which offer huge incentives to attract and retain international businesses and commerce.
Preferential Business Income Tax
Vietnam applies one Business Income Tax (BIT) for both domestic and foreign invested enterprises with a standard BIT rate of 28%. Preferential BIT rates of 10%, 15% and 20% for a period of 15 years, 12 years and 10 years respectively, starting from the commencement of operating activities, are granted for qualified investment projects and investment zones. Projects in defined Economic Zones – such as Phu Yen – qualify for greater BIT preference such as 10% for the first 15 years from the commencement date of operation, a 4-year tax exemption from the first profit making year, and a 50% tax reduction (i.e., maximum 14% rate) for the 9 following years.
Free Trade Zone
Goods and services which are imported or produced in the tax-suspension area and consumed there as well are free from import taxes and value added tax.
Import Duty Exemptions
Import duties normally levied on equipment, building materials and fishing products produced abroad are exempted for the first 5 years after a business begins operations in a project zone. For goods produced, processed, re-processed or assembled in tax-suspension areas with the use of foreign raw materials or intermediate goods, and for sale outside of the economic zone, import tax must be paid only based on the value of the raw materials and intermediate goods entering the country.
Reduced Personal Income Tax
Vietnam has a flat Personal Income Tax (PIT) rate of 25% for Vietnam-sourced income earned by non-residents. Both Vietnamese and foreign employees in all Economic Zones (EZ) qualify for a 50% reduction in PIT. An even more favorable reduced, flat income tax rate of 10% applies to all workers within a project zone for the first 15 years after its initiation for both domestic and foreign projects.
Major Planned Developments
Development of The Creative City will follow a coherent and integrated strategy, to include a number of anchor projects. Initial anchor tenants establishing facilities in The Creative City will receive highly favorable terms in addition to the tax incentives offered by the government of Vietnam . Galileo has created the Phu Yen master plan and is now refining the details for The Creative City in collaboration with its partners. Phu Yen is fortunate to already have in place a modern infrastructure so additional infrastructure development will be moderate. Galileo will lease the property or sell long-term development rights to interested development partners. In so doing, Galileo will strive to realize the progressive vision of a 21st century high-tech city characterized by creative endeavors and designed with quality of life in mind.
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