In attracting FDI, Vietnam would refuse tiny projects
20-10-2012 11:38:45+07:00
In attracting FDI, Vietnam would refuse tiny projects
In an effort to tighten its control over the foreign direct investment (FDI), Vietnam is considering revoking the investment licenses from the unimplemented projects. It would also say “no” to the projects with too small registered investment capital.
The local authorities, when checking the FDI projects, have found a lot of problems with “tiny” projects.
Phung Tan Viet, Deputy Chair of the Da Nang City People’s Committee, has noted that a lot of the investment projects registered in recent years have small operation scale, while there are few projects in high technologies, source technologies or supporting industries.In many cases, according to Viet, foreigners registered FDI projects in Vietnam with small capital just to be able to stay in Vietnam while seeking jobs. After they found jobs in Vietnam, they dissolved the registered projects.
According to Kieu Van Tam, a senior official of the Da Nang City’s Planning and Investment, the number of small-scaled FDI projects capitalized at less than 100,000 dollars accounts for 50 percent of the FDI projects in the city.
“I know many projects registered with the small capital of 5000-7000 dollars only, mostly in the field of consultancy services, information technology services, and they have been operating badly,” Tam said.
Nguyen Van Tu, former Deputy Director of the Hanoi Planning and Investment Department, also said he once discovered a lot of small-scaled FDI projects.
“There were some abnormally small projects. I think the investors registered projects for some other purposes,” Tu said.
Dau tu has quoted an expert as saying that a project needs to have the investment capital of 100,000 dollars at least to be effective, though he said that in many cases, small projects can also bring high profits.
Lu Thanh Phong, Deputy Director of the HCM City Planning and Investment Department, though agreeing that the efficiency of a project is not decided by the investment capital, said Vietnam should not license small projects, because attracting more capital is not the only goal Vietnam strives to.
Phong said that in the period after 2008, when Vietnam licensed the projects capitalized at several billions of dollars, the newly registered projects tend to decrease in the scale.
A report by MPI has shown that in the first nine months of the year, 145 FDI small projects capitalized at less than 100,000 dollars were registered, which accounted for 18.7 percent of the total projects.
Vietnam does not intend to “heap criticisms” upon small projects. However, the country, when prioritizing to attract big scaled projects in high technologies, cannot be satisfied with the projects with the modest investment capital of just tens of thousands of dollars.
That explains why MPI has proposed to set up the minimum investment capital required for FDI projects.
Tam, when asked about the minimum required investment capital for FDI projects, said the level could be 100,000 dollars.
Meanwhile, both Phong and Tu agreed that it would be better not to set up the same ceiling for all business fields, while different ceiling should be applied to different business sectors.
Do Nhat Hoang, Director of the Foreign Investment Agency, said on Saigon Dau tu newspaper some days ago that Vietnam would focus on attracting investment to some business fields – industries and construction, services and agriculture – forestry – fisheries, and the production activities to join the global production chains.
Hoang has also informed that Vietnam may slash the corporate income tax from the current 25 percent to 20 percent at once. Previously, it once considered lowering the tax rate from 25 percent to 22 percent first in 2013, before lowering to 20 percent.
vietnamnet
