Debts unsettled, employees unpaid as investors disappear
Debts unsettled, employees unpaid as investors disappear
A recent report has revealed that nearly 520 owners of foreign-invested businesses in Vietnam have secretly left the country in the first five months of this year, leaving behind massive amounts of unpaid taxes, debts, and wages.
FDI investors abandoning their Vietnam facilities and defaulting on such payments is not a new phenomenon, but the Ministry of Planning and Investment still does not have an adequate solution to the problem.
The investment department of Binh Duong province said the investors of 20 out of 936 FDI businesses under its management have secretly returned to their home countries without paying bank loans, corporate taxes, and employee insurance and salary.
Similarly, 54 FDI projects with a total registered capital of US$173 million in Dong Nai have ceased operation. The owners of 29 of these projects are nowhere to be seen.
“The employees of these businesses are in a hard place as they have no income while they look for a new job,” said an official of the management board of Dong Nai Industrial Park.
In late July, hundreds of customers of the Tricon Tower apartment project, located in Hanoi, swarmed the headquarters of Minh Viet Co, the project’s investor, to ask for the money they spent buying a house to be refunded.
But they were only received by the company’s low-level employees, who have no role or responsibility to solve their complaints.
The boss, Edward Chi, a Chinese-American, has vanished from Vietnam with more than VND400 billion worth of home deposits from the furious customers.
Hard to solve
Le Viet Dung, deputy director of the investment department of Binh Duong, said resolving this issue creates a huge headache for local authorities.
As an example Dung used an FDI textile business with 500 workers whose boss has left the country without paying their salary for three months.
“The investor left behind wage debt worth nearly VND1 billion, while we cannot liquidate the company’s assets, as even their manufacturing plants are leased from local facilities,” he said.
Dung said one solution is to contact the foreign affairs agencies of the countries whose investors have left, but this has proven ineffective.
“Hence, the local authorities have to earmark parts of their budgets to assist the unemployed,” he said.
The investment ministry has even admitted recently that an effective solution to the issue remains unfound.
There are myriad reasons for this, and the legal framework is also to blame.
“There is no regulation that allows authorities to revoke the investment license of the FDI projects whose owners are no longer in Vietnam,” the ministry said.
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