Economists question Samsung’s proposal to become Vietnamese company

Economists question Samsung’s proposal to become Vietnamese company

Samsung enjoys many incentives in land access and taxes as a foreign direct investor, but it still wants to become a Vietnamese company, surprising many economists.

Bui Trinh, a renowned economist, said he was astonished when he heard about the proposal made by Samsung.

“Samsung says it wants to be considered as a Vietnamese enterprise because during the investment process, Samsung has been employing many Vietnamese workers, while our products are made by their hands and brains. However, the beautiful saying is just for diplomatic relations,” he said.

Trinh said in fact Vietnamese only undertake simple works in Samsung’s global production chain.

Pham Chi Lan, also a renowned economist, said enterprises would be reluctant to be treated as Vietnamese enterprises, because foreign-invested enterprises are more protected than Vietnamese.

“Vietnamese have bigger obligations towards local authorities. They are sometimes asked to give ‘financial support’ to state agencies, while foreign invested enterprises don’t have to. Meanwhile, they dare not make complaints when they have problems”.

Dr. Vu Si Cuong from Finance Academy said it was difficult to discover Samsung’s real intention when it was proposed to be treated as a Vietnamese enterprise.

Since the very first day when it set foot in Vietnam, Samsung has been enjoying a lot of preferences, from the land access right to import tax incentives.

Besides, the investment procedures applied to foreign invested enterprises are different from ones applied to Vietnamese enterprises, from bank loan access to other duties.

Therefore, Cuong said, it is impossible to consider a foreign invested enterprise as a wholly Vietnamese owned enterprise.

He went on to say that it would be unfair to treat Samsung as a Vietnamese enterprise now.

Foreign invested enterprises can enjoy many more preferences, and if they are treated as Vietnamese, they will enjoy the incentives designed for Vietnamese enterprises as well.

Cuong thinks that Samsung’s proposal aims to access preferences so as to boost domestic sale and stimulate domestic demand.

The “buy Vietnamese’ program has been launched, which calls on Vietnamese consumers to buy Vietnamese products.

Cuong thinks no Vietnamese enterprise can compete with Samsung. However, he called on the Ministry of Planning and Investment to think carefully to give advice to the government in this case.

“It is necessary for state management agencies to check the commitments Vietnam has made with investors before making a final decision on the issue,” Cuong said.

vietnamnet