Japanese investors aggrieved by under-the-table money in Vietnam
Japanese investors aggrieved by under-the-table money in Vietnam
The environment for investment in Vietnam is still problematic, despite attempts made by its government, with ‘under-the-table’ transactions commonplace, a Japanese executive director said on Tuesday.
Although the Vietnamese government has enacted measures to settle the issue, the local investment environment is worsening over time, Yasuzumi Hirotaka, executive director of the Japan External Trade Organization (JETRO), said in a meeting held by JETRO on the performance of Japanese entrepreneurs in Vietnam.
The underhand activities are attributed to unclear and sporadic law-enforcement, and go hand in hand with complicated hierarchical administrative procedures, as well as sluggish tariff processes, Yasuzumi complained.
Over 60 percent of Japanese entrepreneurs said they had faced several difficulties in their operations due to the unclear and complicated legislative system in Vietnam.
This is a result of the lack of instructions and specific guidelines to put new laws into practice, the executive director explained.
Most Japanese entrepreneurs in Vietnam said that when they made mistakes in procedures related to customs, tariffs, or when they wanted to speed up the paperwork process, they were blatantly encouraged to pay under the table in order to solve issues quickly rather than following standard protocols, according to the executive director.
Many, however, hesitate to bring the issue to light since they are afraid of being harassed later, Yasuzumi said.
“This is our headache,” he whined.
In other countries surrounding Vietnam, Japanese investors have experienced similar problems, but the frequency is somewhat lower, according to the JETRO representative.
That said, entrepreneurs from Japan tend to prefer Vietnam since there are few to no new disruptions, he added.
Thirty percent of Japanese enterprises chose Vietnam to be their first target to invest in, while 60 percent intend to expand their operation here, he said.
These numbers are far higher than those of other countries, Yasuzumi continued.
Many have hoped that trade agreements signed by Vietnam, notably the Trans-Pacific Partnership accord, will mean significant benefits in terms of trade, tariffs, and labor contracts, he said.
Earlier this year, nine major real estate agents from Japan visited two projects in Ho Chi Minh City, in search of investment opportunities in the southern Vietnamese metropolis.
Established in 1958, JETRO is a government-owned organization that works to promote mutual trade and investment between Japan and the rest of the world.
The organization’s core focus in the 21st century has shifted toward promoting direct foreign investment into Japan and helping small- to medium-d Japanese firms maximize their global export potential, its website said.
