(VEN) – Ample opportunities exist in order to attract overseas Vietnamese investment capital. However, investment promotion mechanisms are insufficient, Deputy Foreign Minister Bui Thanh Son said at a recent press conference.
Many opportunities to attract overseas Vietnamese capital
About 4.5 million Vietnamese are living and working in almost 100 foreign countries and territories, and overseas remittances to Vietnam increased by an average of 10-15 percent during the last five years.
Bui Thanh Son said that almost US$10.5 billion worth of overseas remittances came to Vietnam via official channels in 2012, plus several billion US dollars in overseas remittances entered the country via unofficial channels. Vietnam received an average of almost US$20 billion from overseas Vietnamese each year, accounting for about 10 percent of Vietnam’s Gross Domestic Product (GDP).
Overseas Vietnamese worldwide however don’t just have money, they also have access to wider networks and greater knowledge of foreign markets. So far, overseas Vietnamese have invested in 3,600 projects with total registered capital of more than US$8 billion.
Overseas Vietnamese investment projects in Vietnam are largely focused on tourism, health and education.
Despite significant improvements, Bui Thanh Son said that the Vietnamese investment environment was not attractive to overseas Vietnamese due to many barriers, which had hampered overseas Vietnamese investment flows to Vietnam.
Barriers lie in mechanisms and procedures
Overseas Vietnamese Business Association General Secretary and former Vietnamese Ambassador to Russia Bui Dinh Dinh said Politburo Resolution 36 on Work with Overseas Vietnamese had provided an open mechanism for overseas Vietnamese to invest in the country. Specifically, the resolution provides overseas Vietnamese investors with the same preferences as domestic investors. However, many local authorities have not closely followed the resolution.
Several local authorities have even caused difficulties for overseas Vietnamese investment projects. For example, although the investors in the Dalat Edensee Lake Resort & Spa in Lam Dong’s city of Da Lat has sufficient investment capital and did not have to take a loan, they faced many difficulties caused by the local authorities. Only after the project was successfully completed did the local authorities change their thinking.
Moreover, overseas Vietnamese investment support policies are non-transparent and inconsistent due to differences between provinces and cities, which have also discouraged investors.
Bui Dinh Dinh proposed that the government continue simplifying its administrative procedures to reduce red tape and make it possible for projects to start quickly. By doing so, the government will attract more overseas Vietnamese investment in the long term.
Bui Thanh Son said that mechanisms, unattractive preferences and complicated and time-consuming procedures were major barriers, which had hindered overseas Vietnamese investment flows to the country. With that in mind, it is necessary to increase preferences for overseas Vietnamese investors, such as exempting land taxes and the corporate income tax during the first 3-5 or even 10 years of the project. Local authorities should change their point of view on overseas Vietnamese investment projects and continue improving their procedures and the investment environment to let overseas Vietnamese find Vietnam as a safe investment destination and feel like they take their money home./.
By Nguyen Hoa