Vietnam minister warns of FDI projects posing trade fraud risks

Monday, July 22, 2019  14:45

Vietnam would shift its foreign direct investment (FDI) attraction strategy towards a greater focus on quality and rejecting those that pose high risks of trade fraud, according to Minister of Planning and Investment Nguyen Chi Dung. 

Local provinces have to be more selective and refrain from issuing investment licenses for FDI projects using outdated technologies, high energy consumption and posing risks of trade fraud, Dung said at a meeting held by the Ministry of Planning and Investment (MPI) on July 18. 
Dung said certain provinces could still attract labor-intensive FDI projects, but have to ensure other requirements such as technologies, environmental norms and energy-efficiency. 
Dung urged local authorities to remain cautious over offering incentives and commitments to foreign investors. 
Meanwhile, it is vital to enhance the supervision since the early phase of project implementation, Dung stated, adding government agencies must prevent transfer pricing during the process of enterprise establishment. 
Vietnam is scheduled to tighten its standards and technical specifications regarding products, environment, resources and cost efficiency during the process of reviewing FDI projects, Dung continued. 

Incentives given to investors would include specific commitments and conditions, Dung asserted. 
For large-scale projects, Vietnam could offer superior and highly competitive incentives, while encouraging a greater linkage between domestic and foreign companies, he said. 
FDI commitments in the January – June period totaled US$18.47 billion, down 9.2% year-on-year, stated a report of the Foreign Investment Agency (FIA) under the MPI. 
Meanwhile, disbursement of FDI projects totaled US$9.1 billion in the six-month period, representing an increase of nearly 8% year-on-year,

Investors have invested in 19 fields and sectors, in which manufacturing and processing continued to attract substantial attention with investment capital of US$13.15 billion, accounting for 71.2% of total FDI approvals.
Real estate was the second most heavily invested, with US$1.32 billion, or 7.2% of total registered capital, followed by retail and wholesale with US$1.05 billion or 5.7%.  
The data shows that out of 95 countries and territories investing in Vietnam in the six-month period, Hong Kong (China) took the lead with US$5.3 billion, accounting for 28.7% of total investment, and China at the third place with US$2.29 billion, or 12.4% of the total. 

Ngoc Mai