Very small foreign-invested projects may be fenced off as the government
seeks to improve the quality of foreign investment.
According to the Ministry of
Planning and Investment (MPI), a large number of foreign direct investment
(FDI) projects capitalised at less than $100,000 have been licenced in Vietnam
in recent years. In the first three quarters of this year alone, 145 projects of
such sizes were registered, making up 18.7 per cent of the total FDI projects
registered in the period.
At a workshop held last week in
Hanoi, MPI Deputy Minister Dao Quang Thu said several local authorities had
expressed their concerns over the efficiency of very small FDI projects and
proposed new regulations on minimum registered capital.
Danang city has recently proposed
that the MPI increase the scale of registered capital for FDI projects with the
aim of raising the quality of investment capital.
Danang People’s Committee Vice
Chairman Phung Tan Viet described how some foreign investors found ways to stay
in Vietnam by setting up very small projects while seeking other employment.
They dissolved their businesses
after landing a new job, he said.
“FDI projects with capital of
under $100,000 account for 50 per cent of Danang’s total number of FDI
projects. There are even projects capitalised at only $5,000-7,000, which are
inefficient,” said Kieu Van Tam, head of Danang Department of Planning and
Investment’s Foreign Relations Division.
According to Tam, FDI projects
capitalised at more than $100,000 would be efficient. Nguyen Van Tu, former
vice director of Hanoi Department of Planning and Investment, said projects
with unusually small capital and vague business purposes raised doubts about
the investors’ true intentions.
But Tu suggested that a unique
threshold should not be applied to all sectors. Instead, he said different
minimum capital requirements should be put in place.
The MPI is working on regulations
on minimum capital requirements on FDI projects to improve foreign investment
quality.
Kieu Linh | vir.com.vn
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