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Overseas Vietnamese eye local property
Most overseas Vietnamese would like to invest in the country’s real estate sector, according to a survey conducted by the Overseas Vietnamese Business Association.
The survey, conducted during the launch of the association in late 2009, revealed that 95 percent of overseas Vietnamese (Viet kieu) wish to invest in real estate, while the remaining 5 percent would like to channel their money into the trade and tourism sectors.
The association said the overseas Vietnamese community has injected $2 billion in 3,000 investment projects in their homeland.
The association’s Secretary General, Pham Thieu Hoa, was quoted by Tien Phong newspaper as saying that the real estate, tourism and technology transfer would remain the key sectors for overseas Vietnamese investment over the next few years.
The Viet kieu Village Project, which was proposed by Overseas Vietnamese in the UK and licensed by the city authorities of Hai Phong in January 10 of this year, is one of the investment projects in the real estate sector funded by overseas Vietnamese investors in the northern port city.
Hoang Van Ke, Deputy Chairman of Hai Phong People’s Committee, said the city has 20 Viet kieu investment projects, including a garment factory owned by Pham Minh Nam from the UK, and a villa complex capitalised at US$20 million by a Viet kieu in Germany.
Overseas capital
Vietnamese projects in Hai Phong have been carried out through their investors’ relatives in the country. According to the Hai Phong branch of the State Bank of Viet Nam, the city has received some $500 million worth of overseas remittances in the last five years. The city has attained an average overseas remittance of $150 million per annum since 2008.
A portion of overseas Vietnamese remittances has been injected into investment projects, though there has been no survey that clarifies the exact percentage.
Le Truong Son, member of the executive board of the Overseas Vietnamese Businesses Association in Russia, said a lot of Vietnamese businesses in Russia have returned to Viet Nam to invest.
He added that Viet kieu investment would increase if they can receive updated information about investment incentives and projects calling for investment.
According to Pham Van Thanh, Chairman of the Vietnamese Entrepreneurs Society in Canada, many of the remittances sent by Viet kieu from the US, Canada and Australia to relatives in Viet Nam are not channelled into investment opportunities.
He said there were not many "millionaire Viet Kieu", but there are numerous overseas Vietnamese with assets of $500,000-$1 million. Many of them want to purchase houses to live in Viet Nam or to set up small businesses, but they are reluctant to make an investment.
Overdue taxes
A tax inspection of motorbike shops since June 2009 has brought in no more than VND2.6 billion (US$140,000) in overdue taxes.
Many people have questioned why the figure was much lower than VND8 billion ($430,000), the amount of tax that was evaded by shops when they sold 1,000 Honda SH 150 motorbikes imported from Italy.
The Taxation Bureau said the six-month inspection reviewed tax payments of 396 motorbikes shops across the country. They collected a mere VND2.62 billion in tax arrears, plus VND311 million in fines.
According to the online newspaper VietnamNet, last year some 300,000 motorbikes were imported to Viet Nam and the amount of money end-users paid to shop owners for each of these imported motorbikes was much higher than the selling price appearing on the VAT invoices.
At present, shops in Ha Noi are selling the imported Honda SH 150 motorbikes for VND130 million ($7,000) each, but the selling price was only VND70 million on the VAT invoice the seller provided to the buyer.
At VND60 million (Which doesn’t appear on the VAT invoice) lower than the actual price buyers have to pay for a Honda SH 150 motorbike, and the seller can avoid a payment of VND8 million in VAT and corporate income tax.
Thus, the tax evasion for selling 1,000 of these motorbikes amounts to VND8 billion, far exceeding the VND2.6 billion collected during the six-month inspection, which was promoted as the Taxation Bureau’s campaign to try to bring motorbike prices under control.
Many domestically-made motorbikes have also been sold in the same way, according to VietnamNet.
In a document issued in May 2009, the Taxation Bureau, in preparing for the inspection, asked tax collectors to gather tax arrears and issue administrative fines to shops that sell motorbikes below the listed prices, shops that take larger amounts of money appearing on the VAT invoice, and to those who avoid tax declarations.
Tax collectors were also asked to take legal action against those motorbike shop owners who evade large tax payments.
Private jobs
Private businesses have created the largest number of jobs and created the most employment opportunities for Vietnamese labourers, according to a survey conducted by a work team on the 10-year implementation of Corporate Law.
According to the survey, issued in Ha Noi last week, between 1999 and 2008 private businesses created 4.3 million jobs, four times as high as the number of jobs created by State-owned enterprises in the same period. Between 2005 and 2008, the private sector created 3.5 million new jobs compared with 1.4 million jobs offered by foreign-invested enterprises. In the same period, the State-owned enterprises slashed 500,000 jobs.
Labourers’ yearly income has also been on the rise, from VND8.2 million each, 1.4 times as high as the country’s per capita income in 2000, to VND32 million each in 2008, twice as high as the country’s per capita income.
Total capital of private businesses rose by 17 times, from VND38.7 trillion in 2000 to VND657 trillion ($35.5 billion) in 2008. Average capital of a private enterprise increased from VND1.2 billion in 2000 to VND5.2 billion in 2008.
Private businesses’ revenues rose by 15 times compared with 3.6 times by the State-owned enterprises and 5.8 times by the foreign-invested enterprises in the period. A private company earned an average profit of VND54 million in 2000 and the figure rose to VND258 million in 2008.
A private enterprise now has total assets worth VND11 billion on average and can attain average revenues of VND17 billion per year. With capital of VND100 in 2000, a private enterprise can create VND271 in assets and gain a profit of VND4.4. With the same amount of capital in 2008, the figures rose to VND398 in assets and VND7 in profit, according to the survey.
Le Hung Vong
vietnamnews
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