VietNamNet Bridge – More and more foreign direct investment (FDI) projects have been found as making no move since the day of licensing, because their investors cannot arrange capital for the project implementation in the economic crisis.

Bo Ngoc Thu, Director of the Dong Nai provincial Planning and Investment Department, said the province has revoked the investment licenses from 32 FDI projects which had the total registered capital of $172.09 million.

The investors of the projects either did not kick off the projects within 12 months since the day of licensing, or started projects but could not complete projects due to the financial problems.

In November 2012 alone, the Management Board of the Industrial Zones released the decisions on revoking 17 licenses. The licenses were granted to 17 projects, whose investors have left for their home countries. Local authorities now cannot contact the investors to ask them pay tax debts and fulfill necessary procedures for dissolution.

Most of the projects having licensed revoked have small or medium business scale in the fields of industrial product processing.

In February 2012, four years after the licensing, Good Choice USA-Vietnam, which still could not implement the registered project, saw its license on developing the Wonderful World culture park project revoked. Meanwhile, the project licensing four years ago once caught the special attention from the public because it was a huge project with the estimated investment capital of $1.3 billion.

Also in 2012, five foreign invested enterprises, namely King May Craff, Brandon Miles, Fine Cubicle, Cuu Duong and Mir Vina, had to stop operation due to the financial problems.

Nguyen Tan Dinh, Deputy Head of the Management Board of Export Processing Zone and Industrial Zone, said that 10 foreign invested enterprises in the city have stopped operation and dissolved before the expected duration.

Some enterprises have decided to quit Vietnam quietly because they don’t have money to pay tax debts and salaries to workers. Silver Star Vietnam, a 100 percent South Korean garment enterprise, headquartered in Tan BInh district, for example, still has not paid VND29.6 billion in tax.

When customs officers came to the headquarters at the address registered at the management agencies, they could see only idle workshops.

FDI capital flow changes its way

According to the Ministry of Planning and Investment, it’s now obvious that Vietnam would not be able to attract $14-15 billion worth of FDI in 2012.

The eastern area of the southern region has the highest FDI capital with $5.2 billion worth of capital registered in 2012, accounting for 42.7 percent of the total.

Vietnam has been warned that if it does not change the current policies to attract investment, the foreign investment flow would head for Indonesia and Malaysia instead of Vietnam, because the two countries are believed to have attractive investment encouragement policies.

Cao Sy Kiem, a well-known Vietnamese economist, also said that the world’s economies would see another difficult year 2013, when foreign invested enterprises would leave old markets to seek new opportunities. And if Vietnam does not apply open policies with attractive investment incentives, it would be not able to attract FDI.

EuroCham has reported that there are three big problems that make European businesses hesitate to invest in Vietnam. First, the economic difficulties which have pushed the prices up continuously. Second, state owned enterprises receive a lot of incentives, but they have been working ineffectively. And third, the intellectual property protection has not been done well in Vietnam.

US$1 = VND20,800

Nam Phong