VietNamNet Bridge - Taiwanese Formosa was welcomed warmly when it arrived in Vietnam 15 years ago as a major foreign investor with multi-billion dollar projects. But it has been involved in many scandals.

In July 2008, Formosa decided to pour money into Formosa Ha Tinh, a steel complex in the Vung Ang Economic Zone. The project covers an area of 3,300 hectares, including the sea surface area (Son Duong Port), with the land lease for 70 years.

Nine shareholders contribute capital to Formosa Ha Tinh, seven of which are subsidiaries of Formosa Group, holding 95 percent of stakes. 

The steel mill, capitalized at $10 billion a year, is expected to have production capacity of 7 million tons of ingot steel in the first phase.

Taiwanese Formosa was welcomed warmly when it arrived in Vietnam 15 years ago as a major foreign investor with multi-billion dollar projects. But it has been involved in many scandals.

The Vung Ang 1 Economic Zone with the Son Duong deep-water port is a reasonable place for an industrial complex, and it allows the investor to develop project at a low investment rate.

Prior to that, in 2001, Formosa injected money into Dong Nai province by setting up Formosa Dong Nai. A weaving & dying complex covering an area of 300 hectares has been set up in Nhon Trach III Industrial Zone which churns out yarns, textiles and plastics.

Many members of Formosa’s family operating in different production fields are in Dong Nai, including Formosa Taffeta Dong Nai, Formosa Taffeta Viet Nam (textile & dying) and Formosa Gear (mechanical components).

A report shows that in 2014, the company’s turnover reached VND17.1 trillion, while its total assets and stockholder’s equity reached VND17.4 trillion and VND13.3 trillion, respectively. With the figures, Formosa has become the biggest foreign invested enterprise in Vietnam.

To develop the projects, Formosa has received investment incentives from the government of Vietnam.

The steel complex, for example, has enjoyed the preferential corporate income tax rate of 10 percent since the day it has taxable income (the common tax rate is 20 percent since January 1, 2016).

Formosa’s projects can also be exempted from import tax for specialized transport equipment and a natural resources & environment tax, and also have a 40 percent environment protection fee reduction and other preferences.

In the last 15 years in Vietnam, Formosa has caused a series of scandals. It was discovered employing about 3,000 Chinese unlicensed workers in Vung Ang IZ in 2014.

The scaffolding collapse at the Son Duong Port in Vung Ang IZ in March 2015 caused 13 deaths and injured 29 people.

In March 2016, Formosa was discovered discharging chemicals into an area adjacent to the road in Ky Lien Ward.

Most recently, it has been accused of causing the mass fish deaths in four central provinces of Vietnam.


MTG