VN firms expand overseas presence

by Thien Ly

Overseas investment by Vietnamese companies has risen sharply in the past few years in terms of quality and scale of projects.

According to the Foreign Investment Agency (FIA), they have invested a cumulative US$6.8 billion in 440 projects in 49 countries and territories, mainly in Asia. As of August, $1.5 billion of the investment was actually disbursed.

Just this year investments have topped $2.1 billion.

The projects are mainly in sectors like manufacturing, construction, services, and agriculture.

FIA director Phan Huu Thang said Vietnamese firms’ potential for overseas investment was huge, with the actual investment hardly matching their desire and capability.

The Government recently approved an overseas investment promotion plan, which would provide an important legal basis and impetus for Vietnamese companies to further develop their overseas presence. The Ministry of Planning and Investment has also encouraged enterprises to expand investments to new markets like Latin America and Eastern Europe in areas like energy, exploitation of natural resources and cultivation of cash crops.

Capital gains tax: property

After more than one week of selling out properties, even at a loss, to avoid the new capital gains tax, HCM City investors have almost completely stopped transactions related to lands or apartments.

The real estate market has been in a tizzy after the Government said the real-estate profits would be taxed at 25 per cent with effect as of the end of this month. Many people have panned the new provisions as being unfair even before specific guidelines for their application have been announced.

The developers of the Him Lam-Kenh Te housing project in District 8 say there was not a single customer last week.

The situation is starkly different from the last few months when it carried out 30 or 40 transactions a month.

Other busy areas like the districts of Nha Be, 2, and 9 have also seen business dry up. Nguyen Xuan Loc, head of Vinaland Company’s office in District 2, says few transactions are being done.

Property trading floors have fared no better. Pham Van Hai, director of the ACB Real Estate Company, also admits there are few transactions, with only medium-priced apartments still being bought and sold.

Analysts say that both developers and buyers are confused about the new capital gains tax regime, and are awaiting clearer guidelines. Tax offices themselves are yet to receive guidelines on its implementation from the Ministry of Finance or the General Department of Taxation. — VNS

Source: Viet Nam News