VietNamNet Bridge - By contributing capital to enterprises and projects, and holding stakes, though in very small amounts, Chinese investors can hold land in Vietnam.

Director of the Da Nang City Planning and Investment Department

Tran Van Son, director of the Da Nang City Planning and Investment Department, said at the working session with Deputy Minister of Planning and Investment Dao Quang Thu late last week that many Chinese people now exploit a legal loophole and stay in the city for a long time.

“I know many investors who come to Da Nang not to do business, but just want to obtain the investment license and use the licenses for different purposes,” Son said

“With the license, they can travel freely; no need to have entry visas,” he said.

This explains why in some cases Chinese investors ask for land allocation for 50 years, though the projects they register are very small scale. 

Also according to Son, in order to stay in Vietnam, Chinese investors contribute capital to enterprises and projects, or buy shares in very small volumes. 

Meanwhile, Vietnamese management agencies cannot refuse to grant investment licenses to the investors because the Investment Law does not set limits on the minimum capital investors must have.

The director of the local investment department, therefore, suggested amending the Investment Law and stipulating the maximum duration for small projects, to which management agencies can refer to when handling the cases. 

Vietnamese management agencies cannot refuse to grant investment licenses to small projects because the Investment Law does not set limits on the minimum capital investors must have.

Son also asked to give more rights to investment registration agencies, allowing them to consider the feasibility and financial capability of foreign-invested projects and make decisions.

In cases of foreign investors contributing capital or acquiring shares in Vietnamese enterprises and projects which need land allocated, the Da Nang investment registration agency wants to have the right to consult with agencies before informing investors. 

Many foreign investors not only try to dodge laws to obtain land in Da Nang, but also try different ways to evade tax.

The government’s Decree 118 stipulates that when institutions buy stakes and contribute capital to enterprises and projects, they don’t have to change the investment license. Since the names of shareholders are not written down in investment licenses, this is a big loophole for investors to exploit to evade the tax they have to pay when transferring assets.

Hyatt Hotel in Da Nang is an example. A company set up a subsidiary which came forward and developed the hotel. Later, the company was transferred to another company overseas; however, the subsidiary still maintained its legal status. This was why the city could not collect tax in the transfer case.


VNE