Reporting burden for investors

Many foreign hands have been found guilty of being behind recent serious pollution cases in Vietnam

The government  is now asking for monthly reports from foreign-invested companies and related state authorities to help it find the right policies.

Prime Minister Nguyen Tan Dung last week signed Decision 77/2010/QD-TTg forcing foreign-invested enterprises to report gross revenue, production, legal capital, sources of disbursed capital, recruited labour, manufacturing technologies and taxes every month to local statistics offices.

According to the decision, which takes effect from January 15, 2011, enterprises with more than 10 per cent of foreign capital will have to implement the reports.

Meanwhile, the Ministry of Planning and Investment (MPI) is drafting a circular requiring local authorities and related ministries to report the operations of foreign-invested enterprises as well as foreign direct investment attraction every month and every quarter. This circular is expected to take effect next month. Both the decision and circular draft were introduced as economists and policy-makers raised concerns over the quality of foreign direct investment in Vietnam.

Many environment pollution cases have been detected at foreign-invested enterprises while the MPI warned that many foreign-invested firms were mobilising funds from the Vietnam market for their investment projects.

Dang Huy Dong, vice MPI minister, said that reports from foreign invested enterprises were important for the government to have the right policies and strategies, especially since Vietnam was aiming to lure hi-tech and capital-intensive projects.

“We want to know the exact business operations of foreign-invested enterprises in Vietnam, the jobs they create, their land usages, the net foreign capital being pumped into the country, manufacturing technologies brought to Vietnam and how much money they contribute to the state budget,” said Dong.

The regulations are regulated under the Investment Law and several other legal documents, but have not been seriously implemented. In northern Thai Nguyen, for example, only 15 foreign-invested enterprises out of 70 in the province’s industrial parks have sent reports to the Thai Nguyen Industrial Park Management Authority.

The lack of business operation reports as well as foreign direct investment attraction had been a hindrance for the government to issue the right policies for foreign enterprises in Vietnam, said MPI’s Foreign Investment Agency (FIA) director Do Nhat Hoang said.

“Frankly, we do not know exactly how much money foreign investors have brought to Vietnam and how much money they have mobilised in the domestic market,” said Hoang.

A Ministry of Finance representative said the reports could not be implemented on time, as the deadlines set by the MPI were too tight. Under the government decision, foreign invested enterprises will have to send monthly reports on the 12th of every month and annual reports on March 31 of the following year. Local authorities and relevant ministries will have to send monthly reports on the 15th and 18th of every month, respectively, according to the MPI draft.