The ministry of Planning and Investment has recently analysed the benefits and problems of 25 years of foreign direct investment.

Deputy minister of Planning and Investment Bui Quang Vinh

One of the most pressing problems has been tax avoidance. Coca-cola was the most recent example. The soft drinks corporation has expanded since 1993 but Coca-Cola Vietnam has always reported huge losses.

Adidas Vietnam, which has invested since 1993 and currently employs 80,000 workers, earning VND22 trillion in revenue (USD1 million), still reports losses.

Talking with VTV1, deputy minister of Planning and Investment Bui Quang Vinh said transfer pricing is a common problem in any countries that have FDI companies.

Those companies have closed production processes because their raw materials come from the mother companies so it is difficult to check the input and output costs.

"It's the responsibility and a challenge for the finance and tax departments," Vinh said.

A plan to prevent transfer pricing was approved two years ago but Vinh said it needs co-operation from many state agencies. "We should be stricter with this problem but we shouldn't blow it out of proportion because Vietnam's business environment could be affected." he said.

After 25 years of attracting foreign investments, Vietnam has about 14,552 projects with total registered capital of USD210.5 billion. The contribution of the FDI companies to the GDP increased from 2% in 1992 to 18.97% in 2011. They also provided jobs for nearly six million people.

However, FDI projects also have some shortcomings such as low added value and lower capital disbursements.

Technologies that have been transferred to Vietnam remain not very advanced and most workers still have modest incomes.  Moreover, tax evasion remains a common problems with FDI companies.