Prime Minister Nguyen Tan Dung has signed a resolution which includes a regulation requesting foreign direct investment (FDI) firms to make a deposit in order to help prevent a, by now, common situation in which owners of FDI firms flee the country, leaving behind whatever facilities they have and abandoning their employees.

Recently, owners of many FDI projects in Vietnam have fled, leaving their employees behind

By the end of June this year, Vietnam had  15,067 valid FDI projects with a total registered capital of USD218.8 billion, with USD106.3 billion disbursed as salaries, creating 2 million jobs.

However, due to legal loopholes, a number of FDI companies still use backward technology, causing environmental pollution, plus many have used transfer pricing to avoid taxes, causing the state budget heavy losses.

Recently, owners of many FDI projects have fled, leaving their employees behind. According to the Ministry of Planning and Investment, as of late May this year, as many as 518 FDI company owners had run away. For the most part these companies are from South Korea and China.

Under the recently-signed resolution, licensing agencies have to pay attention to all large-scale projects with potentially big socio-economic impact for their investors’ capital mobilising ability and especially a sanction that makes a deposit necessary to ensure that the project is implemented on schedule.

However, the deposit regulation has drawn some concerns that this will be a disadvantage for Vietnam in luring FDI projects compared to other countries which do not require a deposit.

The government resolution also mentions measures to clarify the legal situation in this area as well as to create investment policies in a uniform manner in order to forecast correctly and provide transparency for investors.

Speaking with a DTiNews reporter, the Minister and Chairman of the Government Office, Vu Duc Dam, said not only FDI companies but also local ones have seen the “absence of investor” syndrome.  Last year, the government was instructed to help firms of this kind  find other jobs.

To tackle the flight of owners from FDI projects, the government has assigned the Ministry of Planning and Investment to revise the Investment Law of 2005. During the revision process, agencies, ministries and localities are urged to keep a close eye on every FDI enterprise in order to protect the rights of the employees of these companies.