Many investors in Vietnam have complained that they have fallen victims to traps despite the welcoming red carpet rolled out by local authorities.
Visitors at the Dai Nam Tourist Park in Binh Duong Province
These investors are normally promised various incentives and favourable conditions by the local authorities, but behind these tempting offers are usually scams.
Many provinces and cities have been trying to attract investments through various methods. They hold lots of press conferences and briefings in their areas or even abroad to lure investors. Many favourable policies are highlighted such as free land use rights for 10 years, 20 years or 30 years, and subsidised corporate income tax rates.
There has been tough competition between cities and provinces in attracting investment. Several experts told a recent seminar held by the National Assembly's Economic Committee that the level of competition has become increasingly sharp. But in fact, the investment picture in the country’s 63 provinces seems relatively gloomy.
This can be explained by a lack of direction and proper instructions from the government, which have resulted in local commitments contradicting national government policies.
Some other localities have other reasons for not being able to realise their promises to investors. Often this is due to the fact they made overly-big promises that they now cannot deliver. Harassment from local government officials is also another reason.
Many FDI as well as domestic investors have endured these traps. Chairman and CEO of the Dai Nam Joint Stock Company, Huynh Uy Dung has poured trillions of dong into the Dai Nam Tourist Park in the southern province of Binh Duong following invitations from the local authorities. After that, he faced numerous problems, including continual inspections and fines from a variety of different agencies looking for their piece of the action.
Ho Xuan Hieu, director of Quang Tri Commercial JSC who had a project in the central province of Quang Tri also said that they received 45 inspections in 2015 alone.
There are, of course, really strong provinces that are providing good opportunities for investors but those who are placing traps are marring Vietnam’s reputation and the investment environment.