Many lawyers have raised their concern about the fact that many foreign investors, especially Chinese, now exploit loopholes of the 2014 Investment Law to acquire land plots in some important areas, warning that the problem will be ‘serious’ if this cannot be stopped.
Article No 46 of Decree 118/CP and Article 26 of the 2014 Investment Law stipulates that the foreign investors, who contribute capital to Vietnamese enterprises, or buy stakes in domestic business institutions, don’t have to follow procedures for investment registration certificates.
The Decree 139 dated in 2007 also stipulates that if businesses to be established have a foreign ownership ratio of no higher than 49 percent of their charter capital, the establishment procedures will be implemented in accordance with the Enterprise Law and Decree 88. This means that procedures for these foreign-invested businesses to follow will be the same as the procedures for Vietnamese businesses.
As such, a loophole exists, a lawyer said. “Under the current laws, foreign direct investors can only begin operation after getting the investment registration certificates. The foreign investors who make investments by contributing capital to Vietnamese businesses don’t have to follow the procedures,” he said.
The loopholes have been exploited by Chinese investors to obtain land plots in some important areas in the central city of Da Nang.
Tran Van Son, director of the Da Nang City Planning and Investment Department, confirmed this, saying many Chinese have been trying different ways to dodge the laws and stay a long time in the city.
“I know many investors who come to Da Nang not to do business, but to obtain an investment license and use the licenses for different purposes,” Son said.
Dien Dan Doanh Nghiep’s reporters have found that one of the four capital contributors to V.N.Holiday Company, which has 24 land plots and charter capital of VND40 billion, is Li Jinan with Chinese nationality.
The investor contributes VND19.2 billion, or 48 percent, to the company, while the three other Vietnamese investors have 52 percent of capital.
Diep Phuc Loi Company which has 17 land plots and charter capital of VND199.93 billion also has one Chinese investor – Harvest View Inc Limited which contributes VND84 billion, or 42.35 percent of capital.
Meanwhile, the owners of Nguyen Thinh Vuong Company which has 10 land plots and charter capital of VND20 billion includes an investor from Hong Kong – Hankey Enterprise Ltd which contributes VND9.8 billion, or 49 percent.