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$20 billion of foreign capital in Vietnam from tax havens

Staff writer |
British Virgin Islands (BVI) has GDP of more than $1 billion but businesses registered here have invested $19.3 billion into Vietnam.

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The words "tax haven" or "pure heaven" refer to the BVI and some other places in the world - the economies that eliminate almost all taxes on businesses. This is the ideal destination for global corporations. BVI currently has more than 850,000 enterprises, many times more than the population of 28,000 of this Caribbean island nation.

The businesses registered in BIV not only operate in BVI but they bring a huge amount of capital to invest around the world and in recent years, tens of billion U.S. dollars of direct investment capital (FDI) were poured into Vietnam from BIV.

According to the Ministry of Planning and Investment, by the end of 2015, BVI was among the top 5 countries and territories investing in Vietnam, besides the Republic of Korea, Japan, Singapore and Taiwan. BVI had 623 investment projects, with total capital amounted to $19.3 billion.

Some large projects invested by companies from BVI are Vinacapital Trade Center Company Limited with $325 million invested in commercial centers, hotels, office building, hotel services, and real estate; GVD Vietnam Company Limited with $300 million invested in apartments and travel services; Worldon Vietnam Co., Ltd. with registered investment of $300 million to produce high-end garments in HCM City; CJ CGV Vietnam Co. with the nationwide chain of cinemas.

Recently, the Foreign Investment Department said that the U.S. direct investment flows to Vietnam not only comes from the companies founded in the U.S. but also through a number of their branches operating in the BVI such as the case of Intel, Chevron, Procter & Gamble or ConocoPhillips.

In the field of indirect investment on the stock market, the most famous investment fund of BVI in Vietnam is Dragon Capital. Founded in 1994 in BVI, Dragon Capital is the oldest foreign investment fund in Vietnam, with total assets of approximately $1.25 billion. Its investment portfolio consists of stocks, bonds, real estate, and clean technology.

As of May 10, the biggest investments of Dragon Capital in Vietnam are: VND3,564 billion in the Vietnam Dairy Products JSC (Vinamilk), VND1,143 billion in the Asia Commercial Bank (ACB); VND888 billion at FPT; VND1,131 billion at the HCM City Securities Company; VND969 billion in the Hoa Phat Group; and VND1,880 billion in Masan.

In addition, the fund holds stakes in the Saigon Securities Company (SSI), REE, Phu Nhuan Jewelry JSC (PNJ), Hoa Sen Corporation, Phu My Fertilizer. Its Chief Executive Officer is Dominic Scriven.

Founded in 2006 in BVI, Vietnam Asset Management Limited (VAM) is also an investment fund investing largely into pharmaceutical, food, beverage, and biotech companies.

Some other financial institutions formed in tax havens that have poured money into Vietnam are Indochina Capital Adviser, PXP Vietnam Asset Management Ltd., Vietnam Holding Asset Management Ltd., Clear Water Capital Partners Singapore PTE...

According to the Panama papers, BVI is taking the lead of the tax havens with 113,648 offshore companies established by the law firm Mossack Fonseca while Panama has only 48,400 companies.

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