Khanh Hoa Warns Against Circumventing Laws for Foreign Investment

The province of Khanh Hoa is taking a firm stance against illicit practices in its burgeoning investment landscape. Recent findings from the Provincial Police's Economic Security Department reveal a troubling trend: foreign investors are allegedly exploiting Vietnam's open investment policies and legal framework to gain control of projects and company shares, often through indirect means. This circumvention of regulations, particularly in key sectors like energy and tourism, poses a significant threat to the local investment environment and national security.

These schemes often involve domestic investors who secure project approvals and then sell them off for profit, while foreign entities "operate in the shadows" or "invest illegally." Instead of directly establishing projects, they opt for acquiring existing ones from Vietnamese businesses through share transfers or capital contributions. This method allows them to bypass certain financial obligations and potentially gain control of high-value assets, especially in strategic locations like the North Cam Ranh Peninsula, which is near coastal borders and defense-sensitive zones.

The provincial authorities are particularly concerned about the indirect ownership of projects through share acquisitions, with reports indicating 26 such transactions totaling approximately $23.6 million by late 2024. Furthermore, some foreign investors exhibit unclear legal status, questionable financial capacity, or limited operational experience. The practice of forming joint ventures with Vietnamese companies that have low charter capital, or registering projects in Khanh Hoa while the legal entity's nationality differs from the actual investor's, raises further red flags.

Tuổi Trẻ, as a publication deeply invested in Vietnam's economic development and national interests, views these findings with grave concern. While we welcome foreign investment, it must adhere strictly to Vietnamese law and contribute positively to our nation's growth. The exploitation of our policies for illicit gain and the potential security risks associated with these opaque transactions cannot be tolerated. The province's proactive measures to investigate and prevent such activities are crucial for maintaining a stable and secure investment climate, ensuring that development benefits Vietnam and its people, not just opportunistic foreign entities.