FDI Continues To Report Losses, Deputy Prime Minister "Intervenes"

In a context where foreign-invested enterprises (FDI) are increasingly playing a crucial role in Vietnam’s economy, information regarding the escalating situation of FDI companies reporting losses is attracting significant attention from the public and state management agencies. To clarify the actual situation and propose solutions, Deputy Prime Minister Nguyen Chi Dung has issued close directives, requesting relevant ministries and sectors to participate in the assessment.

Directive From Deputy Prime Minister Nguyen Chi Dung

On March 11th, the Government Office issued Official Dispatch No. 1949, conveying the directive of Deputy Prime Minister Nguyen Chi Dung regarding media reports on the situation of FDI companies reporting losses.

The Deputy Prime Minister requested the Ministry of Finance to take the lead in coordinating with relevant agencies to conduct a comprehensive review and assessment of the issues reported by the press. The results of the implementation are to be reported to the Prime Minister before March 15, 2025.

Alarming Situation: FDI Companies Reporting Increasing Losses

According to media reports, the situation of FDI companies reporting losses is showing an increasingly alarming trend. Statistics indicate that for every 2 FDI companies, 1 is reporting losses. Notably, the rate of FDI companies reporting losses continues to rise, yet these companies are still expanding their investment scale.

Statistical Data From The Ministry Of Finance

A recent report by the Ministry of Finance to the Government on the operational status of businesses has further clarified the picture of FDI companies reporting losses.

As of the end of 2023, Vietnam had approximately 29,000 FDI companies, of which 16,292 reported losses, accounting for over 56%. Compared to the same period last year, the number of underperforming businesses increased by more than 21%. Thus, for every two FDI companies, about one is reporting losses.

In addition, the number of FDI companies with accumulated losses is over 18,140, and the number of companies with equity losses is 5,091. These figures have all increased by about 15% compared to the same period last year.

In terms of value, FDI companies reported losses of approximately VND 217,464 billion in 2023, a 32% increase compared to the previous year. Accumulated losses reached VND 908,211 billion, and negative equity amounted to VND 241,560 billion.

Issues Raised And Recommendations From The Ministry Of Finance

The Ministry of Finance pointed out that many FDI companies have continuously reported losses for years but still continue to expand their investment scale. Furthermore, many companies with large capital, high revenue, and pre-tax profits have relatively modest budget contributions.

In response to this situation, the Ministry of Finance has proposed to the Prime Minister to direct a review of investment policies, thereby developing new mechanisms to attract foreign capital more effectively. The Ministry also emphasized the necessity to strengthen information verification to combat transfer pricing and tax evasion, and to effectively manage revenue sources from FDI business operations.

Deputy Prime Minister Nguyen Chi Dung’s directive demonstrates the Government’s close attention to the situation of FDI companies reporting losses. A comprehensive assessment and timely solutions are essential to ensure a healthy, transparent, and efficient investment environment, while also optimizing revenue for the state budget from this important economic sector.