FDI firms leading loss-making rate for years

Foreign direct investment (FDI) companies have taken the lead in loss-making ratio in Vietnam for many years, reported the Vietnam Chamber of Commerce and Industry on Friday.

Illustrative photo: shutterstock

Illustrative photo: shutterstock

In 2008-2009, the ratio of loose making FDI companies was 51.2 percent and 49.8 percent respectively but they still broadened investment in Vietnam.
Secretary general of the chamber Pham Thi Thu Hang said that the ratio topped 40 percent in the phase of 2007-2015 showing transfer pricing had not been tackled.
Despite reporting much loss, FDI companies were always in the lead of return on asset (ROA) ratio.
FDI companies just reduced losses after the Government applied some measures to control transfer pricing through inspections in 2010 and 2011, when the rate dropped to 44.2 percent and 45 percent.
In the phase of 2012-2015, it rebounded in line with the common trend of the economy’s difficulties.
In 2015 alone, FDI firms ranked second in the loss making ratio after state own enterprises.

By HA MY – Translated by Hai Mien

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