FDI’s most profitable sector in 2017: White Book

13-Jul-2019 Intellasia | The Saigon Times | 6:02 AM Print This Post

Foreign direct investment (FDI) enterprises made more than VND384 trillion in profit in 2017, accounting for 43.8 percent of the total pre-tax profit of all enterprises in Vietnam, according to the White Book on Vietnamese businesses, launched on July 10 by the Ministry of Planning and Investment.

Nguyen Bich Lam, general director of the general Statistical Office, said that all enterprises reported a combined pre-tax profit of VND876.7 trillion in 2017, up 23.1 percent against 2016.

Following the FDI sector, non-State-owned businesses generated VND291.6 trillion in profit, up 55 percent year-on-year and making up one-third of the total.

Meanwhile, State-run firms were least profitable in 2017, earning nearly VND201 trillion. The State sector also posted the lowest profit growth, at 1.8 percent.

As for the return on assets (ROA), FDI companies reported impressive business results, with ROA reaching 7 percent, well above enterprises’ average of 2.9 percent. Meanwhile, the respective rates of State-owned and non-State-owned enterprises were 2.2 percent and 1.8 percent.

FDI firms also had a high return on equity (ROE) of 18.1 percent, while the ROE of State-owned businesses was 11.4 percent and the remainder, 6 percent.

The White Book also includes information on the contribution of enterprises to the State budget, but the information has yet to be disclosed.

However, according to economic expert Bui Trinh, non-State-owned enterprises earned low revenue and profit but contributed the most to the State budget. They accounted for nearly half of the corporate tax revenue in 2016.

Meanwhile, enterprises contributed 28 percent to the State budget, and FDI firms, 26 percent.

Thus, tax policies were not preferential for non-State-owned enterprises.

This is the first edition of the annual White Book on Vietnamese businesses, which is intended to take stock of enterprises active in Vietnam in terms of sector, business model and location.

The government, ministries, agencies and localities can use it to draw up strategies, action plans and policies to ensure the sustainable development of enterprises.

The White Book will be made available on the portal of the Ministry of Planning and Investment on July 22 and the print edition will come out on August 1.

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Category: Economy, Vietnam

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