Vietnam tightens profit repatriation rules

TN News

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The Ministry of Finance has issued a new circular that bans foreign-invested companies from sending profits home if they are in an accumulated loss position.

Otherwise, the new regulations, which will take effect coming January, allow FDI companies to repatriate their profits annually after they have completed their tax obligations in Vietnam for the financial year.

Profit repatriation, either in cash or other forms of assets, must comply with other rules on foreign currencies and trade policies.

The circular came after many FDI companies were found hiding profits in Vietnam.

The Ho Chi Minh City tax department said more than 1,100 foreign-invested companies in the city reported losses in 2009, but it suspected they have hidden around VND6 trillion in profit.

Vietnam attracted US$12.8 billion in FDI pledges as of October 20. The southern province of Ba Ria-Vung Tau ranked first with $2.25 billion, followed by Quang Ninh Province and Ho Chi Minh City.

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