Slow response to petitions: Ho Chi Minh City Chairman apologizes to South Korean businesses.

On the afternoon of August 16th, the Ho Chi Minh City Trade and Investment Promotion Center (ITPC), in collaboration with the Consulate General of South Korea in Ho Chi Minh City, organized a dialogue conference between city leaders and Korean businesses.

Speaking about the challenges of investing in Ho Chi Minh City, Mr. Cho Sung Yol, General Director of GS E&C in Vietnam, said that businesses are facing two major problems.

Firstly , the reassessment of land prices for the Nha Be Metrocity GS new urban area project.

Specifically, according to the contract signed between GS E&C and the Ho Chi Minh City People's Committee in 2007, GS advanced the land compensation costs for the city to carry out the project. This advance payment was offset against the project's land-related financial obligations.

In 2014, after the Prime Minister approved the implementation timeline, the Ho Chi Minh City People's Committee issued a document confirming the total financial obligations regarding land for the project. However, currently, agencies under the city's jurisdiction are unilaterally re-evaluating the land prices of the project.

GS E&C argues that if Ho Chi Minh City unilaterally reassesses land prices and requires businesses to pay the difference, it will negatively impact the stability and confidence of FDI businesses, including GS E&C.

Korean businesses submit proposals to Ho Chi Minh City leaders. (Photo: ITPC)

This issue was also raised by the company during a dialogue with city leaders last year.

The company requested the Ho Chi Minh City People's Committee to expedite the reassessment of land prices and guide the investor in fulfilling financial obligations within the land prices determined in 2014 so that the project can be implemented on schedule.

Secondly , there is the issue of delayed final settlement of construction costs for the Tan Son Nhat - Binh Loi - Outer Ring Road (TBO).

In 2016, GS E&C completed the construction and handed over this road to Ho Chi Minh City for use. However, more than seven years have passed, but the final settlement of construction costs for the road is still being delayed and has not been completed.

Meanwhile, Choi Bundo, Chairman of the Korean Chamber of Commerce in Central and Southern Vietnam (KOCHAM), reported that some Korean companies in Ho Chi Minh City are facing difficulties in VAT refunds, affecting their business operations.

"The General Department of Customs and the General Department of Taxation are both under the Ministry of Finance , but it is puzzling that the General Department of Taxation does not approve VAT refunds for cases that have been recognized and licensed by the customs authorities," a KOCHAM representative reflected, requesting that the authorities review the matter and issue directives soon.

According to Mr. Shin Choong IL, Consul General of South Korea in Ho Chi Minh City, South Korean businesses mainly complain about delays in tax refunds; cumbersome procedures related to investment licenses, land use right certificates, etc.

Ho Chi Minh City Chairman Phan Van Mai at a dialogue with South Korean businesses on the afternoon of August 16. (Photo: ITPC)

After listening to the businesses' proposals, the Chairman of the People's Committee of Ho Chi Minh City, Mr. Phan Van Mai, affirmed that for some issues related to the authority of the General Department of Taxation, Ministry of Finance, the city will work to submit proposals to the competent authorities for resolution.

Recently, Ho Chi Minh City has resolved 13 out of 21 requests from the Korean business community in the city. Of the remaining 8 issues, some were carried over from previous dialogues. The Ho Chi Minh City People's Committee will issue notifications for each case so that KOCHAM can monitor the progress and businesses can stay informed.

"Regarding the case of GS E&C Company, I sincerely apologize to the director. There are ongoing issues. The difficulties in the valuation process are significant, and there is no final conclusion yet. When establishing the valuation team, the investor should also participate and provide input," the Chairman of Ho Chi Minh City said.

Regarding the payment for the Tan Son Nhat - Binh Loi - Outer Ring Road (TBO), the Chairman of Ho Chi Minh City said that the Ministry of Finance recently conducted inspections of many projects, including this one. The city has worked with the inspection team from the Ministry of Finance to find a solution for the enterprise.

Chairman Phan Van Mai also shared that the city is very eager to listen to the opinions of Korean investors in order to prepare and will sit down with Korean investors at an appropriate time to promote investment. The city understands that to attract new investors, resolving obstacles and supporting existing investments is also very important.

South Korea is currently one of the city's major trading partners, ranking 4th out of 120 countries and territories with direct investment in the area.

In 2022, there were 125 direct investment projects by South Korean investors in Ho Chi Minh City, with a total investment capital of over US$60.6 million (accounting for 10.25% of the total foreign investment in Ho Chi Minh City).

To date, South Korea has a cumulative total of 2,135 projects, with an investment capital of over 5.5 billion USD (accounting for 9.64% of the total foreign investment in Ho Chi Minh City).

The Chairman of Ho Chi Minh City has submitted an urgent proposal regarding the mobilization of remittances . In order to attract remittances and create resources for economic development, Ho Chi Minh City will propose several important measures to the central government.

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