Setting Up Businesses To … Transfer To Chinese

VietNamNet Bridge - Many Vietnamese in Nha Trang in Khanh Hoa province are registering businesses under their names and then transferring them to Chinese, allowing Chinese staff to work without a work permit, Khanh Hoa newspaper reported.

Foreign travelers in Nha Trang

In early November 2017, the provincial Taxation Agency received documents on a capital assignment deal from Do Truong Hai, a capital contributor to Dai Thanh Phat Trade, Service and Tourism Co Ltd, headquartered in Vo Cang hamlet in Nha Trang.

Tax officers discovered abnormal figures in the documents. Dai Thanh Phat which had  charter capital of VND88 billion, got a business registration certificate on October 10, 2017. It had two capital contributors – Nguyen Thi Thuy Trang, 23, who contributed VND44.88 billion, and Do Truong Hai, 51, who contributed VND43.12 billion.

Suspecting businesses with large capital contributions, the taxation agency conducted verification and found that Trang was a freelancer and Hai a seafood trader.

On October 15, 2017, just one day after he made a capital contribution, Hai transferred his contributed capital to people with Chinese citizenship, including Wang Xingjun, 53, (VND2.05 billion), Zhou Tianfu, 41, (VND2.15 billion), Lan Lu, 50, (VND2.075 billion), Wu Lei, 38, (VND2.2 billion) and Zhangm Chao, 36, (VND11.5 billion).

On October 27, 2017, Dai Thanh Phat, with seven new capital contributors, was granted a business registration certificate from the provincial planning and investment department.

However, according to Luong Van Nga, head of the provincial taxation agency, payments for the share and capital contribution must be carried out via the accounts of investors at commercial banks in Vietnam (except payments in property). 

This means that the capital transfer deal implemented by Hai and the Chinese investors did not observe regulations and the provincial taxation agency did not confirm the deal.

On November 23, 2017, the local taxation agency summoned Dai Thanh Phat’s managers to clarify the capital transfer, but they did not turn up. On November 30, Hai canceled the capital transfer and in early 2018, Dai Thanh Phat submitted documents to dissolve the enterprise.

The planning and investment department checked the affairs of transferring capital to foreigners. It discovered that 227 foreign invested enterprises had changes in shareholders and members from July 1, 2015 to December 27, 2017 (Vietnamese set up the businesses and then transferred shares to foreigners). 

However, the number of enterprises transferred to Chinese is still unclear.

An official of the department said many businesses were established by Vietnamese citizens with very low registered capital and were transferred to Chinese after one or two days.

Under current laws, if someone is a capital contributor to Vietnamese companies, they can work in Vietnam without a work permit or visa.

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