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70% of overseas remittances invested in business projects

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Overseas Vietnamese remitted $18.9 billion to relatives in Vietnam in 2018, making up 6.6 percent of the country’s GDP.

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Luong Thanh Nghi, deputy chair of the State Committee for Overseas Vietnamese, said the majority of Vietnamese remittances have flowed into production and business. Money has also been following startup projects.

Nhip Cau Dau Tu newspaper cited a report that said 3,000 overseas Vietnamese have invested in enterprises with total capital of $4 billion.

These included a project developed by Dr Nguyen Thanh My, 60, an overseas Vietnamese from Canada, who returned to Vietnam to start a closed technology chain in pharmaceutical chemistry and optoelectronics.

In HCM City, about 30,000 young overseas Vietnamese come to Vietnam each year, looking for business opportunities or developing startup projects.

According to the HCM City Science & Technology Department, more than 20 foreign partners have committed to give support and 760 startups have been established. These include production projects initiated by young overseas Vietnamese.

Many of them have succeeded in Vietnam. Pops Worldwide, which specializes in distributing and managing music content, was developed by Esther Nguyen, an overseas Vietnamese in the US.

Other success stories include Christinas, an online tourism model from Thu Nguyen from the US, WisePass, an app by Lam Tran from France, and Ru9 foam production startup of Trang Dang and Vinh Nguyen from Australia.

Nguyen Hoang Minh, deputy director of the HCMC Branch of the State Bank of Vietnam, said on Vietnambiz that $3.8 billion worth of overseas remittances to HCMC had arrived by the end of October. 

In general, remittances increase sharply in the last months of year. They were expected to reach $5.2 billion by the end of December.

Sixty percent of remittances are from the US, while 19 percent are from Asian countries. About 70-72 percent of remittances go to production & business projects, 22 percent to the real estate sector, and the remaining to relatives in Vietnam.

Analysts say the current gap between dong and dollar deposit interest rates has attracted more overseas remittances. The VND interest rate is now hovering around 8 percent per annum, while the dollar interest rate is zero percent. People are now tending to convert dollars into dong to deposit dong at banks, which is bringing high profits.

Overseas remittances to Vietnam go through four channels – commercial banks, economic institutions, customs or post. About 72 percent of remittances go through commercial banks.


Source: VietNamNet

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