Ho Chi Minh City named among top 10 wealthiest cities in the world 2023

Thursday, 20/04/2023 21:15
Ho Chi Minh City, the largest financial hub in Vietnam, has been named among the top 10 wealthiest cities in the world for this year, announced Henley & Partners, the global leader in residence and citizenship by investment, in partnership with wealth intelligence firm New World Wealth.

According to the Voice of Vietnam, the southern city is emerging as Asia’s next big millionaire hotspot represented by rapidly expanding sectors such as financial services, textiles, technology, electronics, telecoms, chemicals, and tourism, according to the report.

The 10 wealthiest cities in the world are ranked in terms of their number of resident millionaires. All figures are from over the past decade starting from 2012 and ending in 2022.

‘Millionaires’ or ‘high-net-worth individuals’ refer to individuals with investable wealth of US$1 million or more.

Cities located in the United States and China dominate the top 10 wealthiest cities in the world, while only one European city, London, makes it onto the list.

Topping the list is New York City which is home to 340,000 millionaires, 724 centi-millionaires, and 58 billionaires. It is the financial centre of the US and the wealthiest city in the world.

Tokyo in Japan ranks second, which is home to 290,300 resident millionaires, 250 centi-millionaires, and 14 billionaires.

Third position goes to the Bay Area, which includes the City of San Francisco and Silicon Valley, which is home to 285,000 millionaires, as well as 629 centi-millionaires, and a high number of billionaires at 63.

In 2000, London was the top city in the world for millionaires, but it has slipped down the list over the past 20 years, it is now placed in fourth position.

Apart from Ho Chi Minh City, Singapore is the only other Southeast Asian representative to make the list as it is currently home to 240,100 millionaires, 329 centi-millionaires, and 27 billionaires, thereby ranking fifth in the top 10.

Vietnam, Australia promote trade, tourism exchange

A Vietnam-Australia trade and tourism promotion conference was held by Vietnam Airlines, Thien Minh Group and Vinpearl JSC in Sydney on April 19, drawing a large number of Australian businesses and travel firms from different Australian localities, reported VOV.

Vietnamese Consul General in New South Wales, South Australia and Queensland Nguyen Dang Thang addresses the event (Photo: VNA) 

Addressing the event, Vietnamese Consul General in New South Wales, South Australia and Queensland Nguyen Dang Thang said that right after Vietnam and Australia reopened their doors one year ago, the number of tourists travelling the two countries has continuously increased.

Statistics from the General Statistics Office of Vietnam showed that Vietnam welcomed 3.66 million foreign visitors in 2022 and 3 million in the first quarter of this year, of whom 85% arrived by air.

According to Australian Bureau of Statistics (ABS), Vietnam is among the top 10 favourite destinations for Australian tourists.

Currently, Vietnam Airlines is operating direct air routes to the majority of the other nine destinations like the UK, India, the US, and Indonesia, he noted.

Vietnam, Australia promote trade, tourism exchange hinh anh 2UNESCO-recognised
Ha Long Bay (Photo: VNA) 

Speaking to Vietnam News Agency, Nguyen Huu Tung, chief representative of Vietnam Airlines in Australia, said that the airlines is operating 16 flights between Vietnam and Australia each week. Particularly, the Hanoi-Melbourne route will be officially launched from June 15 with two flights per week, making it easier for Australian visitors to explore northern tourist destinations of Vietnam and transit to other countries such as Germany, France, the UK, the Republic of Korea, and Japan.

Participants at the event agreed that Vietnam has great tourism potential and is a good choice for Australian tourists.

Many Australian travel firms said that Australian tourists are increasingly interested in Vietnam and tend to choose the Southeast Asian country for their future vacations.

Yvonne Chapple from Flight Centre said that the firm has received many requests from its customers for Vietnamese tourism information, especially destinations in the north.

Chapple held that although Thailand and Bali (Indonesia) have received the largest bookings, Vietnam has still been among the top five most popular Asia destinations chosen by Australian visitors.

Vietnam seeks to retain FDI firms if global minimum tax is in effect

According to the Voice of Vietnam, Vietnam is looking for solutions to retain foreign investment firms, especially giants such as Samsung, Apple, and Foxconn, in the event that the global minimum tax is applied in the country.

A major challenge

Large multinational firms will be impacted if the global minimum tax rate of 15% is in efffect in Vietnam. (illustrative image). 

The global minimum tax initiated by the Organisation for Economic Cooperation and Development (OECD) has become a hot topic globally as it impacts large corporations’ investment strategy, as well as the Governments’ investment attraction policy. A tax rate of 15% will be applicable to large firms with an annual turnover of EUR750 million. This tax policy is scheduled to take effect in most EU states, along with Japan, the Republic of Korea, Singapore, Indonesia, Hong Kong (China), and Australia, among others in 2024. However, it is yet to be effective in Vietnam. 

Currently, Vietnam boasts about 335 projects with registered investment capital of over US$100 million each operating in the fields of processing and manufacturing in economic and industrial zones. Most of them are invested by high-tech firms, such as Samsung, Intel, LG, Bosch, Sharp, Panasonic, Foxconn, and Pegatron, with all of these likely to be subject to the global minimum tax if it is applied in Vietnam.

With an average income tax rate of around 12.3%, even as low as 2.75 to 5.95%, the country is using tax incentives as a solution to attract foreign investment. If the Government does not introduce timely response solutions, then benefits from the corporate income tax incentives that foreign firms enjoy in the nation will no longer exist, thereby affecting its attractiveness, as well as the competitive advantage of the local market in attracting FDI.

At a workshop held on April 18 in Hanoi, Choi Joo Ho, general director of Samsung Vietnam, said that the implementation of the global minimum tax will make Vietnamese tax exemption and reduction policies no longer effective for FDI enterprises, as well as having negative effects on the local investment environment.

The difficulty is even greater for corporations that are setting up production bases in countries that seek to attract investment through corporate income tax incentives, he warned.

Major suggestions

Experts give opinions at a conference “Global minimum tax: International experiences, potential effects and implications for Vietnam” held in Hanoi on April 18. (Photo: tapchitaichinh.vn) 

With a total investment of US$20 billion, Samsung Vietnam represented by six manufacturing legal entities and a research and development centre produces half of smart phones globally. It is expected that Samsung and other large foreign firms will be officially affected by the global minimum tax policy starting from 2024.

Choi therefore suggested that the Vietnamese Government develop new forms of support, like the preferential monetary support mechanism that is widely applied in other countries such as the US, Germany, and India in a bid to compensate FDI businesses impacted by the application of the global minimum tax.

He also suggested that the Government introduce a qualified domestic minimum top-up tax (QDMTT) mechanism that calculates the excess profits of constituent entities located in the jurisdiction in a way that is equivalent to the GloBE Rules to protect its tax base.

Hong Sun, president of the Korea Chamber of Commerce in Vietnam (KOCHAM), proposed that Vietnam legislate this tax in a bid to reduce the impact on companies that have invested in the country, whilst simultaneously creating peace of mind for large investors who are intending to do business in the Vietnamese market.

Sharing this perspective, Robert King, head of Ernst & Young Indochina in Vietnam, pointed out that in the event the tax mechanism is not adopted, the country will not only lose the tax difference, but also its competitive advantage will also be affected.

As an investment recipient, Vietnam must achieve two important goals of proactively gaining the right to tax, and creating a favourable investment environment to ensure effective competition in terms of attracting foreign investment, he stressed.

According to Dang Ngoc Minh, deputy director general of the General Department of Taxation, relevant Vietnamese agencies are closely monitoring countries’ movements and will therefore report to the Government.

He suggested that the Government first raise the minimum tax rate to 15% for businesses and then promulgate regulations relating to tax deduction at source in Vietnam. He also stressed the need to amend tax incentives as a way of protecting domestic revenue, promulgate a minimum tax rate of 15%, and introduce tax incentives in support of investment and labour training costs, as well as green growth and environmental protection./.