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Vietnam remains in the top 10 countries with the largest remittances in the world.

PV (synthesis) January 26, 2025 15:57

Vietnam still maintains its position in the top 10 countries with the largest remittances in the world, making an important contribution to socio-economic development.

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Remittances - Important resource for socio-economic development

Despite the general impact of the global economy, remittances to Vietnam still maintain their position in the top 10 countries with the largest remittances in the world. It is estimated that remittances to Vietnam in 2024 will reach nearly 16 billion USD. This is considered a high level of remittances in the current difficult context.

Important resource for national development

Accordingly, at the end of each year and during the Lunar New Year, the amount of remittances sent back is higher than the average of the months of the year. This factor comes from the sentiments of the majority of overseas Vietnamese towards their homeland, relatives and family every time Tet comes, sending money back to give to relatives at the end of the year, as a tradition of remembering the source of water, showing gratitude and thanks to parents and relatives in the homeland for a prosperous Tet.

The peak season for Tet remittances usually lasts about a month before and after Tet. According to recorded data, the amount of remittances sent domestically during this Tet peak season has increased significantly in both the number of remittances and the amount of money sent per item.

According to the World Bank and the International Organization for Migration, Vietnam has received an average of 17-18 billion USD in remittances each year in the past 3 years. In the past 10 years, remittances have become a bright spot for Vietnam. Although affected by many factors, remittances to Vietnam have decreased in some years following the general trend of other countries, but it still maintains its position in the top 10 countries with the largest amount of remittances in the world and in the top 3 countries receiving the most remittances in the Asia-Pacific region.

As a major economic center of the country, Ho Chi Minh City is the locality that attracts the largest amount of remittances in the country.

Mr. Nguyen Duc Lenh, Deputy Director of the State Bank of Vietnam, Ho Chi Minh City branch, said that it is estimated that remittances to Ho Chi Minh City in 2024 will reach about 9.6 billion USD, an increase of about 140 million USD compared to 2023.

Of which, remittances through remittance companies account for more than 74% of the total remittances transferred to the city and the remainder (nearly 25%) goes through credit institutions.

The regions sending to Ho Chi Minh City show that Asia accounts for the highest, up to 53.8% of the total remittances in 2024, an increase of more than 24% compared to 2023. Remittances from Oceania increased by 20%, America increased by 4.4% but Europe decreased by 19.1% compared to 2023.

Deputy Prime Minister and Foreign Minister Bui Thanh Son affirmed that nearly 6 million Vietnamese people living and working in more than 130 countries and territories are an inseparable part of the nation, contributing to the development of the economy, science and technology, education, health care and other volunteer activities in the homeland.

"More than 421 FDI projects with a total registered capital of 1.72 billion USD in 42 out of 63 provinces and cities, along with remittances forecast to reach about 16 billion USD in 2024, are very important resources for the country's development," said Deputy Prime Minister Bui Thanh Son.

This remittance level is equivalent to 2023, the time when remittances to Vietnam reached a record high after a period of slow growth due to COVID-19.

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Many villages are more prosperous thanks to relatives working abroad.

The Department of Overseas Labor Management (Ministry of Labor, War Invalids and Social Affairs) said that according to data reported by enterprises, in the 11 months of 2024, the total number of Vietnamese workers working abroad was 143,160, exceeding the target of sending 125,000 Vietnamese workers to work abroad under contracts for the whole year.

“This is an important factor contributing to increasing remittances to Vietnam this year,” said the director of a remittance company.

Attractive investment environment for cash flow

Digging deeper into the reasons why Ho Chi Minh City has always been a locality that strongly attracts remittances, Mr. Nguyen Duc Lenh said that this year, Ho Chi Minh City has implemented a number of new policies that are expected to attract remittances more effectively in the coming time, such as the Project on Policies to effectively promote remittance resources in the city from now until 2030.

Accordingly, Ho Chi Minh City proposes that competent authorities consider allowing foreigners of Vietnamese origin who do not reside in Vietnam in general and Ho Chi Minh City in particular to open accounts, choose to keep deposits in foreign currency or in Vietnamese currency and transfer principal and interest in the chosen foreign currency.

Evaluating this project, Dr. Nguyen Tri Hieu said: "Although the issuance is still in its infancy, this is the first time there has been a specific project to attract remittances to specific areas. If issues such as interest rates, bonds, etc. are attractive enough to overseas Vietnamese, it will also be a solution to increase remittances to Vietnam. Up to now, overseas Vietnamese often send money back to their relatives and families. At times when domestic interest rates are higher than international interest rates, they send money back home to enjoy the difference. Currently, the USD interest rate is 0%, so this phenomenon no longer occurs, but this flow is increasing partly because Vietnamese people working abroad believe in the stability of the economy and see better investment opportunities in the domestic market."

According to economist, Associate Professor, Doctor Dinh Trong Thinh, the amount of remittances to Vietnam is increasing. This is a large source of capital supplementing investment in the domestic private economic sector. The money sent by overseas Vietnamese to relatives and families is mainly for spending, building, buying houses, etc. This has greatly contributed to ensuring the lives of many families and supporting social security in the country.

"Over the past years, the Government has had policies to encourage and create conditions for overseas Vietnamese to feel secure in returning home to invest in business as well as to transfer money for investment or support relatives. Among them, the high proportion of remittances for investment shows that the business and investment environment in Vietnam is quite attractive. In particular, with the Law on Real Estate Business taking effect from August 1, 2024, allowing overseas Vietnamese to return to invest and do real estate business like domestic people, the remittance flow to Vietnam will continue to increase," expert Dinh Trong Thinh expected.

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The revised Land Law and the new Real Estate Business Law both have provisions to better protect the legitimate rights and interests of land users.

The revised Land Law and the new Real Estate Business Law both have provisions to better protect the legitimate rights and interests of land users, such as expanding land use rights to Vietnamese citizens, including Vietnamese people residing abroad. Overseas Vietnamese who are Vietnamese citizens (people who still have Vietnamese nationality) will enjoy full housing rights like domestic citizens.

In addition, overseas Vietnamese will be allowed to invest and do real estate business like domestic citizens. Thus, overseas Vietnamese will be allowed to invest in building houses and construction works for sale, lease, or hire-purchase; invest in building technical infrastructure in real estate projects for transfer, lease, or sublease of land use rights with technical infrastructure.

Experts also assessed that the increasing amount of remittances sent to Vietnam not only helps banks increase profits from service activities, but also serves the policy of attracting foreign currency to increase national foreign exchange reserves.

PV (synthesis)
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Vietnam remains in the top 10 countries with the largest remittances in the world.