American billionaire proposes new investment fund in Vietnam

During his visit and work in Vietnam, American billionaire Nicolas Berggruen - director of Berggruen Holdings Group, chairman of Berggruen Institute - met with Prime Minister Pham Minh Chinh . He shared about the model of a fund for investment and development.

According to the American billionaire, having an investment fund helps to have capital to improve infrastructure, reducing the gap between rich and poor. In the photo: the construction site of a multi-level tunnel at An Phu intersection, Thu Duc City, Ho Chi Minh City on the afternoon of February 9 - Photo: THANH HIEP

Sharing exclusively with Tuoi Tre about the proposal to establish a new investment fund, the American billionaire said that to meet the current growth rate, Vietnam needs to develop a separate fund model that is suitable for its culture, economy and governance system.

Vietnam could consider requiring newly established enterprises to contribute a portion of their shares (10-20%) to the national investment fund. In return, they could enjoy tax incentives.

Billionaire Nicolas Berggruen

Efficient funds help maintain low taxes

* Specifically, what does the development investment fund model that you proposed in your recent working session with the Prime Minister look like?

Billionaire Nicolas Berggruen

- I will give two examples. First, as a relatively young country compared to Vietnam, Singapore has achieved success in just a few decades.

The highlight lies in building a sovereign wealth fund (SWF) - one of the key drivers of shared well-being and prosperity for Singaporeans.

These funds, professionally and independently managed, focus on investing in areas that offer optimal returns, from domestic infrastructure to international investment opportunities. The ultimate goal is to grow the fund value, thereby providing resources to the national budget.

Currently, the sovereign wealth fund (SWF) is the largest contributor to Singapore's budget, helping the government maintain low taxes.

As a result, citizens enjoy high-quality public services, including education, health care, security and housing, while still bearing a lower tax burden than many other countries. This is a prime example of the effective use of sovereign wealth funds for the common good.

Another model from Australia, where super savings funds (also known as pension savings funds) have changed the socio-economic landscape within two decades.

This policy was initiated by former Prime Minister Paul Keating and was designed to provide financial security to all citizens. It has proven effective in helping people significantly improve their living standards and reduce inequality.

In Australia, the fund is built on the principle that each individual knows their savings and how to manage them.

Remarkably, in just 20 years, thanks to the power of compound interest and effective investment strategies – including investments in infrastructure at home and abroad – the fund has grown dramatically. Today, nearly every Australian family owns a retirement savings account, helping to sustainably reduce poverty.

This success story started small: just 3% of the employee's salary, then gradually increased to 6%, 9% and now 12%. Although the contribution rate is not high, the accumulated value is amazing.

The total assets of these funds now exceed Australia's GDP, making it the country with the highest average wealth in the world, surpassing the US.

The key to this model is the principle of "pre-distribution", rather than post-tax redistribution, which means that people's contributions are tax-free, provided they can only be withdrawn at retirement age.

It helps people participate and benefit directly from economic growth, while reducing inequality from the start. Over 20 years, these funds have created significant value, helping the majority of Australian households build significant wealth.

Australia is not only a rich country, but also has an equitable distribution of wealth, thereby reducing inequality and ensuring that everyone has a stake in the economic future.

Having an effective fund will help maintain low tax rates. In the photo: people doing procedures at the Ho Chi Minh City Tax Department - Photo: TTD

Need to develop own model

* So what can Vietnam learn from these models?

- Vietnam needs to develop its own model, suitable to its culture, economy and governance system. For example, the national investment fund model, which means creating a professionally managed fund to invest in high-profit sectors, both domestic and foreign, including infrastructure.

Or we can also mobilize resources through personal savings funds. Introduce savings accounts for citizens, similar to Australia, but adapted to Vietnam's informal economy.

Another proposal that I think Vietnam can also consider is to require newly established enterprises in Vietnam to contribute a portion of their shares (10-20%) to the national investment fund.

In return, they can enjoy tax incentives that help society as a whole benefit from the success of large businesses, while not putting too much pressure on them.

Additionally, Vietnam can leverage digital technology to track and allocate individual ownership in large funds. With each citizen having a digital identity, they will know exactly how much they own in companies, roads, bridges, and other public assets.

* Do you have any advice for the Government to start such a new model?

- The government needs to research which model is suitable for Vietnam. As I said, they can look at other existing examples, so there is no need to innovate from scratch. The government also needs to take advantage of the team of domestic and foreign financial experts to build an effective fund management strategy.

One of the key factors for success is to ensure consensus and trust from the people through clear and transparent communication. In addition, the application of technology, such as building digital identity, will help allocate fund benefits accurately and transparently, ensuring that all citizens can track and benefit from the national investment fund.

Like a number of countries in the region, the Vietnamese government and the private sector need to work very closely together. The success of sovereign wealth funds is due to this cooperation.

Help entrepreneurs raise capital easily

Australia is rich because of its savings plans. Their pension funds are savings plans because they invest in stocks, in the growth of the economy. That helps the economy grow very fast and strong. Singapore is the same. The saving habit of Vietnamese people is good.

That means a lot of money is going into the economy through these savings schemes or through sovereign wealth funds, making it easier for entrepreneurs to raise capital, for companies, including state-owned companies, to raise capital, and for infrastructure projects to be built. Savings will drive the economy. That's what happened in Singapore and is happening in Australia.

There are always challenges, but if you don't try, you won't have a chance.

Anything new and ambitious has its challenges. I think the first thing is to design the right model for Vietnam. It is a creative and intellectual challenge, but there are many talented people in Vietnam.

Make sure that the process finds people who truly want to work for the common good, for the prosperity of the Vietnamese people. There may be mistakes along the way, be ready to adjust, and not give up. There will always be challenges, but if we don't try, we will not have the opportunity.

I believe that the new fund is a novel idea but has been successful elsewhere. Vietnam can create its own model that fits its institutions such as universal basic capital, pre-distribution model, truly empower everyone economically, make people participants in the economy.

Source: https://tuoitre.vn/ti-phu-my-de-xuat-quy-dau-tu-moi-o-viet-nam-20250209224153286.htm