COLUMN ONE : Call Them Returned Boat People : Refugees who fled communism and poverty are being lured to Vietnam by old ties and new chances to make money. As expatriates, they’re doing business despite the U.S. trade embargo.

When Qui returned here from America three years ago to visit his mother, he was surprised at how hard it was to get a drink of water.

The water from the tap was polluted. Bottled water had to be imported from places like France and was prohibitively expensive. So before Qui’s vacation was over, he was making plans to become Vietnam’s first producer of designer water.

“Bottled water was very big business back in the States,” the former tennis pro recalled. “I thought, ‘Why not here?’ ”

Thus was born Aquapure, a company now selling 120,000 bottles of mineral water a month using a well dug by the U.S. Navy at the port of Cam Ranh Bay. Business is so good that sales are doubling every six months.

But what sets Qui apart from the droves of other budding entrepreneurs in Vietnam is that he is an American citizen. Qui fled Saigon--now renamed Ho Chi Minh City--as North Vietnamese tanks rolled into the South Vietnamese capital in April, 1975, by hijacking a ship and sailing out of port. He eventually settled in the United States, where he built tennis courts.

Call it the return of the boat people.

Two decades after hundreds of thousands of Vietnamese began an exodus from communism and poverty, an increasing number of overseas Vietnamese are trickling back to their homeland to set up businesses and take up long-term residence, living in a gray area between being Vietnamese citizens and being expatriates.

The lure to the overseas Vietnamese is a chance to participate in one of the world’s fastest-growing economies, thanks to a market reform program adopted by the ruling Communist Party in Hanoi in December, 1986. Many Vietnamese in places like Southern California and Australia also are escaping economies mired in recession for a country frequently described as the next Asian growth “tiger.”

In the last year and a half, the government has opened its arms to welcome home overseas Vietnamese, known as the viet kieu, with an implicit pledge to let bygones be bygones--so long as they don’t engage in politics or anti-government activities.

For the hundreds of thousands of Vietnamese who fled South Vietnam to places in the United States, the uncertainty of returning to Vietnam under Communist rule is compounded by the fact that doing business here is still illegal under the Trading With the Enemy Act, an embargo prohibiting American citizens from doing anything more substantial than opening offices and renting a house.

But it has not deterred hundreds of viet kieu (literally, “overseas Vietnamese”) from coming back anyway, though nearly all those interviewed indicated they did not wish to be identified fully.

The return of overseas Vietnamese is “a phenomenon,” said Dr. Co Pham, president of the Vietnamese Chamber of Commerce, which represents hundreds of Vietnamese and Vietnamese-American-owned businesses in Orange County’s Little Saigon.

“When we arrived in the United States, we learned about entrepreneurship, U.S. technology and how to improve conditions such as in Vietnam, which is a developing country and (where) things are still primitive,” he said.

“As a chamber of commerce, we see a lot of opportunities that can open up when the economic ties are sanctioned,” Pham said, adding that merchants have begun exporting everything from T-shirts to computer equipment--some of it illegally--to Vietnam.

Le Van Loc, deputy chief of Ho Chi Minh City’s committee for overseas Vietnamese, noted in an interview that the number of viet kieu returning for visits increased from 41,875 in 1990 to 90,127 last year. While only 90 of them applied to stay permanently and give up their foreign passports, many managed to remain for long periods.

Overseas Vietnamese normally get a three-month visa, which is renewable three times; investors get one-year visas automatically.

So far, the Hanoi government has approved 36 investment projects worth $72 million from overseas Vietnamese. In addition, overseas Vietnamese annually send to their homeland about $400 million. But there are other investments, made in cash through relatives in Vietnam, that are not recorded.

One of the early successes is Thanh Hoang Nguyen, who escaped Vietnam on a boat in 1981 and settled in Australia. Nguyen worked in a rubber factory while attending night school. Now he owns three restaurants in Sydney.

Nguyen returned in 1990 to visit relatives and was intrigued by the possibilities. Three years later, he owns the Norfolk Hotel here, a 47-room boutique hotel that is a hit with expatriate visitors. With two Australian partners, Nguyen has started projects to build a 63-room addition to the hotel and an office complex not far away.

“Vietnamese have a distinct advantage here because we have no communications problems,” Nguyen said in English with a twangy Australian accent. “It’s not easy to do business here.”

Nguyen travels frequently between Vietnam and Australia, squeezing in time to manage his projects. When he advertised for 100 workers recently in Vietnam, he had 1,500 applicants.

Chang Hui left by boat in 1978 after serving two years in a Communist re-education camp because he had been an officer in the South Vietnamese army. He returned from the United States in April, 1990, and is registered with the U.S. Treasury Department to open a representative office until the embargo is lifted.

“People love to see American products back in Vietnam,” Hui said, gesturing to the engines manufactured by a Midwestern company, Kohler Inc., in his showroom. “So far, they’ve treated us very well. As long as you don’t get involved in politics, you don’t have any problems.”

Like many viet kieu, Hui is bothered by the bureaucracy and corruption he is finding in his homeland, which was also corrupt well before 1975. But he was surprised to find that many of his connections in the ethnic Chinese community still work.

At least 50 businesses operated by viet kieu have been closed by Ho Chi Minh City authorities recently because they had no permission from the Vietnamese government to operate, Loc said.

The latest example was Vinamoto, a Huntington Beach-based educational firm fined $5,000. Vinamoto’s offices in Ho Chi Minh City were closed when a reporter dropped by recently, and its telephone in Huntington Beach was disconnected.

Vinamoto apparently did have permission from the U.S. Treasury Department to work in Vietnam, but many other firms simply don’t bother to get it, and local officials turn a blind eye.

Raymond, as he asked to be called, came back from the United States three years ago and has embarked on building a major office complex called Starford Development, despite the embargo. He even brought his 24-year-old son over from the United States to work as a foreman on the project.

“In the States now, it’s very difficult to find work because of the recession,” he said. “But it’s still very risky here.”

Raymond mentioned a complaint frequently heard among the overseas Vietnamese: They are forbidden to own property in Vietnam by the Vietnamese government. As a result, they must either rent an apartment, which for foreigners can cost around $4,000 a month, or move in with in-laws who stayed behind, which can be draining.

“Vietnamese are very attached to the land,” observed John Brinsden, the Vietnam manager for Standard Chartered Bank. “The viet kieu is never sure how he’s going to be accepted or what his family’s attitude will be.”

Qui, the general manager of Aquapure, noted that his business would not be breaking even if he hadn’t moved in with his mother and operated the company from her house at no rent. Even so, he has mixed views about returning to do business here. He was cheated by his first distributor in Ho Chi Minh City and lost $30,000.

“You can’t trust anybody when you come home,” he said.

Mai Cong, president of the Vietnamese Community of Orange County, a nonprofit support center, said that would-be entrepreneurs from Southern California also have met resistance in Vietnam from authorities who cheat them and confiscate goods.

Despite such incidents, interest in Vietnamese business remains strong, she said. Cong said she knows of local business people who have gone back to Vietnam to sell cosmetics, inexpensive fabrics and even holiday chocolates for the Christmas season.

Do Ngoc Yen--editor and publisher of the Nguoi Viet newspaper in Westminster, one of the largest Vietnamese dailies in Southern California--and other businessmen estimated that if a poll was taken, it would probably show that half of the business owners in Orange County’s Little Saigon have visited Vietnam recently. But because of old hatreds toward the Vietnamese Communist government, they do not want to talk openly about it.

In Vietnam, Allan, another viet kieu, worked as a food and beverage manager at a hotel in Long Beach before he returned in 1989. When he came back, he helped his family open a succession of popular restaurants in Ho Chi Minh City, teaching them how to make a bacon cheeseburger and properly cook fettuccine.

“It is exciting here,” Allan said, seated at his family’s Vietnam House, one of the newest and best restaurants in the city. “Saigon is the pearl of opportunity.”

Because of a succession of new taxes, such as business levies and a 50% capital gains tax on profits from the sales of property, Allan has become more of a consultant and a trader while selling off business interests in Vietnam.

Allan hasn’t been back to the United States in three years. He lives with his wife in her parents’ apartment in Ho Chi Minh City while sending their 14-year-old son, who is used to the American school system, to boarding school in Singapore.

But like many overseas Vietnamese, Allan said he would never dream of giving up his American citizenship to become a Vietnamese citizen again, even if it would enable him to own land and make more money. “I’m happy with the way things are now,” he said. “I consider it a privilege to be an American citizen. But you cannot forget where you were born.”

Times staff writers David Reyes and Eric Lichtblau in Orange County contributed to this report.