Draft Amendment to Vietnam’s Investment Law Seeks to Improve Business Environment
HANOI – During a recent meeting organized by Vietnam’s Ministry of Planning and Investment, discussions focused on draft amendments to the country’s Investment Law in order to “improve the investment environment and increase benefits for investors and businesses.”
The revision process of the Investment Law is part of the National Assembly’s 2014 program to build more efficient laws and ordinances.
According to Deputy Minister of Planning and Investment, Dang Huy Dong, while the Investment Law has had a positive effect on the business environment in Vietnam, there were certain parts of the law that needed revising.
These inadequacies include:
- The areas encouraged under the Law are inconsistent and not focused on attracting high quality investment projects;
- Investment procedures and project implementation regulations are still too complicated.
One key area of confusion in the original Investment Law centered on what the definition of a foreign owned enterprise consisted of. During the drafting process, it was decided that the capital ratio of foreign investors in an enterprise would have to be made much more specific so that it can be clearly determined whether or not an enterprise is foreign owned.
Also present at the meeting was a representative from the Vietnam National Oil and Gas Group who stated that there are a variety of problems that crop up during the stages of business investment and during the granting of an investment certificate. He called for these problems to be fixed immediately.
According to a recent government survey, investors must currently go through an average of 18 procedures related to land, construction, and implementation conditions before they can execute an investment project. Land allocation and construction formalities also remain a problem.
The draft amendment also recommends the principle of equal treatment between domestic and foreign investors with regards to investment fields and incentives.
In dealing with these drawbacks of the original law, Mr. Dong stated that the main goals of the draft amendments were to:
- Perfect mechanisms and policies;
- Create a clear legal framework;
- Create strong transition procedures in the implementation of investment projects;
- Resolve the difficulties in investing activities for enterprises;
- Improve the effectiveness and efficiency of the state management of investment activities;
- Create a legal basis to consolidate and strengthen incentives;
- Protect foreign investment;
- Expand autonomy for investors;
- Improve the investment environment by making it more transparent; and
- Increase benefits for investors and businesses.
The next step in the amendment process will take place in the near future when the country’s lawmakers gather to approve the draft as part of the government’s plan to continue improving the business environment in Vietnam.
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