The VCCI has recently cooperated with the Ministry of Planning and Investment (MPI) and Star Vietnam to organise a conference to seek delegates’ opinions for the draft circular instructing several contents of investment activities in Vietnam. The circular aims to deal with in the current Investment Law and document related to investment activities.
A representative from the compiling board, Do Nhat Hoang, Vice Head of the MPI’s Legislation Department, said despite the two-year application of the Investment Law, many contents of which need to be revised. "Some 20 contents should be revised”, he said. According to the compiling board’s statistics, up to more than 100 problems of investment activities need to be dealt with. These problems appear not only in the Investment Law but also in laws and decrees of concerned ministries and agencies.
Nguyen Dinh Cung, Head of the Macro-economic Division under the Central Institute for Economic Management (CIEM), contents of the draft circular do not identify the nature of the current difficulties as well as investors’ demand. Moreover, he added, the contents are combined with four laws namely construction, environment, land and investment laws: thus, investment procedures in the circular are still unclear and cumbersome.
A great concern raised in the conference was that the circular needed to specify functions and effectiveness in investment decentralisation. Currently, localities implement decentralisation of investment projects massively, not selecting, assessing and analysing project’s effectiveness. This has caused the massive licensing of golf course projects in recent time.
Associate Prof. Dr. Pham Duy Nghia from the Hanoi National University’s Law Department said that people’s increasing land transfer to investors is a main cause of sharp rise in investment project number with capital worth dozens of billions of USD. The projects quickly bring in environmental pollution in Vietnam.
If limited land and natural resources are handed over to investors, but they are left idle for 5-7 years, or changed hands to other owners, investment-licensing process will be invalid. Therefore, it is important to select investors via considering curriculum vitas and several latest financial statements, especially asking investors to pay a deposit before granting land for them, Nghia said. “Only after receiving the deposit, local authorities mention assessment of environmental impacts or the investment licensing. This will help avoid cases of Fish Fairy project in central Khanh Hoa province or the huge steel Eminence project in northern central Thanh Hoa province"
Representatives from Star Vietnam said that it is needed to have specific regulations on foreign investment: investment by individuals, organisations or enterprises. "Regarding investment registration and appraisal regulated at 55-49 Articles, in the Investment Law, and 42-46 Articles in Decree No.108, we propose the application of the same procedures and conditions for domestically-invested projects and foreign-owned ones with the foreign side accounting for less than 50 per cent of project’s capital. Conditions and procedures applied for foreign-invested projects are also valid to foreign-owned firms, of which, the foreigners hold 51 per cent of the capital and above”.
The circular’s title shows that the circular guides several contents of investment activities in Vietnam. The activities include local and foreign companies’ investments. However, Vu Xuan Tien, General Director of VFAM Vietnam Consulting Company Limited, said the circular’s contents mostly concentrate on instructing foreign investment activities in Vietnam. He wonders whether local investors will not face any difficulties? He asked for investment instructions for local investors or the revision of the circular’s content in line with the title “Guiding several contents of foreign investment activities in Vietnam”.
Also regarding this issue, Lawyer Cao Ba Trung from INCIP Law and Investment Consultancy Co., Ltd, said that under the MPI’s regulations, foreign-invested firms with below 51 per cent of capital owned by the foreign side apply investment conditions for local investors. Meanwhile, foreign-owned businesses with over 51 per cent of capital held by the foreign side apply conditions for foreign investors. Based on the mentioned-above regulations, foreign-invested companies in Vietnam are considered Vietnamese organisations and entrepreneurs. Therefore, considering foreign-invested firms with over 49 per cent of capital kept by foreigners is inappropriate in the aspect of the country’s current laws. Trung suggested having detailed instructions on foreign investors to prevent difficulties for investors.
With the country’s investment attraction over the past time, many experts said Vietnam should not call for investment by any means. The country should urge localities to obey strict principles in choosing foreign-owned projects. Documents guiding the 2005 Investment Law should focus on ways to help carry out the foreign investment policy.
Thoa Nguyen
Vietnamese
