VN amends investment law to boost efficiency

The amended Law on Investment will have regulations for the strict management of projects with large amounts of registered capital, according to Deputy Minister of Planning and Investment Nguyen Chi Dung.

Dung noted that after eight years of implementing the existing Law on Investment, the law still has many weak points, including regulations on investment conditions, procedures, incentives and support, which have not ensured transparency or fulfilled its potential, reported Dau tu (Vietnam Investment Review) newspaper.

"According to foreign-invested enterprises, legal systems and administrative procedures in Viet Nam have not met the expectations of foreign investors." Deputy Minister of Planning and Investment Nguyen Chi Dung said

Moreover, the existing law has been not yet incorporated Viet Nam's commitment to investment activities under international agreements, including commitments with the World Trade Organisation, Dung said at the meeting of the National Assembly's Economic Commission on Saturday, which was held to elicit opinions on the amended Law on Investment.

Due to these limitations, foreign investors do not find the investment environment in Viet Nam appealing, especially at the present time when there is a lot of competition among regional countries to attract foreign investment.

According to foreign-invested enterprises, legal systems and administrative procedures in Viet Nam have not met the expectations of foreign investors, he stated.

Additionally, the process of restructuring the economy and changing the model for economic growth requires the state to establish legal mechanisms and systems for adopting new policies.

Participants at the meeting agreed to amend the existing investment law to upgrade administrative procedures and improve efficiency in the state management of investment activities.

The amendment of the investment law is expected to limit situations where unfair advantage can be taken of gaps in the law to seek profit, including similar situations with virtual investments.

In fact, the state offices could not control the real capital that foreign investors put into their projects. There were some projects that needed capital of US$50 million each, but investors registered capital of hundreds of millions of US dollars, Dung noted. Viet Nam granted licenses to these projects, but the nation could not collect tax from them due to the provision of incentives for projects with large-scale investment.

Mai Xuan Hung, deputy chairman of the National Assembly's Economic Commission, said the amendment of the law would provide an incentive to enterprises at home and abroad to increase their investment in production and businesses in Viet Nam and would also manage the situation of virtual investment and investment brokerage through the plan.