A proposed new investment law in Vietnam contains a large number of rules that will thwart investment and antagonise the country’s business climate, economic experts and entrepreneurs have warned. Speaking at a seminar Saturday August 13 in Hanoi, they said the draft Investment Law contained a slew of complicated regulations that would “increase unnecessary business licenses” and make investment tortuous.
The seminar was hosted by the Ministry of Planning and Investment (MPI), the MPI’s Central Institute for Economic Management and the Hanoi Young Business Association to discuss investment and business laws proposed to be enacted.
The Investment Law has been drawn up by the MPI to replace the existing Investment Promotion Law.
The experts said the new law had up to 10 limitations or retrograde steps when compared with the Domestic Investment Encouragement Law. Among them were rules sharply increasing the number of unnecessary business licenses, Nguyen Hoang Hai, secretary general of the Vietnam Association of Financial Investors (Vafi), warned.
For example, he said, the bill required projects with an investment of 5-300 billion dong (US$315,000-18.9 million) to fulfill many old formalities and a new one to be approved. In addition, large projects with capital of over 1.5 trillion dong need to be approved by the MPI and even the government office, he said.
The delegates said these were all newfangled rules that the Domestic Investment Encouragement Law did not have and they would complicate administrative procedures, affecting the business climate. “It is hard to believe that a company has to apply for up to four licenses to put up an outdoor billboard,” Vu Duy Thai, Vafi vice chair, said. “The number of needless licenses is rising and what worries us is the new law will see them increase further.”
The delegates also complained that while a lot needed to be done to create a proper legal framework for companies to operate, the bill did not address the issue. Its definitions of forms of investment were inadequate, they pointed out.