Foreign investors doing businesses in Vietnam through major capital contribution or establishing a company should be given the same treatment as its domestic peers, according to the Vietnam Association of Financial Investors (VAFI) as reported by local media.

This was part of VAFI’s recommendations submitted to Minister of Planning and Investment Nguyen Chi Dung on March 18 with regard to the ongoing drafting process of the revised Business and Investment laws. 

According to VAFI, unless major changes are made, both draft laws are considered of low feasibility and lack of practical benefits for the business community and the economy as a whole. 

International experiences have showed that a fair treatment given to both foreign and domestic investors could facilitate investment capital from foreign companies to Vietnam, stated VAFI. 

This would have a positive benefits on the stock market and the development of Vietnam’s small and medium enterprises. 

VAFI also requested the removal of foreign ownership cap for conditional business lines. 

The objective of setting conditions for business operations or investment activities is meant to serve the purpose of state management, not a barrier restricting investment capital and technologies from foreign investors, stated VAFI. 

As a result, enterprises in some conditional business fields face difficulties searching for strategic investors and investment capital. VAFI considered this one of the main reasons delaying the reclassification of Vietnam’s stock market to secondary emerging. 

Moreover, VAFI recommended the prime minister release a list of fields not open to foreign investment, due to national security issues. 

With regard to the state sector, VAFI said there should be a new definition for state-owned enterprises (SOEs). As such, SOEs should be those enterprises with the state holding a dominating stake, having shares listed on the stock exchange, and subject to the portfolio of companies that the state needs to control. SOEs should operate in fields that others economic components are incapable of or not interested in. 

There should only be a handful of SOEs wholly owned by the state, while the remaining must be subject to privatization, divestment and share listing  on the stock exchange. 

A speedy privatization process of SOEs and their subsequent listing would attract some US$100 billion of investment capital from foreign investors, VAFI concluded. 

Hanoitimes