An array of sweeping amendments to the current Law on Investment should be made to leverage foreign investment inflows into Vietnam, insiders have suggested.

FDI firms act as a catalyst to Vietnam's economic development and integration into an ever-globalizing world.

Vu Dai Thang, Deputy Minister of Planning and Investment, pointed out the mixed results that the Law on Enterprises and the Law on Investment have created, in spite of the number of new enterprises jumping 70 per cent over three years since the laws came into effect.

Despite this jump, there remains many bottlenecks in the implementation of the Law on Investment, Thang complained. He said that drastic amendments to the law are needed to help it bring about wider benefits.

According to Thang, one of the main shortcomings hindering the effective implementation of the Law on Investment is that the legislation does not explicitly define the concept, purpose, legal value, and scope of procedures. With unclear legislation, it therefore becomes more challenging to meet requirements necessary to grant in-principle approval to different investment projects.

The Law on Investment does not note any specific regulations that allow power to be decentralised to different-level authorities for their in-principle approval of investment projects in conformity with administrative reforms.

Many regulations of the two laws overlap with those of other sectoral laws. So far, there has been no specific assessment made on how the overlapped clauses influence the performance of businesses.

Thus, sustained efforts must be made to scrutinize, amend, and supplement regulations of the current Law on Investment regarding sectoral operations as well as investment and business activities. The main aim is to eliminate barriers to investment and business operations, thereby facilitating the market entry of enterprises.

Nguyen Van Toan, Vice Chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE), underscored the importance of reviewing and adding to regulations stipulated in the Law on Investment. He added that it is vital to develop giant corporations capable of taking the lead in the fields in which they operate in.

Toan claimed there are too few prestigious domestic firms as their core values and branding are not strong enough to go global.

He called for fundamental amendments to the Law on Investment along with changes to the foreign investment attraction policy.

The foreign-invested sector has been making considerable contributions to the country’s economic growth over the past few decades as the Government has underlined foreign-invested firms as an integral part of the national economy.

FDI enterprises act as a catalyst to the country’s economic development and integration into an ever-globalizing world, Toan declared.

He embraced his hard-line stance that a cautious approach is needed to outline and select foreign-invested projects.

The Politburo has been trying to map out a resolution on foreign investment attraction in the new stage, he noted, stressing this as a positive move.

He pointed out a major shortcoming in FDI attraction that Vietnam has failed to lure high-tech projects financed by investors from developed countries, such as the United States and those from the EU.

Hence, Toan proposed the resolution compiling board should introduce changes in foreign investment policies in order to attract high-tech FDI projects that nurture alliances between domestic enterprises and foreign investors.

This could help Vietnam overcome the FDI shortcomings and tap into the country’s advantages in attracting future foreign investments, the VAFIE vice chairman noted.

VOV