The State budget revenue may reach US$100 billion in the next 15 years if the Government takes drastic measures to reform State-run enterprises and create a level playing field for foreign enterprises, according to the Vietnam Association of Financial Investors (VAFI).

An employee works at a foreign-invested enterprise in Vietnam

VAFI has sent its suggestions to the prime minister on the draft law amending and supplementing several articles of the 2014 Investment and Enterprise laws.

According to the association, the draft law does not feature specific goals to boost economic development or to benefit the business community.

It is needed to redefine the term “State-owned enterprise”. A firm is considered State-owned if it has State capital and specializes in sectors mandated by the State.

Members of the board of directors and supervisory boards of State-owned enterprises and firms holding State capital, who fail to fulfill their duties, should be dismissed from their posts without requiring the approval of the competent agencies.

Additionally, the two laws should be amended in line with international practices to attract capital and technologies from foreign investors, boost the development of the local business community and the stock market.

The amendments should encourage the shareholder restructuring in public enterprises. Accordingly, the proportion of State capital and the capital of individuals should be reduced, while that of organizations and strategic investors should be increased, to help these firms develop strong financial capacity and gradually reduce their dependence on bank loans.

VAFI also proposed that foreign investors establishing firms in Vietnam or acquiring stakes in local firms should be treated like their domestic peers, with regard to establishment, business registration and project execution procedures.

The foreign ownership limit should be applied to certain sectors regulated by the Government. The association suggested abolishing some 80% of conditional business lines limiting the ownership of foreign investors.

SGT