A temporary set of regulations detailing the newly enacted Investment Law is expected to rid new investment projects of the current deadlock caused by the absence of formal sub-law guidance.

The Ministry of Planning and Investment (MPI) last week submitted the proposed regulations to the Prime Minister and is expecting to get the green light soon to be able to provide detailed legal guidance on approving investment projects to its departments, provincial authorities and industrial zone administrators.
The regulations have only been recently devised because the required decrees to guide the implementation of the Investment Law, in effect from July 1, 2006, were still in the consultation process or pending government approval.
“Those regulations will be applicable in the near future, providing a line of principles [for approving projects],” said Pham Manh Dung, director of the MPI’s Legislative Department.
He also heads the team responsible for compiling the implementation decree for the Investment Law.
A primary principle of the regulations, Dung said, will allow authorities to give immediate approval to investment projects, that are obviously in line with the spirit and stipulations of the Investment Law, without having to wait for more detailed guidance.
However, the proposed regulations divide bodies able to grant investment certificates into three levels, including the prime minister, the MPI, and the provincial people’s committees and industrial zone authorities, with the last being authorised to approve projects capitalised at below VND800 billion and not belonging to a specified range.
Concerning projects with blueprints sent to authorities before and still pending approval, they will be considered in light of the spirit of the new law and developers will be required to submit supplemental papers if necessary before being granted an investment certificate, Dung said.
“The biggest problem now relates to procedures,” said Dung.
He anticipated that roughly 98 per cent of domestic investment projects would not face procedural issues because they were mostly capitalised below VND15bn and did not fall under the conditional investment list.
“Right now we haven’t seen any domestic investment projects worth over VND300bn submitted,” he said.
According to the proposed rules, such projects will have to undergo an appraisal process, whereas other projects below this amount only need to register for investment.
Investment and legal experts have said the temporary regulations will help central and provincial level authorities to overcome the increasing number of project applications by foreign investors.

The regulations will also help tackle the current ‘wait-and-see’ approach by many foreign investors.

“It is very risky to have a new law in place without implementation guiding documents because all parties do not know which law they should follow in this transition process, let alone the many business opportunities that have been lost,” said Nguyen Hoang Hai, secretary general of Vietnam Association of Financial Investors.
“There are many projects that cannot be established at this moment, including domestic and foreign investment, because they are still waiting for official guidance,” he added.
Cao Minh Truc, chairwoman of the consultancy firm, Business Support Services Co. Ltd., is also facing difficulties in consulting her clients who are foreign investors.
Yet, she said, in anticipation of the current issues involving the absent implementation decrees for the Investment Law, she has advised investors seeking to set up new projects to wait for a while.
“But the delay should be only acceptable if it takes between three to six months. I will be very happy if the guiding decrees are issued in late August,” she said.
Several legal consultants have complained that they do not know how to answer their clients’ queries about the investment procedures applicable in Vietnam now. Some have described this time as an “empty room” in Vietnam’s investment attraction activities.
The draft implementation decree for the Investment Law was submitted to the government table in late May, but it still requires more consultation from the business community.
The latest consultative meeting was held last week in Hanoi by the Prime Minister’s Research Committee with support from the UNDP and the MPDF. The meeting still heard strong objection from various research institutions and business associations.
MPI’s Pham Manh Dung explained that further consultation was required to make the decree adapt to Vietnam’s commitments to the WTO rules.
Another draft decree guiding the re-registration of foreign invested enterprises is still pending, awaiting prime ministerial approval.

Source: www.vir.com.vn