Viet Nam’s new laws on investment and business operations have taken effect. As of July 1, both foreign and domestic investors fall under the governance of the same Enterprise Law and the Investment Law.

The changes under the new laws are more easily seen with foreign investors who can now engage in any sort of business activities not classified as off-limits by the laws. Before that, they were licensed on a case-by-case basis and could only operate as far as their licenses permitted.

Domestic entrepreneurs had enjoyed that right as far back as in 2000 when the former Enterprise Law fostered the birth of thousands of companies overnight.

Nguyen Dinh Cung, one of the authors of the new Enterprise Law, however, warned against expecting a boom in foreign investment and that not all foreign investors liked the liberal change as they would be envious of the newcomers who would not have to go through all kinds of trouble they did to get the investment licenses, especially in the protected industries.

One surprising thing is that the much-awaited decree guiding the implementation of the Investment Law has not been promulgated.

So it might happen that foreign investors would find it easy to set up their companies here but then they will have to wait before they can have their projects screened or registered.

This period is also confusing for local companies that have foreigners as shareholders as the old regulations are no longer valid while the new ones are not ready.

The Government is expected to announce temporary measures, applying current regulations for local companies, except incentives.

On the other hand, there are provisions in the Investment Law that overlap other laws on a wide range of subjects such as land, credit, import-export, advertising, taxation, environmental protection. It has not been clear which ones will prevail in case of inconsistencies.

One more skyscraper

In order to avoid possible criti-cism later on, HCM City authorities ordered its Department of Zoning and Architecture to collect feedback from local architects on a high-rise project right in the heart of the city.

A Korean company plans to build a 54-story building in the September 23 Park to be used as a commercial and residential centre. As expected, architects said such a tall building would destroy the open space here – the rare open space in an already crowded city.

Tall buildings should be surrounding the park and should not be located inside the park. They said such a project would discourage investors from developing the Thu Thiem Peninsular on the other side of the Sai Gon River.

But HCMC City authorities are under pressure to give the project the green light.

They need some US$318 million to build an outer beltway linking Tan Son Nhat Airport to Thu Duc District.

To get the money, they intended to give GS E&C, the Korean developer of the 54-story Saigon Park Tower five lots of land, including the 1.2ha in the September 23 Park, covering a total area of 10 hectares.

So the building would not occupy as much land as the previous project whose owner withdrew because of financial difficulties. In fact, HCM City should not be afraid of high-rises. The issue is whether the zoning of high-rises would yield more space for traffic and pedestrians and create a real metropolitan area.

Small streets, alleys and shops do not always add more beauty to the city, anymore than the narrow sidewalks that can hardly accommodate pedestrians.

Pyramid marketing scheme

HCM City has just suspended the operations of Sinh Loi, a multi-level marketing company, charging it with false registration and other violations.

The operations of multi-level marketing companies have given local authorities headaches for several years now but it is difficult to close them down.

These companies often sell unique kinds of goods, many times over their real value and in order to lure buyers, they pay many levels of salespeople huge commissions from the money of newcomers like in a pyramid scheme.

First of all, it is difficult to refuse granting business licences to these companies because their mode of operations is similar to direct sale companies, a legitimate form of business.

The only difference here is that participants in a multi-level marketing scheme have to buy products for themselves before they can enjoy commissions from future sales.

It is also difficult to stop people from joining this vicious circle where a salesperson might have to sell to relatives in order to be in the game because unemployed people find it an attractive opportunity to earn quick money.

As their operations grow, each company might attract as many as 30,000-40,000 participants, and when they have not recouped their "investments", they might protest any investigation that threatens their chances.

It seems that Decree 110 governing the operations of multi-level marketing companies is not enough to prevent them from doing harms to thousands of families. Viet Nam can learn similar lessons from other developing countries and enact a law that would facilitate legitimate direct sales companies and stop frauds by others.

Regulating educational ads

HCM City has ruled that private education establishments wanting to advertise their services should seek permission first from the local Department of Education and Training.

This is a response to the situation that many such advertisements provide misleading information, making it hard for learners to select the service they really need.

Advertising for education services accounts for the largest percentage of ad revenues of local newspapers. And in order to attract learners, schools and centres waste no time in giving themselves impressive epithets like "international", "world-renowned".

They use promises that are hard to enforce like "money back if learners do not pass the entrance examinations" or "attractive, high-paying jobs available upon graduation".

Some private schools that offer short courses are concerned that it will take more time for their ads to be approved, as they have to change the ad content regularly.

Others say while advertisers should be held responsible for false ads, only those with violations should be screened, and not all.

In a situation where lack of information makes it hard to distinguish between good schools and bad ones, the screening of ad content can prevent schools from falsely boasting that their faculties consist of qualified foreign teachers, that their degrees are recognised worldwide, or that learners can speak English within three months! The extra time good schools spend on getting their ads approved is worth it when learners have more reasons to trust their content.