Decree 108/2006/ND-CP has been issued to guide the implementation of the Investment Law. Tell us about its provisions.

Decree 108 is indispensable for implementing the law and includes provisions on Build-Operate-Transfer (BOT), Build and Transfer (BT) and Build-Transfer-Operate (BTO) contracts, as well as overseas investment and other issues.

To craft the decree, the Ministry of Planning and Investment co-ordinated with relevant ministries and collected feedback from foreign and domestic enterprises, lawyers, experts and organisations.

What are key regulations in favour of investors?

The most significant rule is decentralisation in granting investment licences in a bid to streamline administrative procedures.

The MPI previously appraised and granted investment licences and only empowered local authorities at a modest level. Over the past 20 years, decentralisation was kept limited and provinces were only permitted to license foreign-invested projects of less than US$5 million.

In 2000, Ha Noi and HCM City were authorised to licence $15 million projects.

A breakthrough in the current decree is that most projects, even large ones, can be licensed by provincial authorities. The move looks to improve the responsibility of provincial People’s Committees for administering investment activities and to implement the "one-stop shop" policy more effectively.

The MPI will be able to focus on its original tasks: devising macro policies, providing information and investment trend prediction; and auditing investment activities. Processes for a project requiring approval from the Government have also been simplified. According to the current decree, the Prime Minister merely considers if projects are suitable to master plans of industries and then evaluates impacts of the projects and makes final decision.

One of the hot issues attracting the interest of policymakers is to reconsider conditional investment areas. What are the new rules?

In the new decree, areas in which foreign investment is conditional are more specifically and clearly regulated.

A list of 14 conditional areas conforms with Viet Nam’s international commitments.

For "sensitive" spheres, the Government has outlined foundational or basic commitments rather than specific conditions. In the future, the Government will rely on the adaptative capacity of the Vietnamese economy and macro-economic governance in considering whether to open specific areas up for investors.

What are the steps needed to put the decree into practice?

The decree is a preliminary and important step to enforce the Law on Investment. It is essential to set up a board to realise the Law on investment and the Law on Enterprises as well. It is also necessary to improve local authorities’ qualifications to ensure that they will be able to grant licences to investors appropriately and effectively

Source: VietnamNews