The Common Investment Law and the decree guiding the implementation of the law both mention the list of conditional investment fields. However, investors cannot find information about the detailed conditions for every investment field there, and have to check for information under other specific laws. To date, the document which stipulates the detailed conditions for conditional investment fields has not been promulgated yet.

Tran Hao Hung, Deputy Director of the Legal Department under MPI, said that the lack of such a document made the legal framework on investment less transparent, while investors do not have enough confidence in the effectiveness of laws.

The commitments relating to the opening of the service market have become valid. However, as there has been no guiding document, local authorities still find it hard to implement. Different authorities have different understandings of the same provision of the commitments, causing inconsistency in attracting and licencing investment projects.

Local authorities still do not know how to deal with investment projects registered to operate in many fields of services which have various levels of market opening. Moroever, problems have arisen when investors have bought stakes of enterprises operating in many fields which have different regulations about foreign ownership ratio. Local authorities also do not know what to do in the cases where there are contradictions between WTO commitments and other bilateral treaties of which Vietnam is a member.

According to Mr Hung, in most cases, local authorities have to choose a ‘safer’ solution by refusing licencing investment, or asking investors to wait, while they try to request instructions from higher levels.

However, the problems will be tackled when the decree guiding the implementation of several WTO commitments, now being compiled by MPI, is promulgated, Mr Hung said.

Highest possible investment incentives to be applied

Mr Hung said that the decree would ensure the strict implementation of Vietnam’s commitments. However, the commitments will be applied in a flexible way that can both ensure the observation of the commitments and help attract foreign investment into Vietnam.

Vietnam will not take full advantage of the limits on market access if this hinders the development and healthy competition of local industries.

Mr Hung said that there was a principle that compilers followed when drafting the decree, which was that the decree must ensure a stable investment environment and the new regulations must not affect the benefits of operational enterprises. The measures to be applied to implement WTO commitments must not bring less attractive investment incentives to investors.

Regarding points of conflict between WTO commitments and other treaties, Mr Hung said that investors would have the right to choose the regulations that most benefit them.

MPI’s statement has, once again, confirmed Vietnam’s vow that the country will offer the highest possible investment incentives to investors. The commitments Vietnam made when joining the WTO should be understood as the minimum, not maximum commitments. Vietnam will allow trade liberalisation at higher levels than the ones it has committed if this benefits the nation.

Source:  VietnamNet