Investment Attractiveness Decreased

Facing economic uncertainties such as inflation, exchange rate and interest rate, the business environment in Vietnam has the "problem" that foreign companies are concerned about. However, there are limitations that have existed so long that if there is no effective solution, the investment attractiveness of Vietnam’s markets will be significantly reduced. Vietnam Business Forum has recorded the opinions of representatives of the Foreign Invested Enterprise Association in Vietnam in the early months of 2011.

 

The key importance of improving the infrastructure of Vietnam has been mentioned quite a lot by AmCham and other business associations. However, there are still inadequacies and serious delays in the development of key infrastructure projects, including road connectivity, electricity, ports in strategic positions with associated infrastructure systems, as well as urban public transit such as light rail.

 

We all know the limitations of infrastructure in Vietnam as a threat for investment in the current situation and the future in the export sector and production. Many potential investors from the US think that poor infrastructure and logistics deficiencies are a major obstacle for business investment decisions (or business expansion) in Vietnam, which is also a major obstacle to building the integrated supply chain that Vietnam needs to obtain a competitive advantage.

 

Clearance is still a challenging experience, with the subscribers to extract the unofficial payments to customs official’s to perform their tasks – otherwise they must accept the risk of delayed settlement procedures and release of goods. This issue affects all foreign and domestic enterprises.

 

We hope the Government continues to implement e-customs procedures (With the aim of reducing to a minimum the possibilities for corruption) and also consider whether the charges are legitimate, to make customs officials provide more effective services and treatment.

 

In addition to the customs procedures, opportunities for corruption continue to be a problem when investors have to obtain licenses and acceptance from Government agencies, and we expect the Government to continue the efforts in solving their problems.

 

We are also concerned that current measures to restrict imports of mobile phones, cosmetics and alcohol may create many more opportunities for Customs to have unofficial payments from the import these products.

 

The provincial tax agencies are not consistent with each other in the terms of tax, reflecting inconsistencies in the application tax laws. Vietnam Government should consider the cases of taxpayers who do not agree with the tax level required by the local agency.

 

This allows taxpayers to find the right solution for their case (and ultimately, prevent corruption in the local tax office). These decisions should be subject to the deliberate resolution as a basis for future cases. Thus, Vietnam will be able to develop a richer source of case law.

 

Investment Law and Enterprise Law and the enforcement of these two often treat foreign investors and domestic equally. However, discrimination still exists in some licensing procedures: foreign investors investing in Vietnam first establish whether the enterprise is formed from 100 percent foreign capital or joint venture companies (regardless of foreign ownership) and will be required "investment certificates" used simultaneously for both the licensing of investment projects and "Business Registration Certificate." On the other hand, except for large-scale projects or investment conditions, domestic investors often require only a "business registration certificate." In other words, there exist two types of licensing procedures for domestic and foreign investors.