Investment Fields should be Expanded for Fairer Competition

Investment Fields should be Expanded for Fairer Competition

With a system of existing investment laws, the Vietnamese investment environment has improved greatly. However, many weaknesses have been exposed during the implementation of these laws. These include a lack of uniqueness and the discrimination among economic sectors, not to mention protection and monopoly. Therefore, it is now an urgent task to issue a unique investment law, which can create transparency of the investment and business laws and remove barriers in accordance with the integration process's requirement.

In the previous year, decision making was a close circle, so that the Ministry of Planning and Investment recently co-operated with the Vietnam Chamber of Commerce and Industry (VCCI) to organise a seminar to collect ideas and inputs before issuing the draft Investment Law which was a real breakthrough. Enterprises will continue to contribute their inputs and comments to the draft after it is completed.

Pham Manh Dung, head of the Legal Department at the Ministry of Planning and Investment and head of the law drafting board, introduced some scopes of adjustments within the Investment Law in relations with the existing system of laws. Accordingly, in relation with the Enterprise Law, the Investment Law will stipulate fields for investment bans or restrictions for all economic sectors with some exceptions applied for foreign investment alone. Also, the law will stipulate fields of investment encouragement for all economic sectors and procedures for getting licences, investment priorities and the examination and settlement of investment-related disputes.

Regarding fields for investment bans or restrictions, many people raised the idea of creating a common playground for enterprises in some activities monopolised by the State, such as media and television broadcasters. These people affirmed the unfair competition between television and enterprises when game shows earned television broadcasters big profits, yet there is no single regulation on tax imposed on these game shows. Tran Vu Hai, director of the Hanoi Legal Company, raised a question regarding why Vietnamese enterprises were not allowed to join the field even when publications, television shows and websites of foreign countries reached the Vietnamese public without any effective prevention measures.

Also talking on this issue, Huynh Long, director of the Minh Long Company, proposed the Investment Law to stipulate which agencies and organisations could prevent enterprises from making their investment. He said that when his company planned to open an affiliate company specialising in friend making, but this business has not yet been put into a list for tax collection, so taxation agencies refused to give the company tax code, so it was unable to operate. Long concluded that the taxation services took part in investment prevention.

Also, contributing inputs and comments to the building of the draft law, Le Diem at the Association of Small and Medium-sized Rural Enterprise said that the Investment Law should include terms about domestic investment encouragement, not foreign investment.

Concerning priorities, the Investment Law will be built based on investment activities and investment priority should gain effectiveness in terms of costs by reducing the difference in allocation of resources and administrative costs and consequences. Priorities should avoid discrimination based on ownership. Regarding tax priority, Dung stressed that tax was a consequence of priority policies, priorities were not in tax and they were seen from a more specific point of view.

The Investment Law will be able to avoid an overlapping with some existing legal documents. However, the drafting board will build the law on a basis of matching international regulations, avoiding discrimination and offering most favourable conditions for investors. Therefore, Dung said that existing legal documents would be amended, if necessary, to avoid conflicts with the Investment Law.

• Nguyen Thoa