Unified Enterprise Law to Facilitate Foreign Investment

Unified Enterprise Law to Facilitate Foreign Investment

So far the enterprise law has been improved with 1999 law, 2003 law (amended), foreign investment law and series of decrees and guidance. However, it is increasingly incompatible with economic development and integration.

The existing law is divided with different applications to economic sectors and discrimination in ownership. While formalities for local enterprises are simplified those for foreign invested enterprises remain complicated and unpredictable. They discourage potential investors and create loopholes for corruption. Foreign investors can only operate in licensed areas and without a favourable investment environment.

Separate laws with weaknesses

The foreign investment law and decree for implementation are complicated in formalities and inconsistent in substance. Other forms of companies are without distinct provisions  on rights and obligations of shareholders, management, ownership and status of the management board. Those problems of the legal framework and of specific laws have weakened the competitiveness of Vietnam and failed to meet the demand of economic development and international integration.

Unified enterprise law facilitates foreign investment

According to economists, the unified enterprise law will improve the market mechanism and promote efficient and sustainable economic development. It will reduce and eventually eliminate the discrimination between local and foreign investors, accelerate economic integration and increase export and foreign investment. To this end, Vietnam will make the legal framework compatible with WTO membership and international economic integration. The unified enterprise law will be a turning point creating equal and favourable opportunities for foreign investors.

• Lan Anh