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The draft CIL states that foreign investors can set up their
company under the Unified Enterprise Law. The business creation
process is therefore simplified, with the initial capital
requirement removed, which is an improvement on the current FIL.
Some people find this move a bit too liberal because business
creation is no longer tied to the availability of initial
capital, and thus at odds with the national objective of
attracting foreign investment inflows. Many countries in the
region (such as Thailand, Malaysia, Indonesia, Philippines and
China), and even some developed countries, require foreigners to
submit a project proposal and demonstrate adequate financial
capacity, before setting up their enterprise. The MPI advocates
for business simplification because the CIL (as well as the UEL)
is deliberately designed to create a conducive regulatory
environment for all economic sectors, and to comply with
Vietnam's international commitments.
Mr. Pham Manh Dung, Director,
MPI Legal Department, Head of the CIL Drafting Committee
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The main concern of
foreign businesses is that the CIL could slow down economic
growth in Vietnam and be bad for business. For foreign
investors, the CIL will create another layer of bureaucracy,
because foreign investors will already have to get a business
registration certificate, under the UEL. If they build a
factory, they will also have to go to the Ministry of Natural
Resources and Environment to get environmental approval, and
they already have to go to the Ministry of Construction to get
construction permits, and so on. Why should they need to go to
MPI to get an investment license approval? If MPI were to act as
a one-stop-shop, coordinating all those granting investment
approval, that would create a better investment environment. But
if the MPI is just another approval agency, it will create a
worse investment environment. If people who come up with new
business ideas have more trouble starting a business in Vietnam,
they will go elswhere. Of course, the Government should have
some flexibility to restrict things, if it finds that they hurt
the environment or society. But basically, the principle is to
allow people to be creative and entrepreneurial within the
framework of the law. If people were encouraged to think of new
businesses, try them out, and take the risk, the economy would
be more dynamic.
Mr. Fred Burke, Managing Partner,
the Law Offices of Baker & McKenzie
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