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Some people complain
that the classification of projects into four categories is too
complex. I don't think this is true. If you look at the draft
CIL in detail, you will find simplified procedures. The
classification of projects (ordinary, conditional ordinary,
important and nationally important) will make the investment
management process more transparent. It will clearly state that
important projects with implications on the environment and
population relocation will need to be appraised. The appraisal
process will also be simplified, focusing on the environmental
impacts of projects. For private projects, investors are
responsible for their own economic and financial feasibility.
For projects using state funds for business purposes, the State
conducts an appraisal, prior to the investment decision, so as
to avoid waste and inefficiency. However, the appraisal,
licensing, and decision-making process will be decentralized
into the hands of Ministries and localities.
Investment procedures will be simplified, as most investment
projects will fall under the category of “ordinary projects”,
for which investors will only need to apply for an investment
registration certificate. A limited number of projects
(including conditional ordinary projects, important projects,
and very few nationally-important projects) will require
appraisal, prior to issuance of an investment license. In
particular, ordinary projects by domestic investors, who do not
apply for investment incentives and require capital of less than
VND 5 billion, will not need investment certificates, as they
will only need to register their investment.
Mr. Pham Manh Dung, Director,
MPI Legal Department, Head of the CIL Drafting Committee
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Perhaps the inclusion of less investment-friendly provisions,
taken from the current FIL, into the CIL explains the increased
State interference in investment activities. For example, the
draft CIL sets forth requirements for investment projects, and
procedures for registration, appraisal, and project
modifications. For domestic investors, these requirements are
obviously more cumbersome, costly and time-consuming than the
current regulations on domestic investment. We suggest the draft
CIL be revised to remove such controls over ordinary projects.
With regard to project implementation, the draft CIL provides
for state micro-management of investment, which ends up tying
investor's hands. For example, investors are required to subject
imported machinery and equipment to an evaluation on price and
quality. Project implementation, including evaluation of
equipment, is an investor's job, and we therefore suggest that
this provision be dropped.
In principle, regulations related to investment should be
simple, supportive of investors, and limit opportunities for
rent seeking. The current draft of the CIL does not seem to
reflect these principles.
Mr. Vu Tien Loc, President and Chairman,
Vietnam Chamber of Commerce and Industry (VCCI)
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The draft CIL appears to use stronger administrative tools and
procedures to manage investment, and calls for an investment
agency to appraise investment projects, prior to their
implementation. Once the license is granted, the State believes
that investors will adhere to the license. In my opinion,
investors' commitments are purely formal because the information
they provide is only an economic forecast. During
implementation, investors need to follow market rules and adjust
their projects accordingly; they cannot go back to the
investment licensing agency to re-register after each
adjustment. Rather, they should only have to work with
specialized agencies, such as environmental or labor agencies,
to certify that they are compliant with standards. If the law
does not state this clearly, it would leave room for
discretionary judgement by public servants.
Mr. Nguyen Tien Lap, Deputy General Director,
InvestConsult
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 According
to the draft law, all investment projects require an investment
registration or license. Why do investors need to undertake
registration? For what purpose does the State need registration
from investors? I don't see a clear answer. The requirement that
ordinary projects be registered does not make sense, and
provides opportunities for corruption. In my opinion,
registration and investment registration certificates may be
necessary only in the following cases: i) when a contribution to
capital comes from abroad; ii) when investors apply for
incentives; or iii) when investors need State support for land
rental. In all remaining cases (except conditional projects
subject to approval), the CIL should drop the registration
process and the investment registration certificates.
In addition, the draft also sets forth a number of new
sub-licenses for domestic enterprises with private investment.
For example, projects with over 30% of state capital, or
projects with 100% private investment exceeding VND300 billion,
require a license. This is confusing because most projects which
receive loans from state-owned commercial banks or investment
funds would then need an investment license.
Mr. Tran Vu Hai, Attorney, Managing Partner,
the Law Office Tran Vu Hai
-
 I
believe that the draft does not promote investment. On the
contrary, it hinders investment, and limits business freedom
through the licensing procedures for investment and investment
incentives. The draft CIL does not follow the Prime Minister's
guiding principles on the formulation of the CIL and UEL. The
current Law on Domestic Investment Promotion, despite its
shortcomings, is more conducive to investment than the draft CIL.
VAFI's concern is that if this draft were passed, many thousands
of enterprises would face additional procedures, which would
result in additional costs, delays, and even the loss of
business opportunities. The bottom line is that neither the
State nor its citizens would benefit from such bureaucracy and
paperwork.
The classification of projects is confusing and cumbersome. We
suggest that any classification be based on the nature, rather
than the size, of projects. For example, the classification of
projects with non-state capital exceeding VND 300 billion into
the 'conditional ordinary' category is groundless. Another
example is that of financial services, which are very broad and
span auditing, accounting, price appraisal, debt retrieval, etc.
These services are very common and should not be classified as
“important projects.” The existence of a condition on investment
registration, such as holding a professional license, should not
mean that an investment project thereby becomes subject to a
full-scale evaluation, if it otherwise would only be subject to
registration. Rather, the only procedure that needs to be added
to the registration process in such a case is checking for
fulfillment of that specific condition.
Mr. Nguyen Hoang Hai, General Secretary,
Vietnam Association of Financial Investors (VAFI)
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