In recent meetings, the National Assembly is taking time to consider and approve 10 law projects, 5 draft resolutions and comment on 6 other laws. In particular, the draft Law on Investment (amended) is receiving a lot of attention, as it creates an important legal framework and determines whether or not Vietnam will attract foreign investment, especially after the Covid-19 pandemic.
Giving ideas to the draft Law, many National Assembly delegates raise opinions about adding more specific and stricter regulations on the participation of foreign investors in the investment projects, ensuring the “national security and defense” factor, namely:
- There will be a list of sectors restricting market access to foreign investors
Some suggest to carefully review and compare with relevant international commitments, ensuring flexibility in the implementation of Vietnam’s commitments under Free Trade Agreements, Bilateral investment agreements and other commitments may change or be negotiated in the future. At the same time, there are suggestions to specify the type of geographical areas that limit foreign investment.
Recognizing the constructive opinions, the Standing Committee has supplemented Clause 3, Article 9, supplementing and assigning the Government to announce the List of industries sectors restricting market access for foreign investors.
- Request for supplementation of regulations on the grant of Investment Registration Certificates
According to the Politburo’s Resolution 50 dated August 20th, 2019 on orientations to complete institutions, policies, improve the quality and effectiveness of foreign investment cooperation by 2030, one of the mainly tasks and solutions in this period is to complete institutions and general policies on foreign investment, in particular, to study and formulate regulations to overcome the situation of “little capital”, transfer pricing and “underground” investment, “hiding” investments under Vietnamese people to buy shares or capital contribution of Vietnamese enterprises.
The draft Law on Investment (amended) is studying and supplementing the provisions about “conditions on national defense and security” in the process of issuing Investment Registration Certificates (or equivalent legal validity documents) for new investment projects and the process of considering and approving investment activities through capital contribution, purchase of shares/capitals, especially for foreign investors investing through these forms. Foreign investors may be suspended or terminated from business investment activities if such activities are detrimental to national defense and security.
This is a new regulation compared to the Law on Investment 2014, reflecting Vietnam’s strong national defense and national security goals.
Currently, the Foreign Investment Agency (Ministry of Planning and Investment) has introduced many solutions to control national defense and security conditions such as banning Vietnamese individuals and organizations in the name of foreign households on land transactions. Controlling credit and lending activities between Vietnamese organizations and individuals in foreign real estate investment projects, etc.
- Handling inadequacies in the transfer of investment projects
According to the State Securities Commission, the transfer of an investment project under construction or operating to a foreign investor must meet the investment conditions applicable to foreign investors in case foreign investors receive a transfer of projects in industries sectors having conditional market access applicable to foreign investors, which take into account factors of national defense and security.
Some delegates of the National Assembly also said that over the past time, project transfer has had a lot of inadequacies that could not be solved because the regulations on conditions for project transfer are easy. In fact, there are many investors registering for investment projects, instead of implementing, they could transfer the project and take the value difference. Therefore, the delegates suggested that additional studies should be conducted to control project transfer activities, similar to those for technical infrastructure investment projects, to ensure that project proposal are true rather than having to set up a project to transfer and enjoy the value difference as it is now.
Speaking at the meeting on the content of control regulations for foreign investors, Minister of Planning and Investment Nguyen Chi Dung said that in the Law on Investment, the Law on Enterprise has a number of provisions to ensure security, avoid “hiding” investments, “underground” investments, control investment in areas sensitive to national defense and security. Besides, based on the acquiring of delegates’ comments, the drafting agency will study to have a more appropriate and stronger management policy on this issue. At this point, in the new Directive on attracting foreign investments in the new situation, it will also integrate a number of new policies to ensure the attraction of foreign investment capital for the right objectives and purposes.