By Business Team Last updated on August 13, 2019

Vietnam to Review Investment Law in order to improve Foreign Direct Investment (FDI)

The Vietnam National Assembly will pass the revised Investment Law this month. The new law aims to improving the business climate in Vietnam, creating a clear, open and transparent environment for investors.

The Vietnam Chamber of Commerce and Industry (VCCI) and Dien dan Doanh nghiep (Business Forum) organized a meeting yesterday and discussed how the revised law would affect foreign direct investment in Hanoi.

Clearer Investment Policies

Mr. Quach Ngoc Tuan, Deputy Director of the Ministry of Planning and Investment said that the regulations on prohibited and conditional businesses were the main points of the revised law. The regulations strictly following the Constitution were adopted last year. They set out that people had the right to do business in the sectors that are not explicitly prohibited by law.

According to the draft submitted to the National Assembly at the eighth session of the 13th National Assembly, there are 6 prohibited business sectors, as well as 272 conditional sectors which will be approved based on the results of 51 prohibited businesses and 386 conditional businesses in accordance with existing law. The list is currently being updated. Moreover, the revised law will provide clearer regulations for economic organizations that use foreign investment capital, Tuan added.

Mr. Nguyen Van Phung from the Department of Taxation said there would be changes in corporate tax policies. Specifically, enterprises would not have to register materials consumption with tax agencies. Tax would be reduced from 10 to 20 percent for new investment projects, as well as tax exemption on personal income, import and export along with expanding investment.

FDI accounts for 22-25 percent of total investment capital and continue to rise. The Foreign Direct Investment (FDI) disbursement capital of the country reached US$11.5 billion last year and expected to US$12.5 billion this year, according to the Department of Foreign Investment under the Ministry of Planning and Investment.

The 10 leading FDI partners of Vietnam are Japan, Korea, Singapore, Taiwan, the UK, Hong Kong, the U.S, Malaysia, China and Thailand.

(Source: VNS)