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COVER STORY

Smoother Amended investment and enterprise laws

promise to further improve the investment
environment and express the government’s
sailing ongoing efforts in FDI attraction.

T HUNG CAO REPORTS

of the government allowed it to maintain a
high level of investor confidence by controlling
health and business risks.”
The LOI and the LOE 2020 contain more
progressive changes and are probably not as
significant as earlier LOIs were. The biggest
change, from an investment perspective, is to
move to a “Negative list” approach to restricted
investment sectors, as the previous “Positive
list” approach created too many issues and a
lack of clarity, particularly as new business
fields emerge that were not previously envis-
aged when WTO agreements were made,
according to Mr. Matthew Lourey, Managing
Partner of the law firm Acclime Vietnam
Moreover, major positive shifts in invest-
ment approach and commitment to legal
reform by policy makers appears to boost
foreign investor confidence in Vietnam. Poli-
cies in recent times to pursue a broad range
of FTAs has allowed Vietnam to stand out in
the developing world as one of the more
favorable destinations for attracting invest-
ment. “We have seen the benefits of this strat-
egy over the Covid-19 period, as even though
FDI fell globally, foreign market entry enquiries
remained strong, and we saw increases in
foreign investors establishing a presence in
Vietnam, especially with larger parcels of
investment to flow once travel restrictions
PHOTO: VIET TUAN
ease,” Mr. Lourey went on.
ietnam’s increasingly dynamic eco- commitment to global integration in terms of “We have also seen recent circulars, on
nomic integration and the numerous investment and economic development, the tax, labor, and investment, being less ‘piece-
V free trade agreements (FTAs) it has law also emphasizes improving the quality and meal’ in approach, and more comprehensive
signed have presented many more opportu- effectiveness of investment activities. documents providing far more clarity for
nities to local businesses and opened up These are welcome updates to these key laws in a single document, as opposed to his-
foreign investment in the country. The National laws and the first since 2014. The new LOI torical approaches where implementing reg-
Assembly therefore passed the amended Law introduces more favorable conditions for for- ulations, and appropriate appendices, would
on Enterprises (LOE) and amended Law on eign investors, together with those from trade be found scattered over many documents.”
Investment (LOI) last June, which create a agreements such as the EU-Vietnam FTA,
significant foundation for attracting FDI. Ele- the UK-Vietnam FTA, the Comprehensive Key improvements
ments of both new laws, however, have been and Progressive Agreement for Trans-Pacific In 2020, a series of legal documents such
met with some degree of concern among both Partnership (CPTPP), and the Regional Com- as the amended LOI, amended LOE, and the
existing and new foreign investors. prehensive Economic Partnership (RCEP), Law on Public-Private Partnership Investment
as well as many new investment incentives. were approved for the purpose of simplifying
Catalyst for FDI “These make Vietnam an attractive target investment procedures, enhancing decen-
Having come into effect on January 1 this for foreign investors,” said Ms. Elaine Chew, tralization and transparency, diversifying
year, the new LOI promises to enhance Vietnam’s Senior Associate of ACSV Legal. “It’s also investment forms, and supplementing special
investment landscape and foster its image as important to highlight that Vietnam’s suc- investment incentives for large-scale projects.
an attractive destination for foreign investors. cessful containment of the coronavirus through In the future, Vietnam is expected to develop
While expressing the government’s further strict State policies and the overall approach further and remain a promising destination

20 | VIETNAM ECONOMIC TIMES | APRIL 2021