Fundamental changes in the draft revised Investment Law as well as reforms of foreign direct investment (FDI) attraction policy, especially tax incentives, will help Vietnam lure more FDI, experts said at a conference held by the Vietnam Chamber of Commerce and Industry in Hanoi on November 20.

The listing of sectors and areas forbidden from investment and business or allowed for investment and business with certain conditions is one of the most important new points in the draft revised Investment Law, said Quach Ngoc Tuan, deputy head of the Legal Department at the Ministry of Planning and Investment.

According to the draft, six sectors are listed as banned from investment and 272 areas specified as conditional investment domains, a remarkable reduction from the current 51 prohibited investment domains and 386 conditional investment fields as prescribed in the current law, he noted.

The draft law also provides in great details the forms of investment incentives, the principles, procedures and conditions to apply those incentives. There will no longer be a separate investment licence for foreign investors, and the duration of granting investment licence is shorten to 15 days instead of 45 days, Tuan added.

Meanwhile, Nguyen Van Phung, head of the Large Taxpayers Office at the Ministry of Finance’s General Department of Taxation, said new tax policies will benefit investors remarkably.

VCCI Director Vu Tien Loc said the draft revised Investment Law, which is expected to passed soon, clarifies State areas and sectors prioritised for investment, while addressing problems related to conditional investment domains, thus building an open and transparent investment environment.

Statistics from the Foreign Investment Agency under the Ministry of Planning and Investment, FDI accounts for 22-25 percent of total social investment and is on a rising trend.

Last year, Vietnam disbursed 11.5 billion USD of FDI and is aiming for 12.5 billion USD this year, according to the department. Ten largest FDI partners of Vietnam are Japan, the Republic of Korea, Singapore, Taiwan (China), the UK, Hong Kong (China), the US, Malaysia, China and Thailand.

Prof. Dr. Nguyen Mai, Chairman of the Association of Foreign Invested Enterprises, said Vietnam is seeing a new strong wave of FDI with higher quality and technology, citing as examples projects invested by major players including Samsung, Microsolf and Intel.
He however warned that Vietnam should work harder to improve the enforcement of its policies, adding that about 15,000 FDI enterprises are facing many problems due to poor performance of the contingent of public servants.

Speaking on the sidelines of the conference, Spanish Ambassador to Vietnam Alfonso Tena said foreign investment is crucial in fueling the economic development of Vietnam .

However, to make full use of the investment, Vietnam should simplify and shorten procedure on investment and customs, he said.-VNA