The delegation of powers to manage the implementation of offshore direct investment projects to the Planning and Investment Ministry, the Industry and Trade Ministry and other line ministries and localities where offshore investment-making businesses have made business registration or are headquartered remains unclear, leading to ineffective pre-investment licensing management and post-licensing supervision of these projects, analyzed Huyen Vy of Thoi Bao Kinh Te Vietnam (Vietnam Economic Times).
Making shoes at Pou Yuen Vietnam Co. Ltd.__Photo: Thanh Vu/VNA
Lack of administrative and economic penalties against offshore investors that fail to strictly fulfill the reporting requirements has been regarded by legal experts as one of the reasons for ineffective state management and review and evaluation of offshore investment activities.
Meanwhile, the Industry and Trade Minister’s Decision No. 4376 of August 6, 2008, on functions, duties and powers of Vietnamese trade commissions overseas does not clearly define these commissions’ duty to assist the Ministry of Industry and Trade’s leadership in managing offshore direct investment. This has necessitated the formulation of a mechanism to help trade commissions as well as embassies and consular offices fulfill their duty of conducting offshore investment promotion activities.
In addition to existing long-term plans of the petroleum sector, a national strategy for offshore direct investment for all sectors with offshore investment potential should be elaborated as soon as possible to serve as a ground for devising specific and practical measures to promote offshore direct investment and manage capital and resources of offshore investors, especially by state-owned businesses, avoiding spontaneous and inefficient offshore investment projects, legal experts suggested.
A specialized organization or agency in charge of trade and (offshore) investment promotion, like Japan’s JETRO and Korea’s KOTRA, should also be established to help domestic businesses seek offshore investment opportunities and obtain useful information on investment regulations and policies of foreign countries’ investment environment from related non-governmental organizations and business associations, and make and publicize a list of existing and expected offshore investment projects for reference.
According to the Planning and Investment Ministry, more ministerial documents will be issued to further detail framework regulations provided in Government Decree No. 78/2006/CP of August 9, 2006, on offshore direct investment, and Decree No. 121/2007/ND-CP of July 25, 2007, on offshore direct investment in the petroleum sector.-