The Ministry of Planning and Investment (MPI) is seeking public opinions on a draft decree intended to supersede Government Decree No. 108/2006/ND-CP, which is an important document governing foreign investment.
The draft decree introduces a new concept of foreign-invested projects. Accordingly, a foreign-invested project is an investment project in which the capital portion contributed by foreign investors accounts for more than 10 per cent of the project’s total investment capital and foreign investors directly participate in the management of the project.
Foreign investors, under the draft paper, are defined as organizations and individuals investing their capital in Vietnam. A foreign-invested enterprise would be also considered a foreign investor in case foreign parties own over 49 per cent of the charter capital or present more than half of members of the board of directors.
A new provision in the draft decree is that overseas Vietnamese are allowed to opt for either investment procedures applicable to foreign investors or those for Vietnamese investors. With this change, overseas Vietnamese investors may enjoy the same investment incentives as those provided for domestic investors. For example, they would be able to register their projects via a business registration process instead of having to go through a more complex process to obtain an investment certificate.
In order to settle difficulties faced by a foreign investor who seeks to invest in a sector not expressly regulated elsewhere or mentioned in Vietnam’s WTO accession commitments, Article 3 of the draft decree states that the agencies responsible for issuing investment certificates for industries and sectors not yet governed by other regulations must first consult the MPI and related ministries to request Prime Minister approval of the proposed investment.
Regarding the competence to grant investment certificates for projects for which investment decision must be approved by the Prime Minister, the draft decree proposes that provincial-level People’s Committees would grant investment certificates for these projects on the basis of the MPI’s appraisal opinions.
Under Article 9 of the draft decree, working offices of foreign parties to a business cooperation contract would no longer be able to register a seal, open a bank account, hire employees and sign contracts and conduct business which are permitted under Decree No. 108/2006/ND-CP.
Article 10 provides that investors that contribute capital to, buy shares from or acquire a business pertaining to an investment project would be required by law to fulfill business registration and investment certification procedures.-