Vietnamlawmagazine

* On November 8, a site providing e-regulations on foreign direct investment (https://vietnam.e-regulations.org) was launched jointly by the Ministry of Planning and Investment and the UN Conference for Trade and Development (UNCTAD) for foreign investors’ inquiries into investment procedures and conditions in Hanoi, Da Nang and Ho Chi Minh City.

Through this site, foreign investors may promptly get updated and necessary information and recommendations about procedural steps to be carried out without having to contact directly local administrations before deciding on which localities to invest in.

* In order to attract more investment from non-state economic sectors in environmental protection, the Vietnamese State has been elaborating, finalizing and enacting preferential regulations and mechanisms for developing consolidated solid waste or wastewater treatment facilities, conducting researches into hazardous waste treatment, producing or trading in products to substitute for naturally occurred raw materials, and transferring waste treatment technologies.

Moreover, concerned authorities are actively shifting from the centrally subsidized mechanism of environmental management to a market-regulated mechanism, clearly identifying environmental protection projects still eligible to state funds and projects in need of both state and non-state investments, especially in environmental hotspots of industrial and special economic zones.

Environmental experts also propose amendments to the 2005 Environmental Protection Law regarding clear-cut separation of the state management of environmental protection from that of exploitation, use and protection of natural resources such as forests, water, petroleum and fisheries and criminal liability of institutional environment polluters.

Recently, the Government has promulgated a regulation on pilot implementation of the public-private partnership (PPP) investment model. Among nine domains eligible for the pilot model, two are for building of clean water supply plants and waste disposal facilities. A national target program on environmental quality improvement will soon be launched to mobilize resources for remedying the environmental degradation in environmental hotspots.

* According to recent statistics, state capital accounts for up to 60 percent of total registered offshore investment capital (around USD 8 billion). This situation should be addressed in order to control more strictly state-capital outward investment made by state corporations and economic groups, redirecting state capital under their management back into their assigned business lines.

In replacement of Decree No. 78/2008/ND-CP, a new regulation currently drafted by the Ministry of Planning and Investment devotes a whole chapter for regulating offshore investment with state capital. It requires investors that hold 100 percent or a dominant capital portion in offshore investment projects funded with state capital to conduct commodity procurement, construction and installation or solicit engineering consultancy for their projects under the bidding regulations.

The management of state-funded offshore projects should also involve tasking specific agencies to inspect and assess the effectiveness of state capital use in line with an inter-sectoral coordination mechanism.

Also concerning the use of state capital, a decree will be soon issued to help the Government manage and review the use of state capital and assets at state enterprises through a sole specialized body which will regularly analyze and report on production and business efficiency of these enterprises. The Government will also resolutely dissolve state enterprises having extended their investment in areas and sectors unrelated to their assigned business lines and suffered from losses.

* Vietnam should stop pursuing merely quantitative targets in attracting foreign investment and start paying greater attention to the quality and effectiveness of investment projects, said deputy director of the Central Institute for Economic Management Nguyen Dinh Cung at a recent seminar on foreign investment and private economic development.

To this effect, Vietnam should better consider giving incentives to some priority sectors rather than specific geographical areas and narrowing down subjects eligible for incentives thereby setting forth selective foreign investment attraction objectives. Therefore, not every locality would be encouraged to call for foreign investment, especially in golf course, steel, cement, seaport and industrial park projects which might entail environmental pollution.

In addition, investment incentives and assistance for Vietnamese enterprises should be provided mainly in the form of technical assistance and public-private partnership to raise the capacity of these enterprises to join the global value chain, rather than focusing merely on financial incentives.

* An e-information system to facilitate information disclosure by listing companies and public companies is planned to be developed by the State Securities Commission, which has announced a bidding invitation for capable information technology service providers. The Ho Chi Minh City Stock Exchange (HOSE) has also been testing a network software for its members’ information disclosure. These moves aim to standardize information input for disclosure, reduce processing time and facilitate fast and convenient access to disclosed information by investors and interested parties.

The securities authority will also issue a regulation obligating public companies, including listing companies, securities companies and fund management companies, to use the e-information system to make online disclosures and prevent leakage of information in the form of market hearsays prior to official disclosure.

* The Ministry of Finance is expeditiously working on a regulation guiding e-transactions in taxation, permitting the formation of intermediary tax service providers (T-VAN) helping taxpayers carry out tax procedures and completely process tax data before they are submitted to tax offices.

To be licensed for provision of value-added services in tax-related e-transactions, a T-VAN enterprise must be a licensed information technology service provider in Vietnam and have operated in developing information technology solutions or software for at least five years or for at least 50 enterprises. Financially, T-VAN enterprises must be guaranteed by credit institutions or insured for paying compensations for damage caused during transmission and receipt of tax e-documents between service users and tax offices.

As estimated by the General Department of Taxation, there will be some 10,000 enterprises using tax e-declaration services by 2011.

* The reform of administrative procedures in taxation in the coming time would involve substantial changes to the Tax Administration Law, the Value-Added Tax Law, the Export Duty and Import Duty Law and the Customs Law, announced by Minister of Finance Vu Van Ninh.

The current provision on a grace period of 275 days or more for import duty payable by enterprises importing materials for export production which satisfy some specified conditions would be amended to avoid tax loss or time-consuming tax arrear collection by tax offices in case these enterprises sell all these goods or dissolve themselves. Importers might even be required to pay import duty before actually importing dutiable goods.

The value-added tax law would be revised towards requiring all taxpayers wishing to have their tax amounts refunded or credited to make payments via banks. At present, any goods or service valued at under VND 20 million may be considered for tax refund or credit even it is not paid for via bank.

The Tax Administration Law would also be amended to channel taxpayers according to their business sizes in order to apply appropriate management methods, limit the risk of tax under-collection for the state budget and simplify tax procedures.-