Vietnam’s MPI Submits Decree Calling for Tighter FDI Control - Vietnam Briefing News
Oct. 14 – Vietnam’s Ministry of Planning and Investment is looking at tightening control over FDI projects in the country by amending the FDI management method currently utilized by the government.
Director of the MPI’s Legal Department Pham Manh Dung said this week that his department has submitted a draft decree to the Vietnamese government which would further amend the 2005 Investment Law. If approved, the new decree will replace Decree 108 which has been in effect since 2006.
Dung is concerned that while the volume of registered capital coming into Vietnam is large, only a few projects are running effectively.
“The draft decree will only make some changes in comparison with the Decree 108. However, the issues it mentions are really sensitive,” he said.
One of the MPI’s main criticisms of the current legislation is that it allows small-scale investors to claim large plots of land, leading to massive waste. There is currently no minimum investment capital requirement, so projects are being capitalized for as little as US$10,000.
“The regulations need to be amended so as to allow us to use land in the most effective way,” Dung said.
Also under current regulations, Vietnamese management agencies do not examine the financial claims of foreign investors, creating an incentive for foreign investors to claim investment capital that they do not actually have.