The Vietnam Business Forum is organised in the framework of the Mid-term Consultative Group Meeting.

The Vietnam Business Forum (VBF) is organised in the framework of the Mid-term Consultative Group Meeting to be held in Vinh City on June 16-17.

Foreign investors have expressed their satisfaction with recent Government efforts, saying that some considerable changes have been seen since the last VBF in December 2003.

These changes have been shown in the positive responses of foreign investors when asked about the investment climate in Vietnam, according to Deepak Khanna, IFC Country Director.

One third of the 93 Japanese investors in Vietnam polled said they planned to expand business operations in country, while 4/5 of US investors expressed the same interest.

Kenjiro Ishiwata, Managing Director of the Japan External Trade Organisation (JETRO) Vietnam, named the fields in which it has seen changes of late, including reductions in investment cost caused by the lower telecommunications fess, air tickets, and the abolishment of the dual pricing mechanism (excluding the power price).

Eurocham valued the preparation of the new Corporate Law, which unifies the Law on Foreign Investment and the law for Domestic Enterprises, to pave the way for further development of the private sector in Vietnam and its competitive position in the global market.

However, the leading concern among investors, according to the organisations representative, was in assurance from the Government that foreign investors licensed under the Law on Foreign Investment prior to the implementation of the new law, will retain any and all advantages stated in their existing contracts.

“This is most essential for maintaining and improving the confidence among investors in the regulatory environment and investment climate in Vietnam,” said a representative from Eurocham.

A clear and predictable investment climate is the common desire of all investors. They have all complained about the recently promulgated Decree 158 on the implementation of the VAT Law, and Decree 164 on the implementation of Corporate Income Tax (CIT) Law, which have effectively nullified every incentive previously promised to foreign investors.

Investors have also complained about the lack of transparency, lack of accountability, poor infrastructure, and rampant corruption that subdue investment, job creation and economic growth in Vietnam.

They have also called the Government to pay attention to specific fields, including intellectual property rights, labour issues, and fair practices for both foreign and local investors.

On the Vietnamese side, Deputy Minister of Planning and Investment Nguyen Bich Dat informed foreign investors of Government efforts to ensure a healthy business climate.

He said the Government is on the way towards gradual removal of discriminatory practices. In addition to the Law on Investment applied to both foreign and local investors, the Government will direct the relevant bodies to draft other laws, including law on bankruptcy and the law on credit organisations.

The Government has also asked these state bodies to amend the taxation policies on CIT and VAT laws, as well as the regulations on foreign labour.

Regarding the amendment of Decree 45 on technology transfer, Mr Dat said that by scrapping the limits on technology transfer fees for private enterprises, the loosening and gradual destruction of the ceiling of technology transfer fees for enterprises holding stakes in state owned enterprises, are now under consideration.

Nguyet Ha