BizCLIR

Vietnam has considerably improved its environment for foreign direct investment (FDI) in recent years. The recently passed Investment Law (IL) and Enterprise Law (both effective on 1 July 2006) to a large extent leveled the playing field by eliminating many distinctions and differences in treatment between domestic and foreign investors, and between private and state-invested enterprises. Nonetheless, a truly common legal framework has yet to be achieved. Also, the promulgation of key implementing regulations was significantly delayed, causing concern and confusion among investors—both domestic and foreign—as to which rules applied and how to organize new investments or changes to existing ones.

In addition to these IL-specific issues, three issues of long-term, fundamental interest to foreigners rise to the top of their list: 1) treatment of IPR; 2) the role of SOEs; and 3) the pervasiveness of corruption throughout Vietnam. Intellectual property is discussed in another chapter in this Report; the role of SOEs and corruption are cross-cutting issues discussed in Chapter I. Foreign investors in Vietnam also express concern about a number of specific issues ranging from the overall environment for trade, to tax and customs issues, to an overly rigid labor and employment environment, to a court system that struggles to achieve fair, swift, and predictable resolution of disputes.