Socialist Republic of Vietnam

(20/Feb/2003)


The Ministry of Planning and Investment (MPI) has called for sweeping changes that would allow 100% foreign investment in several sectors for the first time.

Under the proposals it has made to the government, investment licences would be issued to wholly-foreign owned businesses in the fields of forestry and tourism. Ministry officials said the foreign firms would be issued licences on the condition that they only use timber that is legally imported or sourced from plantations, local farms or managed forests, or they encourage foreign tourists to visit Vietnam.

The foreign businesses will be encouraged to invest in plantations managed by private farmers or state farms who have been allocated or leased state land for forestry purposes. They will provide the capital, plant varieties and technical assistance for the plantations, and will purchase the forestry products through contracts with the farms. The proposals would also see the State encourage foreign investment in high quality medicines, veterinary medicines, agricultural chemicals and technical services for agriculture, forestry and fisheries for the first time.

The ministry has also asked the government to expand and loosen up opportunities for foreign investment in capital-intensive fields such as mechanical engineering for the mining, energy, oil and gas sectors; the production of iron, steel, alloy and other metals; information technology; and medical equipment. The draft changes would see the Ministry of Culture and Information clearly define the scope for foreign investment in fields under its management.

The proposals would encourage 100% foreign investment in technical publishing, business labels, some entertainment services and sports - under the regulation of the Culture and Information Ministry. Planning and Investment Ministry officials said they have also suggested that the government loosen its restrictions on joint ventures in maritime services. At present, the government maintains a moratorium on new investment licenses in the manufacturing of steel, cement and beverages.

Last year, Vietnam licensed 669 foreign direct investment (FDI) projects with a combined capital of US$1.33 billion. This was 32.4% more projects than the year 2001, but 41.1% less capital. There are now 1,800 FDI projects, which have already disbursed some US$25 billion of registered capital, operating in different parts of the country. (VNS)