Minister Dinh Tien Dung: committed to issue many policies to attract Japanese investors

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Minister Dinh Tien Dung answered the Nikke newspaper in Japan

What could Japanese businesses expect for business opportunities through investment in Vietnam, sir?

According to the World Bank, Vietnam's business environment index for 2016-2017 has risen 9 places (from 91st of 189 to 82nd of 190).Vietnam competitiveness is the 60 in the world out of 138 countries ranked by World Economic Forum in 2017.

In mid-May 2017, the Moody's credit rating agency upgraded Vietnam's credit rating from "stable" to "positive". Vietnam has always had political, social and macroeconomic stability. Viet Nam's legal institutions and transparency are being constantly improved and step by step complying with international commitments and standards, enabling investors and businesses to enjoy long-term operation and development.

The Vietnam’s Government is committed to creating the best business environment towards business environment standards of the OECD countries, reducing contingencies for macro-environment and policy, increasing predictability and transparent implementation and accountability to the business community. Continuing to build and facilitate factors to create competitive advantages for the economy (such as infrastructure, financial system development, education reform, improvement of the quality of human resources training). Undertaking to implement the institutional reform in open-hearted and friendly manner in order to bring the opportunity of participation and contribution of economic sectors including the private sector to economic growth.

With a favorable business environment, the Vietnam’s Government expects Japanese businesses to invest more strongly in Vietnam in the fields: national public key Infrastructure development, PPP projects; environment; energy, renewable energy; manufacturing industry; high-quality and effective agriculture; Finance - banking and equitization of SOEs.

For equitization of SOEs, we encourage the transfer and merger of activities (M & A) associated with the large SOE equitization in fields such as transportation, infrastructure, food, agriculture, telecommunications, commerce, services, tourism, construction etc. This is a great opportunity for Japanese investors and businesses to become strategic partners of the Vietnamese businesses in the fields with great potential for development

In particular, we encourage Japanese investors to actively invest in the Vietnam’s stock market. With solutions to improve the business environment, enhance national competitiveness and many market development policies, Vietnam's stock market in the first 6 months of 2017 strongly developed. The VN Index has reached a new height in the past nine years. The stock market continues to be the attractive destination for foreign portfolio investment inflows and foreign investors who have been big net buyers for the past six years. From the beginning of the year to the end of June 2017, foreign investors have bought a net value of 9,300 billion VND of shares, fund certificates and net value of 14,400 billion of bonds.

Could you tell us about regulations for foreign enterprises in Vietnam at the current time and regulations in expectation of being loosen in the future?

In 2014, the 8th session of the 13th National Assembly adopted a number of important laws including Enterprise Law (revised) and Investment Law (revised), creating transparency and clearance in the investment and business, facilitating international integration, which were highly appreciated and supported by domestic and foreign business communities. In particular, the Investment Law 2014 has vigorously reformed the administrative procedures towards transparency, simplicity and efficiency. Some important amendments and supplements include:

Firstly, the Law has simplified the procedures and shorten the processing time of issue of investment certificate for foreign investors within 15 days instead of 45 as before.

Secondly, the Law has reformed the process of enterprise establishment for foreign investors towards removing the requirement on submitting investment certificate and business registration certificate to separate investment activity under project with business registration activity.

Thirdly, the Law has also specified legal position of FDI enterprises to create basis for unified application of investment conditions and procedures for these enterprises in the direction that enterprises with a foreign invested capital of over 51% are required to apply conditions and procedures like foreign investors. For the others, enterprises apply conditions and procedures like domestic investors.

Fourthly, the Law has clarified scope of regulation of the Investment and Law on Securities in transfer of share; form of capital contribution, share and contributed capital purchasing of foreign investors and required conditions of foreign investors. With a synchronous legal system in the securities sector, the Ministry of Finance has coordinated with ministries and agencies to effectively implement solutions to promote the diversification of investors attract and expand the foreign investments institutions into capital market. Specifically: promulgating Decree No. 60/2015 / ND-CP in the direction of removing the limitation on the ownership ratio of foreign investors in non-conditional businesses and allowing foreign investors to implement unlimited investment in government bonds, local government bonds and corporate bonds; Amending current regulations to simplify investment procedures of foreign investors in Vietnam’s stock market; And promulgating guidelines and notification on the stock market to encourage listed companies to disclose information in English and request departments and depository centers to disclose information in English to facilitate foreign investors to invest in the stock market.

Along with that, Vietnam has finalized the legal framework on professional investment institutions on the stock market under international practice such as open-end fund and closed-end fund, member owned fund, securities investment company, real estate investment fund and Exchange Traded Fund(ETF) were formed and operate on the stock market; and the legal framework for the derivative securities market has also been fully promulgated. On August 10, 2017, the derivative securities market was officially launched and put into operation

What has Vietnam issued preferential policies for Japanese investors, sir?

The Vietnam’s Government will continue to drastically improve the business environment, clarify and simplify administrative procedures in line with international practice and commitments. Thereby, enhancing national competitiveness and effectively attracting all resources and creative ideas, contributing to the economic development.

After 45 years of official diplomatic relation, it can be said that the relationship between Vietnam and Japan has been developed strongly and is in the best period in history. Japan is the Vietnam’s largest official development assistance (ODA) country, the Vietnam’s second largest foreign investor, and the Vietnam's fourth largest trading partner.

Being a leading country in science and technology, financial investment and many other fields, Japan becomes a Vietnam’s comprehensive strategic partner. Vietnamese businesses has trusted and invested in Vietnam in the context where Vietnam is gradually shifting the economic growth motives to high value sectors using advanced technology and high-quality labour.

In the aim of tightening the relationship, the two countries’ senior leaders maintain regular visits and meetings at international and regional forums. Most recently, the visit of Prime Minister of Japan to Vietnam in January, 2017 and the visit of Prime Minister Nguyen Xuan Phuc to Japan in June, 2017. Vietnam is strongly committed to continuing to perfect the legal system and policies related to investment in a consistent, open, transparent, predictable and facilitation manner for investors.

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Although, Japanese financial corporations, insurance companies and securities companies have invested in Vietnam, it is still not corresponding with the development potential. In order to further encourage Japanese investors, in the coming time, in addition to measures to stabilize macro-economy, operate fiscal and monetary policies, Vietnam will focus on researching and implementing measures such as continuing to remove barriers, strengthening reforms in equitization mechanism, capital divestment for foreign investors and reducing the proportion of state ownership in SOEs; accelerating the listing of large-scale equitized SOEs on the stock market and reducing the proportion of state ownership to increase quality goods for the stock market to meet the needs of investors; modernizing information technology on the system of bidding, registration, depository and listing of government bonds and government guaranteed bonds in the direction of minimizing administrative procedures, shortening the time from the issuing stage to the listing stage from T + 2 in 2016 to T + 1 in 2025 to increase the liquidity of the bond market; reforming administrative procedures for foreign investors; and diversifying products on the stock market, .

Thank you,