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Vietnam Streamlining Foreign Investment Law

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HANOI, Vietnam (11 May 2000)–According to an AP report, Vietnamese officials, bombarded by complaints from overseas investors, has taken some promising steps to address the country’s sluggish economy, but needs to halt the slide in foreign investment. According to Deputy Prime Minister Nguyen Tan Dung in the opening address to the National Assembly, Vietnam’s economy […]

HANOI, Vietnam (11 May 2000)–According to an AP report, Vietnamese officials, bombarded by complaints from overseas investors, has taken some promising steps to address the country’s sluggish economy, but needs to halt the slide in foreign investment. According to Deputy Prime Minister Nguyen Tan Dung in the opening address to the National Assembly, Vietnam’s economy grew 5.6% in the first quarter. However, in the first four months of this year foreign investment was down 18% to US$400 million, while promised new investment fell 55% to US$$260.5 million.
Investors frequently cite Vietnam’s red tape and corruption, murky legal system and debt-ridden banking system as the country’s biggest problems, says the AP report.
The National Assembly, which meets twice a year, is expected to change the foreign investment law to woo back investors who have complained of the government’s stranglehold on the business environment. Proposed new incentives include lower taxes on profits remitted overseas, a lower import-export tax for projects in sectors and localities where the government is keen to promote investment and a lower value-added-tax on imported materials not locally available. Also, obtaining a foreign investment license would take only 45 days instead of 60 days. This is promising news for the Taiwan bicycle sector, which has chosen Vietnam as its next export hub, after China. By the end of the year it is estimated that more than 80 bike and part makers will be up and running in Vietnam. The majority of their production will go to Europe, the US and Japan. (JW)

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