The State should provide more detailed regulations and guidance onhandling overseas investment activities for local enterprises in thelatest draft amending the Law on Investment, said an expert.
NguyenMai, chairman of the Vietnam Association of Foreign InvestedEnterprises (VAFIE), said State management of activities related tooverseas investment has been addressed by only a few regulations in thedraft, reported the Thoi bao Kinh te Viet Nam (Vietnam Economic Times)newspaper.
Meanwhile, the process for establishing enterprisesand the State management activities for those enterprises differcompletely according to whether the enterprise has an investment inVietnam or whether it has overseas investments, he stated.
If thecommittee compiling the draft wants to maintain the regulations onoverseas investment activities, the committee should create moredetailed regulations and guidance for these activities, Mai noted,adding because in the past, overseas investment activities werescattered, and it is unclear whether they brought any benefits to thecountry.
According to the latest statistics on investment inforeign territories and countries, released by the Ministry of Planningand Investment, Vietnam's enterprises backed 742 investment projects inforeign territories and countries in the first quarter of 2013, withtotal registered capital of 15.5 billion USD.
During the period2006-13, domestic firms made investments in 59 territories andcountries, of which the largest volume, 227 investment projects, wasmade in Laos, with total registered capital of 4.2 billion USD, and thesecond largest volume, 129 projects, was made in Cambodia, with totalregistered capital of 2.7 billion USD.
A total of 3.8 billion USDhas already been disbursed and includes 691 million USD sent to Laosand 621 million USD sent to Cambodia.
The disbursed investmentamount was 2.9 billion USD for the oil and gas sector, 500 million USDfor the rubber industry, 400 million USD for the hydro power sector and249 million USD for the telecom sector.
Overseas investmentactivities have surged over time, but the Law on Investment 2005 has notintroduced any strict regulations for these activities.
Accordingto the committee compiling the draft, there are no clear regulations onState management for overseas investment capital because each projectincludes investment capital that must be transferred from Vietnam toforeign territories and countries and investment capital that ismobilised in the foreign territories and countries where the project islocated.
In the coming period, the State will promote themanagement of the investment capital transferred from Vietnam to otherterritories and countries to ensure that the enterprises use it inaccordance with the Law on Investment, the committee stated.
DangHuy Dong, Deputy Minister of Planning and Investment, said that themanagement of overseas investment activities involved the management ofinvestment capital. So, the law should define which office manages theoverseas investment activities.
Dong also pointed out that thelaw should encourage enterprises to provide an initial investment in theproject and then mobilise more capital in the territories and countrieswhere the project is located.
Therefore, the State should manage real capital transferred to the project, not only the registered capital, he said.
InJanuary, the State Bank of Vietnam (SBV) issued Circular36/2013/TT-NHNN on the opening and usage of foreign currency accountsfor investment activities abroad.
Under the newly approvedcircular, after receiving a certificate for overseas investments, aninvestor must open an account for all transactions related toinvestments in foreign currencies at a competent credit institution.
Theinvestor will also have to register with the State Bank or its branchesin the provinces and cities. Investors with several overseas investmentprojects must open an account for each project.
If a projectreceives investments from multiple investors at home, each investor mustopen an account for his/her investment at the same competent creditinstitutions, in accordance with the investment certificate issued bythe authorised agencies of Vietnam.
The SBV's Department ofForeign Currency Management is in charge of verifying the registrationof overseas investments, account changes and capital transfers.
The circular came into effect on February 14, 2014.-VNA
NguyenMai, chairman of the Vietnam Association of Foreign InvestedEnterprises (VAFIE), said State management of activities related tooverseas investment has been addressed by only a few regulations in thedraft, reported the Thoi bao Kinh te Viet Nam (Vietnam Economic Times)newspaper.
Meanwhile, the process for establishing enterprisesand the State management activities for those enterprises differcompletely according to whether the enterprise has an investment inVietnam or whether it has overseas investments, he stated.
If thecommittee compiling the draft wants to maintain the regulations onoverseas investment activities, the committee should create moredetailed regulations and guidance for these activities, Mai noted,adding because in the past, overseas investment activities werescattered, and it is unclear whether they brought any benefits to thecountry.
According to the latest statistics on investment inforeign territories and countries, released by the Ministry of Planningand Investment, Vietnam's enterprises backed 742 investment projects inforeign territories and countries in the first quarter of 2013, withtotal registered capital of 15.5 billion USD.
During the period2006-13, domestic firms made investments in 59 territories andcountries, of which the largest volume, 227 investment projects, wasmade in Laos, with total registered capital of 4.2 billion USD, and thesecond largest volume, 129 projects, was made in Cambodia, with totalregistered capital of 2.7 billion USD.
A total of 3.8 billion USDhas already been disbursed and includes 691 million USD sent to Laosand 621 million USD sent to Cambodia.
The disbursed investmentamount was 2.9 billion USD for the oil and gas sector, 500 million USDfor the rubber industry, 400 million USD for the hydro power sector and249 million USD for the telecom sector.
Overseas investmentactivities have surged over time, but the Law on Investment 2005 has notintroduced any strict regulations for these activities.
Accordingto the committee compiling the draft, there are no clear regulations onState management for overseas investment capital because each projectincludes investment capital that must be transferred from Vietnam toforeign territories and countries and investment capital that ismobilised in the foreign territories and countries where the project islocated.
In the coming period, the State will promote themanagement of the investment capital transferred from Vietnam to otherterritories and countries to ensure that the enterprises use it inaccordance with the Law on Investment, the committee stated.
DangHuy Dong, Deputy Minister of Planning and Investment, said that themanagement of overseas investment activities involved the management ofinvestment capital. So, the law should define which office manages theoverseas investment activities.
Dong also pointed out that thelaw should encourage enterprises to provide an initial investment in theproject and then mobilise more capital in the territories and countrieswhere the project is located.
Therefore, the State should manage real capital transferred to the project, not only the registered capital, he said.
InJanuary, the State Bank of Vietnam (SBV) issued Circular36/2013/TT-NHNN on the opening and usage of foreign currency accountsfor investment activities abroad.
Under the newly approvedcircular, after receiving a certificate for overseas investments, aninvestor must open an account for all transactions related toinvestments in foreign currencies at a competent credit institution.
Theinvestor will also have to register with the State Bank or its branchesin the provinces and cities. Investors with several overseas investmentprojects must open an account for each project.
If a projectreceives investments from multiple investors at home, each investor mustopen an account for his/her investment at the same competent creditinstitutions, in accordance with the investment certificate issued bythe authorised agencies of Vietnam.
The SBV's Department ofForeign Currency Management is in charge of verifying the registrationof overseas investments, account changes and capital transfers.
The circular came into effect on February 14, 2014.-VNA
