New breakthrough in improving business investment environment

Monday, 2020-07-06 17:13:38
 Font Size:     |        Print
 

The amendments to the Investment Law and the Enterprise Law on this occasion was to timely and fully institutionalise the Party’s resolutions, creating a strong motivational environment for the country's economic development in the time to come. (Photo: vtv.vn)
 Font Size:     |  

NDO - An amended Investment Law and revised Enterprise Law have recently been approved by the National Assembly and will take effect from January 1, 2021, opening expectations of a breakthrough in improving the business investment environment, as well as promoting stronger development in both the quality and quantity of enterprises.

The main point of the Investment Law is to reduce up to 22 conditional business lines, abolish unnecessary administrative procedures on the approval of investment policies with individuals and households in line with an open, convenient, attractive and transparent spirit in investment and business activities. At the same time, it also helps resolve many legal conflicts due to the overlap and problems between specialised laws, especially in the field of construction and land, the cause of several bottlenecks in the processing of large-scale projects that many localities and businesses are facing.

In order to ensure selective attraction of foreign direct investment (FDI), the Investment Law completes regulations on industries and trades eligible for investment incentives by strongly promoting research and development activities; manufacturing and trading products formed from scientific research results; producing products or providing services participating in value chains and industry clusters; amending and supplementing a number of provisions on the competence and procedures for approving investment policies; improving the transparency of and simplifying procedures for implementing the investment activities of foreign investors and economic organisations with foreign investment, among others.

Similarly, the Enterprise Law also creates more favourable conditions for businesses, contributing to drastically improving the business investment environment and national competitiveness. Accordingly, it is expected to further reduce barriers in order to help businesses enter the market and improve corporate governance, as well as protect minority shareholders.

Specifically, enterprises do not have to notify the seal sample to the business registration authority before using it; there will also be no need to submit additional paper documents when carrying out business registration procedures because the Enterprise Law has supplemented the regulations on establishing enterprise registration mechanisms via electronic documents in order to reduce administrative procedures, contributing to cutting expenses for enterprises to enter the market.

For state-owned enterprises, the law supplements a provision on the disclosure of enterprise information and accountability, ensuring equality with enterprises of other economic sectors.

Notably, the Enterprise Law also completes the legal framework for corporate governance according to international standards by providing regulations to improve shareholder protection mechanisms at joint stock companies through expanding the rights and scope of individual and groups of shareholders in accessing information about the operations of the company.

This will reduce the requirement for a large shareholding ratio from 10% to 5%, while removing the requirement to own shares continuously for six months or more. This mechanism will contribute to encourage small shareholders to feel more secure and have more motivation to invest in businesses as well as limiting abuse of power and control by larger groups of shareholders.

As two important laws with a profound impact on the business investment environment in general and the operation of enterprises in particular, the Law on Investment and the Law on Enterprises have been continuously improved in recent years to be further in line with the orientation of socio-economic development of the country, meeting the requirements of attracting investment and business development in each period.

As a result, the business investment environment has witnessed many positive changes. The number of active enterprises had reached over 750,000 by the end of 2019 whilst FDI attraction has continuously achieved new records. According to some economic experts, the amendments to the Investment Law and the Enterprise Law on this occasion was to timely and fully institutionalise the Party’s resolutions, creating a strong motivational environment for the country's economic development in the time to come.