More clarity needed to ease investment procedures in Vietnam
VCCI's research found that investors frequently struggle to navigate overlapping and frequently amended laws. — VNA/VNS
HANOI: Administrative bottlenecks continue to burden investment projects, despite recent reforms aimed at streamlining procedures, according to the Vietnam Chamber of Commerce and Industry (VCCI).
At the launch of its 2024 Legal Development Report, VCCI highlighted the 'green-lane' investment mechanism as a rare positive development in an otherwise complex regulatory landscape.
The streamlined process was introduced to amend the law on investment, and came into force earlier this year.
Under the mechanism, investors are required to complete only two procedures: obtaining an investment registration certificate and an environmental permit.
Other approvals, including those for construction, fire safety and technology assessment, are handled post-licensing.
According to the law's drafting committee, the process cuts administrative time by up to 260 days, reducing it to just 15 days.
However, the green-lane route is currently limited to certain sectors and geographic areas, such as industrial parks and high-tech zones.
Nguyen Thi Dieu Hong, legal expert at VCCI's Legal Department, noted that even this significant time saving only serves to highlight the scale of delays under the standard process.
'For a typical land-use project, an investor must complete at least 15 separate procedures in the preparation phase alone,' she said.
'These involve multiple laws, on investment, land, construction, environment, planning, fire prevention, and require working with agencies at both the central and local levels.'
Despite government efforts to decentralise, many projects still need approval at both levels, further complicating implementation.
VCCI's research found that investors frequently struggle to navigate overlapping and frequently amended laws.
A single project may fall under 12 laws and 20 decrees or circulars, in addition to local rules.
'There is no single legal document that clearly outlines the steps and procedures for implementing a project,' Hong said.
'Investors must interpret everything themselves, which is particularly challenging for newcomers or foreign businesses,' she added.
Some procedures, such as land auctions or selection of investors through bidding, lack clear deadlines and depend entirely on local decisions, according to the research.
Others, such as environmental impact assessments, have defined time frames, but delays are common and often ripple through other dependent procedures.
Hong added: 'Our surveys show that for land-use projects, the process typically takes between 18 to 24 months if things go smoothly. On average, it takes two to three years just to complete administrative requirements before project implementation can begin.'
The burden of complex procedures is reflected in the 2023 Provincial Competitiveness Index, which surveyed 10,000 businesses.
The report found that 73% of enterprises had postponed or cancelled business plans due to difficulties with land-related procedures.
The findings also revealed that 64% of firms experienced delays beyond legal timelines, and 44% pointed to excessive delays in land valuation. — Viet Nam News/ANN
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