Draft law opens up foreign ownership avenues
Draft law opens up foreign ownership avenues
The Ministry of Planning and Investment has published draft law amendments, with some articles focusing on making foreign capital flow more smoothly into investments and enterprises.
The amendments, which are open for public consultation, propose an abolition of 67 conditional businesses lines specified in Investment Law 2014. If the draft law is approved, foreign investors will now be able to take a majority stake in or wholly own these Vietnamese business.
According to Law on Investment 2014, conditional business lines are those in which the investment must satisfy certain conditions pertaining to national defence and security, social order and security, social ethics, or public health.
Among these 67 business lines, many sectors have attracted investor interest including debt trading services, operation of real estate exchanges, real estate valuation and brokerage, manufacture of gold bullions, coal trading, commercial assessment services, car warranty and maintenance services, import of radio transmitters and transceivers and plastic surgery services.
In addition, many service sectors related to food, health, animal, training and education and consultancy will be eased for foreign ownership.
Since September 1, 2015, Decree No 60/2015/ND-CP has allowed foreign investors to wholly own public domestic companies not subject to the conditional business lines of the Ministry of Planning and Investment.
However, the ministry has yet to introduce the official list. Until now, the Investment Law 2014 provides a list of 267 conditional business lines and industries, but this is not the list refereed to by Decree 60.
So far, only a few of enterprises have plans to raise their foreign holding to 100 per cent, while others are awaiting the official list. Many local firms are operating in several business lines with different provisions on the foreign ownership ratio.
Decree No 60, which scraps the cap on foreign ownership, has given a boost to foreign direct investment and has made the Vietnamese stock market a more popular destination.
The benchmark VN-Index has climbed over 15 per cent this year.
The draft law also allows fully-foreign ownership in economic organisations except for listed companies, public companies and securities and fund management companies which must comply with Securities Law.
Foreign holdings in equitised State-owned enterprises conform to law on equitisation and transformation of State-owned enterprises.
In addition, the ministry will also add 14 industries in the list of conditional business lines and industries, including management and operation of apartment buildings, registration and distribution of films, audit of energy, consulting of overseas study, trading in registration and maintenance of Internet domains.
