Draft intends approval streamlining

Draft intends approval streamlining

Further streamlining the approval process for investment planning is expected to ease various burdens, thereby accelerating the implementation of new developments.

The Ministry of Finance (MoF) is finalising amendments to the draft Law on Investment, which is slated for review in October. The ministry has also prepared a policy proposal dossier and sought opinions from relevant ministries, sectors, localities, and affected entities.

“The policy’s objective is to create a new breakthrough in reforming administrative requirements for investment activities, while enhancing the effectiveness and efficiency of state management of investment. It aims to improve the decentralisation mechanism for investment management, addressing bottlenecks and creating conditions for investors to carry out activities with simpler processes and lower costs,” said Deputy Minister of Finance Ho Sy Hung.

According to the MoF, numerous proposals have been put forward to address issues related to approvals. Three specific proposals include making related steps more efficient and enhancing decentralisation, abolishing the requirement entirely, and maintaining the current framework.

Hoang Manh Phuong, deputy director of the Legal Department under the MoF, said, “Reducing the steps for investment planning is considered one of the optimal and prioritised solutions in revising the Investment Law to address bottlenecks and unlock foreign capital soon.”

According to the MoF, changes will ensure that formal approval requirements will only apply to initiatives with significant environmental impacts or potential serious environmental consequences, those affecting national defence and security, and large-scale investment undertakings.

At the same time, the MoF proposes that the new law version promotes decentralisation and delegation of authority, thereby narrowing the scope of activities requiring central-level approval. The National Assembly will only green-light policies for ventures that require special policies necessitating its decision.

The authority to approve investment policies will continue to be delegated from the prime minister to people’s committees in localities for undertakings by foreign investors in sectors such as afforestation, betting operations, and offshore wind power under electricity regulations.

In practice, lengthy procedures extend timelines by several years and increase preparation costs, causing businesses to miss out on opportunities due to prolonged processing.

“The requirement to go through multiple steps and various related agencies before implementing an initiative does not add significant management value. This is because these aspects are already reviewed during the process of applying for land allocation, land lease, or construction permits under sector-specific laws. Additionally, this step duplicates the appraisal and approval processes, creating a burden for the private sector,” said Nguyen Van Toan, chairman of the Vietnam Association of Foreign Investment Enterprises.

“If this regulation is relaxed, it could reduce approximately 30 per cent of administrative processing time, at least 30 per cent of compliance costs, and at least 30 per cent of business conditions, depending on the type of activity. This translates to significant time and cost savings for investors, thereby accelerating implementation and enabling operations to commence sooner,” Toan added.

Economic expert Nguyen Dinh Cung said the approval of investment planning has affected investors and the business environment in general.

“Enterprises are forced to repeatedly supplement and adjust details, particularly regarding scale, progress, and timelines, creating additional risks for investors if there are changes compared to the policy. It also limits innovation and obscures management objectives,” Cung said.

For example, within the investment application, there is a requirement for enterprises to submit documents proving financial capacity, which may include financial statements for the last two years.

“This implies that the investor must have existed for at least two years. As a result, newly established private enterprises within two years are automatically ineligible to invest or even prepare an application, let alone receive approval,” Cung explained.

VIR