Solutions to FDI woes

Bui Ngoc Hong (R), partner of Indochine Counsel, talks to some participants at the Amcham business luncheon on Mar 7, 2012 in Ho Chi Minh City (Photo: Tuong Thuy)

Lawyer Bui Ngoc Hong, a partner of law firm Indochine Counsel and a member of the American Chamber of Commerce Vietnam (Amcham), suggested some solutions to the problems.

The scope of business activities was the first challenge, he said. “If you do something beyond activities allowed by the investment licence, it is an invalid transaction.” Investors must register the scope of business activities and for a trading company, and its list of products must be registered carefully, he said.

The second challenge is the charter capital because it is mentioned clearly in some business areas but in some others, it is not, the lawyer told a recently Amcham business luncheon. The third problem is what he called “evaluation procedure”. Hong said the registration step “is simple and may take 15 working days” or so.

For example, registration could be done at the Ho Chi Minh City Department of Planning and Investment, which in turn must submit the application dossier to “the line ministry”. Another often-faced challenge is the dossier, which Hong described as “a bulky, but perfect application dossier”.  If the dossier has a mistake, it will be returned to the investor, who has to make it right and re-submit it.

The company name was sometimes a problem, Hong said. His example was that one of his clients wanted to establish an advertising company with the world “Indochine” in its name.

“The client asked me if it was ok and I said ‘no problem’ as I thought so, because the two business areas are different. But the licencing authority denied because of the presence of the word, saying it could cause some misunderstanding. As for this case, the licencing authority may ask both sides to sign a document saying that if some problems happen because of the similar name, the two sides will be responsible,” said the lawyer.

He listed the 11 service sectors newly opened to foreign investors this year together with restrictions before 2012. He said many opportunities awaited foreign investors in 2012.

The service opportunities are in technical testing and analysis, services incidental to manufacturing, courier services, securities, marine transportation, maintenance and repair of aircraft and services incidental to mining.