7 July 2010 | By: Mohamed Hairul Borhan

Vietnam’s Investment Law, which was introduced to encourage investment into the country, has since incurred a series of backlash from various parties, with the main bugbear being that the Law contradicts and overlaps other business-related laws, resulting in confusion and delays.

A report by the Business Information Center at the Vietnam Chamber of Commerce said in 2008 that ambiguities in the Law are easily exposed, and it conflicts with other related laws such as the Land Law, the Environmental Law and the Construction Law.

Its statement supports the findings released by the Task Force for Implementing the Enterprise Law and Investment Law, which is headed by the Ministry of Planning and Investment.

It said that investors and other government agencies find it difficult to implement the Investment Law, and that the Law has failed in its role to adjust the governance of investment in Vietnam.

According to a member of the Task Force, a glaring example of the ineffectiveness of the Investment Law is its failure to restrict the number of similar projects located near each other to prevent capital waste and unnecessary competition.

Another issue with the Investment Law is that the ambiguous regulations under the Investment Law have resulted in several interpretations by the various licensing agencies, resulting in delays as they would have to seek instructions from higher authorities.

The International Finance Corporation, the private sector arm of the World Bank Group, had previously issued a report that some investors in Vietnam had to wait about 451 days to receive a project license, including numerous visits to government agencies and multiple submissions of documents.

Cao Ba Khoat, director for Hanoi-based K & Associates Co, said that the Investment law “messed everything up” and that there need not be an Investment Law in the first place as many investment-related issues including construction, land use, and environmental protection can be monitored by their corresponding laws.