World Economy

Vietnam Courting Investment

Vietnam Courting InvestmentVietnam Courting Investment

Vietnam has issued detailed regulations for foreign investors in 17 business sectors in a drive to improve the investment climate of a fast-growing country blighted by bureaucracy, but now seeing record inflows of foreign capital.

The new list of sectors specifies foreign investment ratios, the scope of investments and compliance with international trade rules and could help reassure businesses hesitant about setting up in the communist country due to its notorious paperwork, ambiguity and web of regulations and restrictions.

Despite expediting protracted reforms this year, including the opening of dozens of off-limit sectors and easing foreign ownership caps on equities, many potential investors have been waiting for Vietnam to put flesh on the bones of much of its new legislation.

The list includes real estate and providing services in tourism, entertainment, computing, research and development, information, leasing, transportation, construction, healthcare and trading, the foreign investment department said on its website.

Vietnam has seen a record rush of disbursed foreign investment this year, worth an estimated $14.5 billion, up 17.4% from the previous year, though pledges have eased slightly to $15.58 billion.

The bulk of that was into a swelling manufacturing sector dominated by textiles, footwear and electronics production for brands such as Samsung, Canon, Nike, Mango and Lacoste, helped by the prospect of tax-free exports under the Trans-Pacific Partnership and other trade pacts.

Now clearer are 100 sub-class areas involving providing services, production and trading open or closed to foreign investors. The list did not, however, mention some areas attractive to foreign firms, such as insurance and textiles.

Fields closed to foreigners include lotteries, radio and television broadcasts, operations of flights and key airports and national power transmission and regulation.