When Ho Chi Minh City's Binh Chanh District administration last September stopped issuing licenses to firms trading in building materials in the district's Vinh Loc A, Vinh Loc B and Binh Hung communes, it raised hackles among the business community.
The district administration said the temporary stoppage was part of its efforts to stop the almost out-of-control trade in land. Officials said the building material shops were fuelling the land sales, and that there was no reason to have so many shops in an area dominated by farming.
The measures were revoked a few months ago, with authorities saying the situation had been corrected.
However, a legal expert with the HCMC chapter of the Vietnam Chamber of Commerce and Industry (VCCI) said the move aimed to block businesses engaged in trading which were protected by Vietnamese trade regulations.
The trade in construction materials did not fall under restricted trades and businesses, so the district administration's decision violated the law, said the expert who did not want to be named.
Local businesses say there are several such restrictions imposed on them that contravene existing rules, and that the government should focus instead on opening more doors to create a fair environment for all economic sectors to function more freely in the market.
Advertising firms, for instance, have complained that a decision by the HCMC government last year to ban advertising on buses conflicted with higher-level regulations in the Advertising Ordinance that allows for ads to be placed on public transportation vehicles.
The HCMC government's decision was a restriction on their business, the ad firms said.
Hanoi-based lawyer Tran Vu Hai said limiting the freedom of business in supplying products or services in a WTO-member nation like Vietnam was unreasonable, and created disadvantages for Vietnamese businesses.
For instance, Hai said, the market for marriage brokerage services involving foreigners was currently closed to local businesses.
He noted that the service matching Korean men with Vietnamese women was a lucrative one, but it was only offered by brokers outside the country and closed to Vietnamese businesses.
Another service that was banned for local businesses was the provision of private detective services that were needed in many areas including his own, Hai said.
A lawyer could not protect his clients effectively in court if he failed to show evidence that could only be found through detective services, he said.
Hai's colleague in HCMC, Truong Thi Hoa, said freedom of business was limited in Vietnam as local authorities were not skilled to deal with issues beyond their brief.
A distinction should be made between legal violations and banned products, she said. For example, prostitution in karaoke parlors is a violation of the law, but karaoke itself is a normal business service and should not be restricted.
Hoa told Thanh Nien Weekly that the government should shorten the list of banned businesses and give more freedom to local entrepreneurs.
"Instead of bans, the government should issue requirements that businesses must meet if they want to join," said Hoa, who is a member of the HCMC Lawyers Association.
She said the requirements would help local businesses improve themselves instead of bans that would kill initiatives.
A source from the Ministry of Industry and Trade said there were about 100 documents issued by the government so far on products and services that are banned, as well as limitations and requirements imposed on participation by Vietnamese traders.
For example, the government bans trading in dangerous products like weapons, fireworks, drugs, imported tobacco, rare animals and plants. Vietnamese firms are also banned from offering gambling services, marriage brokering for profit, and detective work that infringes on the state's functions or someone's legal rights.
It allows businesses, with limitations, to run services like karaoke, discotheque and massage parlors; or to trade in industrial chemicals and cigarettes.
Trading is allowed, with specific requirements to be met, in petrol, films, medicines and other healthcare products.
Truong Quang Hoai Nam, head of the ministry's Domestic Market Department, said there were proposals to add some other products and services, like trading in precious metals at informal exchanges, and ship demolition services.
There were also proposals to impose more requirements on helmets, shipbuilding and maritime registration services, he said.
Tran Huu Huynh, head of VCCI's Legal Department, said National Assembly representatives should heed the call of businesses for more freedom in trading and ask the government to act on it, bringing its list of bans, requirements and other stipulations in line with the international community.