Vietnam’s legislators have narrowed the list of investments banned in the country, freeing up businesses to pursue opportunities outside the scope of their past experience.
The amended Business Law allows businesses to engage in any practice that is not specifically illegal, instead of limiting them to the scope of commercial activity listed in their business license.
The list of illegal business activities was narrowed from 51 to 6--namely, the trade in prostitution, narcotics, rare minerals, wildlife, endangered plants, human beings and human reproductive materials.
Nguyen Dinh Cung, head of the Central Institute for Economic Management, which drafted the bill for the Ministry of Investment and Planning, said the new law aims to offer businesses greater flexibility.
Since 2005, firms operating in Vietnam have had to apply for specific licenses -- making engaging in businesses outside the scope of one's license a criminal offense.
“Some companies saw new business opportunities, but had to wait to amend their registration. However, by the time that process was over, the opportunity had sometimes passed,” Cung said.
Bui Quang Vinh, Minister of Investment and Planning, said the new law represents a bold new direction.
Vinh said it gives businesses as many options as they want, as long as they stay away from the the six prohibited activities.
Under the old law, a company would have to go through a raft of administrative procedures every time it wanted to move into a new field of business.
Also, the old law listed permitted specific kinds of business but couldn't specifically list all of them, given the ever-changing nature of the global economy.
Those who attempted to register for a business that was not specifically allowed by the law were subjected to an arbitrary decision-making process, Vinh said.
Officials were also able to cause businesses trouble in more opaque ways, he said.
Councilor Tran Du Lich of Ho Chi Minh City suggested that many foreign countries force banks to offer supportive loans to start-up businesses.
“In other countries, banks are forced to support beginners in a business as a kind of investment, but we have not paid attention to this,” Lich said.