People in Haiti use Viettel SIM cards. Expert said that the State should provide more detailed guidance on handling overseas investment activities for local enterprises. — VNS Photo Courtesy of Viettel

HA NOI (Biz Hub) — The State should provide more detailed regulations and guidance on handling overseas investment activities for local enterprises in the latest draft amending the Law on Investment, said an expert.

Nguyen Mai, chairman of the Viet Nam Association of Foreign Invested Enterprises (VAFIE), said State management of activities related to overseas investment has been addressed by only a few regulations in the draft, reported the Thoi bao Kinh te Viet Nam (VnEconomy) newspaper.

Meanwhile, the process for establishing enterprises and the State management activities for those enterprises differ completely according to whether the enterprise has an investment in Viet Nam or whether it has overseas investments, he stated.

If the committee compiling the draft wants to maintain the regulations on overseas investment activities, the committee should create more detailed regulations and guidance for these activities, Mai noted, adding because in the past, overseas investment activities were scattered, and it is unclear whether they brought any benefits to the country.

According to the latest statistics on investment in foreign territories and countries, released by the Ministry of Planning and Investment, Viet Nam's enterprises backed 742 investment projects in foreign territories and countries in the first quarter of 2013, with total registered capital of US$15.5 billion.

During the period 2006-13, domestic firms made investments in 59 territories and countries, of which the largest volume, 227 investment projects, was made in Laos, with total registered capital of $4.2 billion, and the second largest volume, 129 projects, was made in Cambodia, with total registered capital of $2.7 billion.

A total of $3.8 billion has already been disbursed and includes $691 million sent to Laos and $621 million sent to Cambodia.

The disbursed investment amount was $2.9 billion for the oil and gas sector, $500 million for the rubber industry, $400 million for the hydro power sector and $249 million for the telecom sector.

Overseas investment activities have surged over time, but the Law on Investment 2005 has not introduced any strict regulations for these activities.

According to the committee compiling the draft, there are no clear regulations on State management for overseas investment capital because each project includes investment capital that must be transferred from Viet Nam to foreign territories and countries and investment capital that is mobilised in the foreign territories and countries where the project is located.

In the coming period, the State will promote the management of the investment capital transferred from Viet Nam to other territories and countries to ensure that the enterprises use it in accordance with the Law on Investment, the committee stated.

Dang Huy Dong, deputy minister of planning and investment, said that the management of overseas investment activities involved the management of investment capital. So, the law should define which office manages the overseas investment activities.

Dong also pointed out that the law should encourage enterprises to provide an initial investment in the project and then mobilise more capital in the territories and countries where the project is located.

Therefore, the State should manage real capital transferred to the project, not only the registered capital, he said.

In January, the State Bank of Viet Nam (SBV) issued Circular 36/2013/TT-NHNN on the opening and usage of foreign currency accounts for investment activities abroad.

Under the newly approved circular, after receiving a certificate for overseas investments, an investor must open an account for all transactions related to investments in foreign currencies at a competent credit institution.

The investor will also have to register with the State Bank or its branches in the provinces and cities. Investors with several overseas investment projects must open an account for each project.

If a project receives investments from multiple investors at home, each investor must open an account for his/her investment at the same competent credit institutions, in accordance with the investment certificate issued by the authorised agencies of Viet Nam.

The SBV's Department of Foreign Currency Management is in charge of verifying the registration of overseas investments, account changes and capital transfers.

The circular came into effect on February 14, 2014. — VNS