Legal Regulations Still Constraining Businesses

Overview of the workshop on legal barriers to business 

This was shared by Mr. Dau Anh Tuan, Deputy General Secretary and Director of the Legal Department of VCCI, at the workshop on legal barriers to business, organized by the Vietnam Chamber of Commerce and Industry (VCCI) in coordination with the Ministry of Justice recently in Hanoi.

Business legal system lacks transparency and practicality

According to Mr. Dau Anh Tuan, there have been many reviews to address conflicts and overlaps between laws on investment, land, construction, and the environment, helping reduce procedures and save costs for businesses and society. However, it must be frankly acknowledged that the current business legal system remains complicated, lacks transparency and consistency and includes many aspects that are not aligned with reality.

Ms. Nguyen Thi Dieu Hong from the VCCI Legal Department said that VCCI has proactively gathered business feedback and identified more than 220 legal issues in both regulatory content and implementation. These issues stem from laws, decrees and circulars, mostly from long-standing decrees and rigid rules that raise costs and restrict business operations. Problems are also found in newly issued documents set to take effect in 2025. Notably, administrative procedures lack clarity and specificity and often lack guiding regulations; documents still require paper submissions, which do not match current digital transformation needs. Many procedures remain unnecessary, with unclear and inappropriate regulations.

According to the Vietnam Association of Foreign Invested Enterprises (VAFIE), some developed countries (such as Japan) currently have investment incentive programs that provide direct cash support for domestic enterprises’ investment projects, including those carried out abroad, such as in Vietnam. As a result, many FDI enterprises in Vietnam, established through these foreign investment projects, also receive direct subsidies from their home governments. However, under current corporate income tax regulations, such investment support is classified as other income and subject to a 20% tax rate (without preferential treatment). Applying this tax rate to foreign government support increases investor costs and reduces the effectiveness of these incentives, thereby weakening the attractiveness of Vietnam’s investment environment.

In the food sector, Mr. Nguyen Hong Uy, Head of the Technical Working Group of EuroCham Nutritional Foods Group (NFG), said that many administrative procedures in the draft amendment to Decree 15/2018/ND-CP are causing difficulties for businesses. For instance, the product registration dossier increased from 7 to 41 items (a rise of nearly 600%) with several unreasonable requirements such as production process descriptions, machinery types and technical parameters, which could risk revealing trade secrets.

In addition, the time required to complete procedures has significantly increased. The time to appraise the registration dossier rose by nearly 1,400% (from 7 to 90 days); self-declaration time increased from 1 to 21 days, up 2,100%, only to post on the system and plan for later review; inspection time for imported goods increased from 3 and 7 days to 7 and 15 days, more than doubling.

These regulations are inconsistent with the spirit of Politburo Resolutions 66 and 68, which emphasize “removing legal bottlenecks,” “shifting strongly from pre-inspection to post-inspection with strengthened supervision,” and “cutting at least 30% of administrative procedure processing time and legal compliance costs.”

Mr. Nguyen Hong Chung, Vice Chairman and Secretary General of the Vietnam Industrial Park Finance Association (VIPFA), said that although the investment licensing process in industrial parks has improved, there are still bottlenecks, especially due to overlapping and lengthy processing of key procedures, causing major difficulties for investors. These include overlaps and inconsistencies among the Investment Law, Land Law, Construction Law, and Environmental Protection Law. These are the core laws governing the entire life cycle of an investment project, yet their regulations on procedures, processes, and responsible authorities are not truly synchronized or connected.

In addition, the processing time for procedures remains long and lacks transparency. For example, access to land continues to be one of the biggest barriers for investors. From the approval of investment policies and planning to compensation, site clearance, land pricing, land allocation, land lease and the granting of Land Use Rights Certificates, each step carries the risk of delays. In particular, the determination of specific land prices using the appraisal method is still unclear and often delayed, preventing investors from promptly fulfilling financial obligations on land and moving forward with project implementation.

Consistent and transparent legal system needed

To remove obstacles and further improve the investment and business environment, according to Mr. Nguyen Hong Chung, Vietnam needs to complete and synchronize its legal system, urgently reviewing, amending and supplementing relevant laws, decrees, and circulars to ensure consistency, coherence and transparency, particularly harmonizing the Investment Law, Land Law, Construction Law, and Environmental Protection Law. The aim is to create a seamless process that minimizes time for investors. It is also important to issue detailed, easy-to-understand guidance documents and avoid general regulations that can lead to disputes in practice.

At the same time, it is essential to study and develop a centralized national legal database platform that is easy to search and regularly updated with investment and business-related regulations so businesses can access information in the most convenient and accurate way. Vietnam should continue cutting unnecessary administrative procedures, especially by reducing processing time for land and construction-related documents. It is also important to promote the application of information technology and fully digitize the process of receiving and handling documents to improve transparency and minimize direct contact between businesses and public officials.

In particular, it is essential to review and improve tax and customs policies, with a focus on clarifying the conditions for tax incentives to avoid differing interpretations and ensure policy stability and predictability, thereby enabling businesses to invest with confidence. At the same time, simplifying VAT refund procedures and shortening processing times will help ease cash flow pressures, especially for large investment projects, allowing businesses to reinvest and expand production.

According to Deputy Minister of Justice Nguyen Thanh Tu, problems caused by legal regulations must be addressed with determination and focus. Some solutions for resolving overlapping business laws include: interpreting the law, emphasizing communication, dissemination, and clarification of relevant legal provisions; guiding legal application by developing specific mechanisms and instructions; amending and supplementing legal documents, including researching and proposing changes to remove barriers; and issuing resolutions to address urgent matters.

Deputy Minister Nguyen Thanh Tu also said that from now until the end of the year, the Ministry of Justice will coordinate efforts to propose amendments to key laws such as the Investment Law, Land Law and Planning Law, to be submitted to the National Assembly at its October 2025 session. For urgent issues, a special mechanism may be applied through a Government Resolution.