One of Resolution No. 68's goals is to reduce regulatory and administrative complexity. This echoes a bold initiative launched in 2007 called Project 30, an endeavour to streamline administrative procedures and cut through bureaucratic red tape. Project 30 had some level of success, but over time, overlapping and inconsistent regulations continued to be issued, with authorities continuing to exercise broad discretion in approval processes. If the ambitions of Resolution No. 68 - to have the private sector as the engine of national development - are to be achieved, it is critical to ensure that administrative reform tackles such bottlenecks and regulatory challenges.
Resolution No. 68 sits alongside the government's continued push for greater and more high-value foreign direct investment (FDI) into Vietnam. Indeed, for the private sector to become the key driver for economic growth in the country, it must remain attractive for foreign investors and human capital. Indeed, it is in relation to foreign investment where removing impediments would create the most positive outcome. For example, foreign investors may encounter different interpretations regarding the implementation of law, and approvals granted in one city or province may be denied or reinterpreted in another. This treatment of investors across key sectors like education, healthcare and retail introduces regulatory asymmetry leads to time consuming procedures and reduction in certainty of confidence.
Moreover, while developing consumer protection regulations – especially in response to new digital business – is both correct and laudable, the approval processes and extensive licensing requirements for relatively simple activities, such as leasing or retail (both online and offline), in Vietnam can be burdensome and unpredictable. In addition, a costly and time-consuming procedure continues to vex foreign investors: the mandatory consular legalisation of foreign documents. In an ever-increasing digital world in which 127 countries (with China being the latest adherent) do not require consular legislation of foreign documents, Vietnam risks being seen as less competitive when compared to other investment destinations for foreign investors.
In alignment with Resolution No. 68, which contains initiatives to tackle administrative and regulatory issues, we recommend five specific proposals that would help strengthen investor confidence and enable the vision of the government:
- Streamlining and standardisation of licensing criteria & implementation: Consistent with the message of Resolution No. 68, various approvals and registrations should be consolidated to ensure that application and approval processes are as time efficient as possible. In non-sensitive sectors (particularly those where 100% foreign ownership is permitted), transactions should be merely registrable after the event rather than requiring prior approval. The processing time for approvals should be shortened and, if the authorities have accepted an application dossier, requests for further information should not re-set any timelines.
- National digital standardisation of approvals: While investment approvals can be applied for online, in practice, hard copy documents are required to be delivered to the relevant departments. Although perhaps not easily achievable in the short term, Vietnam should nevertheless work towards having a fully centralised, national digital database, accessible in both English and Vietnamese. This would come to serve as a single one-stop portal that brings transparency to regulatory procedures and reduces institutional conflict. With AI integration, it would be able to neatly summarise relevant documents, flag potential issues, ensure uniform application of approval timelines and requirements, and offer precedent-based guidance in complex cases.
- No difference in treatment between foreign-invested and domestic-invested companies: Vietnam operates a system of foreign-ownership restrictions for all of its business sectors. However, certain other laws also impose different treatment on foreign-invested enterprises (FIEs). While in certain cases this may be justifiable, more generally speaking these laws serve only to impede investments by foreign investors, adding extra layers of uncertainty to straightforward transactions – for example, sub-licenses for retail outlets and the economic needs test. There should be a process to streamline such requirements.
- Follow international best practice: Principles-based regulation, such as those related to securities trading or competition law, cannot always anticipate every real-world scenario. Authorities should therefore publish and regularly update guidance (in both Vietnamese and English) on how such rules are applied in practice, especially in cases where a company may trigger a requirement on a mere technicality. Laws should include sensible, internationally consistent exemptions, and authorities should adopt a substance-over-form approach. For example, in developed markets, public takeovers often permit conditional offers to be launched before all regulatory approvals are secured – an internationally accepted standard that Vietnam could follow.
- Accession to the Apostille Convention: Vietnam should join the Apostille Convention. Doing so will demonstrate Vietnam's commitment to foreign investment and to regulatory modernisation. It will streamline processes that require the submission of foreign documents in Vietnam by eliminating the burdensome legalisation process. It would also be consistent with Vietnam's efforts over the past few years on entering into trade agreements with other countries.
Resolution No. 68 shows that there is a determination and vision for the success of private enterprise in Vietnam. By making bold steps to tackle administrative complexity and regulatory uncertainty surrounding FDIs, Vietnam will position itself well to turn that vision into reality.
