HANOI, Feb. 15 (VNA): The Investment Law, which was passed by the National Assembly late last year and will take effect on July 1, is expected to help strongly improve the investment environment in Viet Nam by infusing a new vital force into the securities market.
With regard to the investment environment, the law makes an important contribution by forming a common playground for all investors on the basis of WTO principles such as the most- favoured nation, and publicity and transparency principles.
The law is the first legal document built on the principle of absolute equality in terms of competitive opportunities and conditions. The exception and special policies for domestic or foreign investors have been defined properly and clearly, with a roadmap to abolish these policies.
On the basis of separating State management from business management, the role of State management stipulated by the law has been improved with the State playing the role of supporting, assisting and ensuring the strict enforcement of law, and not to interfere into business management work.
For the securities market, the abolishment of differences in regulations on business establishment, forms of business, and business management for domestic and foreign businesses will be the basis for more foreign invested companies to be equitised. To date, only some of about 5,000 foreign invested companies have been equitised on trial.
With the enforcement of the law, a large number of foreign investors are expected to take part in the securities market, helping heat up the young stock market in Viet Nam.
The law has stipulations to allow investors to implement forms of indirect investment in Viet Nam's territories through different financial tools such as purchasing shares, holdings, bonds and other value-fixed certificates; the stock investment fund; and intermediary financial institutions. In addition, stipulations on capital contribution, purchase of shares and the merging and purchasing of businesses will also help increase both the demand and supply for the securities market.
The participation of several international financial organisations and banks in a direct investment conference held recently in Ho Chi Minh City helped to confirm the attractiveness of the securities sector to foreign investors, according to Head of the State Securities Commission Tran Xuan Ha.
The majority of international investors, who consider Viet Nam a potential investment destination, have attached great importance to shares of Vietnamese businesses listed on the stock market due to the securities market's capacity to post further development.
Additionally, instead of restricting the capital investment of foreign investors at a maximum of 49 per cent of the total capital investment of local enterprises, the Investment Law restricts only certain areas. The move will offer international investors more investment opportunities.
To boost the securities sector's development, relevant ministries and agencies need to make greater efforts, said Ha.