chapter  12
17 Pages

Legal issues in Vietnam’s FDI law: protections under domestic law, bilateral investment treaties and sovereign guarantees

ByHOP DANG

Since the start of the Doi Moi (reform) pol icy in 1986, the Vietnamese eco­ nomy and soci ety have undergone funda mental changes. An im port ant part of such changes has been the growth of the FDI sector, which now accounts for almost 20 per cent of the total GDP of Vietnam (FIA 2011). According to the Foreign Investment Agency of Vietnam (FIA), Vietnam had licensed over 12,000 FDI pro jects by the end of 2010, with the total investment capital re gis tered exceeding US$190 billion (FIA 2011). These FDI pro jects have created millions of jobs, enabled the trans fer of modern tech no logy and management skills, produced new goods and ser vices, and have had many im port ant indirect effects on the Vietnamese eco nomy and society. The de velopment of the Vietnamese legal sys tem has played a crit ical part in the formation and growth of the FDI sector. In 1987, Vietnam enacted a short and simple Law on Foreign Investment which recog nized for the first time the legality of FDI in Vietnam. From that starting point, Vietnam has now de veloped a comprehensive and soph istic ated do mestic legal framework to regulate FDI ac tiv ities, comprising over 10,000 pieces of legis la tion dealing with almost every aspect of trade and commerce (Dang 2010). Gov­ ernment institutions and the court sys tem have gained much more ex peri­ ence in dealing with foreign investment related mat ters. Arbitration is also de veloping as a means of al tern ative dispute res olu tion. As a result, the exist­ ing legal framework and institutions are now able to address many legal un cer tainties and prob lems for which there were no answers in the 1990s.1