Local government agencies’ excessive administrative intervention in enterprises’ investment and business activities, together with the discrimination against small and medium-sized enterprises, remain the primary concerns of domestic businesses…
To gain a deeper and more comprehensive understanding of these concerns, Thuong Gia had a conversation at the beginning of the Year of the Dragon with Lawyer Nguyen Tien Lap – Member of NHQuang & Associates, Arbitrator of the Vietnam International Arbitration Centre (VIAC). It is hoped that his sharing will be considered by competent authorities and translated into appropriate policies to create more favorable conditions for the business community…
Could you tell us what brought you to the legal profession?
Well, everything begins with fate. I became a legal consultant in investment and business after nearly eight years working at the Ministry of Justice. That was in 1994, the time when Vietnam’s economy was taking off after several years of Doi Moi and opening up, marked by the development of the private sector and the attraction of foreign investment. The whole country was filled with optimism and positive energy. At that time, I was fortunate to be in charge of the legal division of Investconsult Group, one of the first foreign investment consultancy firms established in Vietnam.
It was there that I truly grew into the legal profession, being among the earliest Vietnamese lawyers to work alongside international lawyers from renowned firms such as Deacons, Baker & McKenzie, Clifford Chance, Coudert Brothers, and Freshfields. During 17 years working there, I co-founded and became the first Managing Director of Investconsult Legal Services, later serving as Deputy General Director and Vice President of Investconsult Group. In addition, besides being a member of the Bar Association, I was actively engaged in the Vietnam Lawyers Association’s activities, helping to establish and serving as Deputy Head of the International Department of the Hanoi Lawyers Association.
Since 2010, I have been a Senior Partner at NHQuang & Associates, a law office combining legal practice with institutional and legal reform research, with extensive experience in Vietnam.
Beyond my legal practice, driven by passion for the profession, I have also taught for many years at the Faculty of Law, Vietnam National University Hanoi, lectured on The Legal Environment in Business at the British University Vietnam, and served as an Arbitrator at VIAC…
Throughout your professional career, you have made many contributions to the development of Vietnam’s business community, especially through opinions and recommendations in the formulation and improvement of the legal system on investment and business. Could you share some of the most notable highlights?
If counted from 1986, when I began working at the Ministry of Justice, my career has been closely tied to the country’s reform and development process. Early on, at the Department of Civil-Economic Law, I had the opportunity to directly participate in drafting the Ordinance on Economic Contracts and the Ordinance on Economic Arbitration – the first legal documents reflecting policies of transition from a centrally planned economy to a market economy. Later, I contributed to drafting the first Civil Code, the Law on Companies, and the Law on Private Enterprises (1990), which laid the foundation for Vietnam’s professional private economy and civil orientation. I continued contributing to the drafting of investment and enterprise laws, bringing perspectives as a lawyer, consultant, and practitioner.
I recall in 2004, when the issue of merging investment and enterprise laws into a unified Investment Law and Enterprise Law was discussed, I argued in my written submission that it should not be seen as a mere horizontal merger, but that the Enterprise Law and the Law on Domestic Investment Promotion should be maintained.
This meant that when revising the Enterprise Law and promulgating the Investment Law, other related laws such as the State-Owned Enterprise Law and the Foreign Investment Law should be repealed. The reason was that in legal reform, there must always be a strong pillar ensuring the stability and continuity of the legal system. At the same time, the spirit of the Investment Law must be one of equal treatment between domestic and foreign investment.
In subsequent years, through nearly 200 published articles, I engaged in discussions on drafting or amending many economic and environmental laws. Notably, during the debate on the Public-Private Partnership (PPP) Law, I persistently advocated abolishing BT (build-transfer) contracts, as they had become unsuitable and generated many consequences, particularly under weak oversight. I proposed shifting the approach so that PPP projects would be based on project finance (cash-flow-based) rather than the mere financial capacity of investors, who in essence act only as project developers in the initial stage.
Regarding the Law on Environmental Protection (2020), based on my experience representing disadvantaged pollution victims in civil cases, I recommended adding a specific mechanism different from traditional civil procedures, whereby plaintiffs would not be required to prove causality between pollution acts and resulting damages. I was very pleased and proud that both these proposals were adopted by the drafting body and approved by the National Assembly.
Following your outspoken and dedicated contributions to lawmaking, one can see you remain deeply concerned about building and improving the legal system and creating a safe and favorable business environment. Could you share more about these concerns?
There are many concerns. They naturally arise when I compare what I have studied and experienced abroad with domestic realities. I see a vast gap between Vietnam’s human and natural potential and its current poverty and underdevelopment. Why is this so? Looking back at history, we all know the “Household Contract” initiative of Provincial Party Secretary Kim Ngoc in the 1960s, which sparked breakthroughs in agricultural policy, allowing farmers to work their own land and escape hunger. The root lies in institutions, policies, and law. Having been formally trained in law, I have always been driven by the question: How can I contribute to the great reform cause of building our shared home, the nation of Vietnam?
I believe foreign investment is only a starting point, a stimulant; domestic investment and enterprises are fundamental. For this, utmost efforts must go into fostering the private sector, because by nature, that is the true economy. The private economy is grounded on legal protection of citizens’ right to do business, allowing them to engage in anything not prohibited by law.
But affirming this right on paper is not enough. A whole system of policies and mechanisms must be built to protect, encourage, and promote it. For example, while much focus has been placed on reducing licensing barriers, administrative procedures, and business conditions, I believe more persistent, systematic efforts are needed to establish four structural pillars for private sector development: access to land, access to capital, property rights, and contract enforcement.
Unfortunately, more than thirty years into Doi Moi, these four pillars are still under construction—or even being built and repaired at the same time. Land access for small and medium enterprises remains a challenge. Even when land is secured, exercising property rights—use and disposal—remains difficult. After many amendments to the Land Law, we still cannot clearly differentiate between land ownership and ownership of assets on land, where the latter must be prioritized. In terms of capital markets, the corporate bond incidents show a lack of professionalism and excessive risks.
As for contract enforcement, Vietnam still lacks a transparent and effective civil-commercial judiciary. By international standards, commercial arbitration should be the predominant dispute resolution method for the private sector. Yet in Vietnam today, arbitration accounts for less than 1% of cases compared to the courts.
Overall, my greatest concern is that while Vietnam has a legal system, building a true Socialist Rule-of-Law State still faces many challenges and requires enormous determination. That is the crucial institutional strength for development.
Yet despite these concerns, from an analytical perspective, I understand both the causes and the context. The country is like a body undergoing painful transformation, with the hardest challenge being renewal of governance and development mindset. That means acceptance, patience, contribution, and belief in a better future.
In your work advising and supporting businesses, what concerns have you observed among the business community regarding the legal and policy framework for investment and business?
As a legal consultant, I have worked with businesses for many years. For foreign enterprises, two main obstacles are often cited. First, the instability of the policy and legal framework—some foreign lawyers have openly said what they fear most is each time a law is amended. Second, the unpredictability and inefficiency of judicial procedures.
For domestic enterprises, there are also two persistent concerns, though from a different perspective:
First, why do State agencies, especially local governments, continue to interfere so deeply in enterprises’ investment and business activities? A typical example is project management and inspection procedures. At a consultation on amending the Investment Law, I once asked the drafting body: In a market economy, whose investment is it— the State’s or the enterprise’s? If it belongs to the enterprise, then perhaps it is time to reconsider whether the Investment Law should remain as an administrative management tool.
In long-standing market economies, the State regulates investment and business mainly through two measures: establishing technical, social, and environmental standards that enterprises must comply with, and prescribing sanctions for violations. On this basis, social forces and consumers help monitor compliance, rather than leaving everything to government bureaucracy.
Second, small and medium-sized enterprises (SMEs), which make up the majority in terms of numbers, continue to face discrimination and unequal access to economic resources. Consequently, they have become the “weaker group” compared to large domestic corporations and foreign-invested enterprises. In practice, we even have a law supporting SMEs and a dedicated financial fund for them.
However, the problem lies in mindset and attitude. SMEs are still undervalued and not considered important for national economic development. It should be the opposite. In all developed economies, SMEs are recognized as the backbone—the cradle of sustainable jobs and the origin of innovation.
In conclusion, I believe transforming people’s concerns into motivation for reform and development requires open, sincere, and regular dialogues between the Government, authorities at all levels, social groups, and the business community. Such dialogues, once organized in the past, are now more necessary than ever.
Thank you very much!
By Viet Anh, Thuong Gia Magazine, February 6, 2024 (Vietnamese only)