“Foreign investors are facing a much more difficult regulatory environment than domestic investors,” Edmund Malesky, a lecturer at the University of California, San Diego, told a conference in Hanoi today. He was lead researcher on the study by the Vietnam Chamber of Commerce and Industry and the U.S. Agency for International Development.

“It takes twice as long for foreign investors” to start a business, Malesky said. That’s “to some extent disappointing” given Vietnam’s commitments to the World Trade Organization, he said.

Vietnam joined the WTO in January 2007 and has been trying to attract overseas investment to create more jobs and boost economic growth. Pledged foreign direct investment dropped 32 percent to about $1.56 billion in the first two months of 2011 compared with a year earlier, the government said on March 2.

Out of 1,155 foreign-invested enterprises surveyed in August, 64 percent said they had to wait over a month to receive complete legal clearance, compared with 32 percent of the 7,300 domestic companies surveyed in May 2010, according the study.

Foreign businesses are inspected two to five times per year, while domestic companies are checked about 1.5 times on average, the report said. One-third of the foreign enterprises surveyed had certificates conferring the right to use land, compared with 53 percent of domestic companies, the report shows.

By Diep Ngoc Pham - Bloomberg - March 18, 2011