After the National Assembly of Vietnam halted passing the draft law on Special Economic Zones, almost all real estate transactions in Van Don and Bac Van Phong froze with investors and estate agents withdrawing from the market.
The recently overheated matter of a land lease term of 99 years applying at special economic zones on a trial basis has been affirmed to be shortened but the draft law on Special Administrative-Economic Units remains not to be approved in this plenary session of the National Assembly.
Enthusiasm for real estate in special economic zones might seem justified when considering the impressive plans, but investors should listen to skeptical voices as well.
Despite generous investment incentives, formerly-established open economic zones in Vietnam are still ineffective and cannot become a new engine for growth.
Vietnam National Assembly and the Government should carefully review tax incentives in future special economic zones to avoid budget losses and negative socio-economic impacts, according to Nguyen Thu Huong, senior manager of Oxfam.
Local authorities are enforcing orders to temporarily cease the transfer, conversion of land use purpose and modification of land ownership after a dramatic increase in land prices in the future special economic zones (SEZs) such as Van Don, Phu Quoc and Northern Van Phong.
The latest draft law of the special economic zones has been amended based on the opinions of several members of the National Assembly to reduce incentives for several investment projects including casino, tourism and entertainment services.
Without both of economic incentives and a special administrative institution, the special economic zone will hardly be able to sustain its appeal, according to experts.
The land fever in special economic zones may put investors at risks, cause problems for land clearance, and even reduce the appeal of those zones to strategic investors.
Former Deputy Minister of Natural Resources and Environment said that the allocation of land to investors in the special economic zones (SEZs) with a longer period of time will create more valuable real estates.
Two options for establishment of the organization model of local government based on the draft Law on Special Administrative-Economic Units (hereinafter referred to as special economic zones - SEZs), were submitted to the National Assembly for review, thereby provoking controversy.
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Preferential policies related to land, land-attached assets in the draft Law on Special Administrative-Economic Units (hereinafter referred to as special economic zones - SEZs) has provoked different controversies.
Former Deputy Prime Minister Vu Khoan stated that Vietnam’s current thinking model is an inverted pyramid. The topmost thinking takes up too much time while the longer we think, the more we will lag behind.
According to Luu Bich Ho, former Director of Development Strategy Institute, Ministry of Planning and Investment, because of the perception, thought and interest of law enforcement agencies, special economic zone (SEZ) of Vietnam has not reached the highest level of business liberalization to compete and attract investment.
