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Vietnam is a socialist republic. Until 1986, Vietnam had a centrally planned economy; however, in 1986, the country introduced a regime of economic reform, known as “doi moi”. The Government refers to this as a socialist-oriented market economy. Business in Vietnam changed in January 2007 when Vietnam acceded to the WTO, at which time, there were major changes in legislation in order for Vietnam to qualify for accession. Most commercial legislation in Vietnam is no more than six years old, and at the time it was introduced, it was considered a legislative revolution.

The National Assembly is the national legislature. It meets at least twice a year, comprises delegates from throughout the country (with various backgrounds and ethnicity) and is the only body with the power to promulgate laws.

The President (appointed by the National Assembly) is the head of the State and the representative of Vietnam in respect of internal and external issues. The President has a wide role and broad powers (although in practice many of those powers are formal) including being the head of the armed forces, and the ability to appoint and dismiss the Prime Minister and other senior appointments.

The Prime Minister is the head of the Government, which is the executive organ of the National Assembly and the highest State administrative organ in Vietnam. Currently, the Government comprises of 18 ministries and six equivalent authorities, including the State Bank of Vietnam.
Ministries and the Prime Minister regularly issue decrees providing regulations for the implementation of the laws.

Vietnam comprises 58 provinces and five centrally-run cities – Hanoi, Ho Chi Minh City, Haiphong, Danang and Can Tho. Each of these are administered by its provincial or city people’s committee, which are effectively a form of provincial or city government. Each province and city is divided into districts, each of which has its own people’s committee (analogous to local government).

The people’s committees in the various provinces administer most laws (including most foreign investment applications), however, there is often inconsistency between the application by the 63 provinces and cities.

The People’s Court including the Supreme Court, Provincial People’s Courts and People’s Courts at district level are judicial bodies.