The country has pushed back a new law restricting the imports of used equipment

Sep 4, 2014 13:44 GMT  ·  By

The Vietnamese government has delayed the adoption of new laws that would prevent companies based overseas from bringing used equipment in the country, in order to allow Microsoft to expand local production.

Whereas such a decision could make some raise an eyebrow as to why exactly the government has accepted to push back new regulations just because Microsoft is looking to boost production in the country, the software giant says that the number of local manufacturing lines could be increased from 6 to 39.

According to VietnamNet, under the new regulation, officially called Circular No. 20, used machines and production equipment are allowed in the country only if they’re at least 80 percent new and haven’t been used more than 5 years.

Microsoft's production lines, which have been relocated from closed Nokia factories to the one in Bac Ninh in Vietnam, do not meet these regulations, but for some reasons, which some say are closely related to the number of jobs that the company could create in the country, local authorities have decided to delay the adoption of the new laws. Initially, Circular No. 20 was projected to come into effect on September 1.

This solution has been reportedly proposed by the Ministry of Science and Technology and has already received the Prime Minister’s approval, which means that Microsoft can continue the process of bringing the necessary equipment in the country.

There’s no doubt that Microsoft’s financial power is really a decisive factor, especially when dealing with state governments, but Vietnamese media is now wondering how come local authorities are making such an exception for the software giant.

In fact, the biggest problem with the new laws is that they could reduce the number of companies investing in Vietnam, as everyone is now forced to purchase new equipment whenever they want to start or boost production in the country.

Vietnam is a very attractive market for tech giants across the world pretty much thanks to cheap labor, and Microsoft clearly spotted the opportunity of relocating production of smartphones from other countries to this specific location.

Microsoft purchased Nokia earlier this year, and as part of the takeover, the company is closing some factories, while also firing 18,000 people, 12,000 of which come from the Finnish smartphone manufacturer. The new CEO Satya Nadella announced the layoffs a couple of months ago, explaining that the company’s reorganization was part of Microsoft’s plan to switch the focus on mobile devices and integrate Nokia’s Devices and Services unit as fast as possible.