The Politburo issued a Resolution on foreign investment cooperation.

On August 20, 2019, on behalf of the Politburo, General Secretary Nguyen Phu Trong signed and issued Resolution No. 50-NQ/TW on orientations for perfecting institutions and policies, improving the quality and effectiveness of foreign investment cooperation by 2030. Nghe An Newspaper respectfully introduces the full text of the Resolution:

I- SITUATION AND CAUSES

1. Over the past 30 years of innovation, our Party and State have issued many policies and laws to attract and manage foreign investment, create a favorable investment and business environment, and gradually approach international practices. The foreign-invested economic sector has developed rapidly and effectively, becoming an important part of the economy, making a positive contribution to the country's socio-economic development.

Foreign investment activities are increasingly vibrant, many multinational corporations, large enterprises with modern technology invest in our country; capital scale and project quality increase, contributing to creating jobs and income for workers; improving production capacity and skills; increasing state budget revenue, stabilizing the macro economy; promoting economic restructuring, renewing growth models; enhancing Vietnam's position and prestige in the international arena.

2. However, the attraction, management and operation of foreign investment still have shortcomings, limitations and new problems arise. Institutions and policies on foreign investment have not kept up with development requirements. Incentive policies are still scattered, inconsistent and unstable. The investment and business environment and competitiveness have been improved, but are still limited; the quality and efficiency of attracting and managing foreign investment are not high. Socio-economic infrastructure and high-quality human resources have not met requirements; there is a lack of essential cultural and social institutions. The mechanism and capacity for effective and efficient dispute resolution are not high. The organizational system and capacity for attracting and managing foreign investment are still inadequate, scattered, not meeting requirements, lacking initiative and professionalism.

The number of small-scale, low-tech, labor-intensive projects is still large; uneven distribution; the ratio of implemented capital to registered capital is still low. The proportion of contributions to the state budget tends to decrease. Links and interactions with other sectors of the economy are not tight, spillover effects on productivity and technology are not high; the localization rate is still low. The phenomena of transfer pricing, "illegal" investment, and "disguised" investment are increasingly sophisticated and tend to increase. Some enterprises and projects wastefully use resources, land, violate policies and laws on labor, wages, taxes, social insurance, environment, etc.; many complicated disputes and lawsuits arise both domestically and internationally. The development of organizations and promotion of the role of party organizations, trade unions, political-social and social-professional organizations in the foreign-invested economic sector is still difficult.

3. The above limitations and weaknesses are due to many causes, of which subjective causes are the main ones. Awareness of all levels, sectors and society is still incomplete and inconsistent; attracting foreign investment is still lacking in selectivity. The thinking and orientation of innovation and improvement of related mechanisms, policies and laws have not met practical requirements, are not consistent, many regulations are overlapping and contradictory. The capacity of the staff working in attracting and managing foreign investment in many places is still limited, lacking in initiative and creativity; the ability to analyze and forecast is still inadequate. Inspection, examination and handling of violations are sometimes and in some places not strict.

II- GUIDING VIEWPOINTS AND GOALS

1. Guiding viewpoint

- The foreign-invested economic sector is an important component of the Vietnamese economy, and is encouraged and facilitated for long-term development, cooperation and healthy competition with other economic sectors. The State respects and protects the legitimate and legal rights and interests of investors; ensuring the harmony of interests between the State, investors and employees in enterprises.

- Build and perfect institutions and policies on foreign investment in line with development trends, approach advanced international standards and harmonize with international commitments, ensuring synchronization, consistency, publicity, transparency and high competitiveness.

- Actively attract and selectively cooperate with foreign investment, taking quality, efficiency, technology and environmental protection as the main evaluation criteria. Prioritize projects with advanced technology, new technology, high technology, clean technology, modern management, high added value, spillover effects, connecting global production and supply chains.

A corner of VSIP Nghe An Industrial, Urban and Service Park. Photo courtesy

- Multilateralize and diversify partners and investment forms, interweave interests in foreign investment cooperation and organically connect with the domestic economic sector, in line with the orientation of economic restructuring and sustainable development goals; protect the environment, ensure national defense, security, social security, order and safety, and enhance the independence and autonomy of the economy.

- Strengthen the Party's leadership, the effectiveness and efficiency of State management, the role of the Fatherland Front, socio-political organizations and promote the dynamism and creativity of people and businesses in perfecting, implementing and supervising the implementation of institutions and policies on attracting and cooperating with foreign investment.

2. General objectives

Perfecting institutions and policies on foreign investment cooperation with high competitiveness and international integration; meeting the requirements of renewing the growth model, restructuring the economy, protecting the environment, effectively solving social issues, improving productivity, quality, efficiency and competitiveness of the economy. Fundamentally overcoming existing limitations and shortcomings in building, perfecting and organizing the implementation of institutions and policies on foreign investment cooperation. Creating a business environment and competitiveness in the ASEAN 4 group before 2021, in the ASEAN 3 group before 2030.

3. Specific goals

Strive for the foreign-invested sector to achieve the following main targets:

- Registered capital for the 2021 - 2025 period is about 150 - 200 billion USD (30 - 40 billion USD/year); for the 2026 - 2030 period is about 200 - 300 billion USD (40 - 50 billion USD/year).
- Capital for implementation in the 2021 - 2025 period is about 100 - 150 billion USD (20 - 30 billion USD/year); in the 2026 - 2030 period is about 150 - 200 billion USD (30 - 40 billion USD/year).

- The rate of enterprises using advanced technology, modern management, environmental protection, and aiming for high technology will increase by 50% by 2025 and 100% by 2030 compared to 2018.

- The localization rate will increase from the current 20-25% to 30% by 2025 and 40% by 2030.

- The proportion of trained workers in the labor structure increases from 56% in 2017 to 70% in 2025 and 80% in 2030.

III- MAIN TASKS AND SOLUTIONS

1. Perfecting institutions and general policies on foreign investment

- Complete the legal system to overcome current limitations and shortcomings. Amend and supplement regulations on investment procedures and conditions, concepts of investment activities, lists of localities, fields and subjects eligible for investment incentives in foreign investment laws and related laws to unify implementation and ensure compliance with Vietnam's international commitments.

- Research and develop regulations to overcome the situation of "thin capital", transfer pricing, "underground" investment, "disguised" investment. Research and supplement regulations on "national defense and security conditions" in the process of reviewing and granting investment registration certificates (or documents of equivalent legal value) for new investment projects and the process of reviewing and approving investment activities through capital contribution, purchase of shares and capital contributions.

- Complete and synchronize legal regulations on investment, securities and foreign exchange management in the direction of clearly distinguishing between direct investment and indirect investment; unify corporate law and foreign exchange management on accounts for buying, selling and transferring shares.

2. Perfecting institutions and policies to attract investment

- Develop a specific list of restricted areas that do not attract foreign investment in accordance with international commitments; outside this list, foreign investors are treated equally with domestic investors. Encourage foreign investors to enter the market in industries and fields that Vietnam does not need to protect.

- Develop investment criteria to select and prioritize investment attraction in accordance with the planning and development orientation of industries, fields and localities. Develop a security assessment mechanism and conduct security reviews of foreign investment projects and activities that have or may affect national security.

- Innovate investment incentive mechanisms and policies; develop and supplement incentive mechanisms for enterprises that operate effectively and fulfill their commitments; differentiate incentives between different investment sectors and professions. Have policies to encourage cooperation and technology transfer based on agreement and voluntariness. Apply the principle of investment incentives associated with meeting specific conditions and commitments and post-audit mechanisms, requesting compensation when violating commitments.

- Building institutions, outstanding preferential policies, international competition to create favorable business conditions to attract large, key national projects, high-tech projects..., attract strategic investors, multinational corporations to invest, set up headquarters and establish research and development centers (R&D), innovation centers in Vietnam.

- Develop appropriate incentive and preferential mechanisms to increase the linkage between foreign and domestic investment, priority areas to attract; develop industry clusters and value chains, contributing to increasing domestic added value, product competitiveness and national position in the global value chain. Encourage technology and management transfer to Vietnamese enterprises. Have incentive policies for foreign-invested enterprises to train and improve skills and qualifications for Vietnamese workers; employ Vietnamese workers who have worked and studied in advanced countries.

- Upgrade and improve legal regulations on supporting industries, startups, and innovation. Support domestic enterprises to connect with foreign-invested enterprises, improve technology absorption capacity, gradually move towards technological autonomy and participate in the global value chain.

- Develop a balanced and reasonable foreign investment attraction policy between regions; ensure foreign investment attraction and cooperation in accordance with development orientation, planning and requirements. Research and develop incentive mechanisms to attract foreign investment in infrastructure development for the Northern mountainous region, the Central Highlands and the Mekong Delta.

- Improve technical standards and regulations on products, environmental protection, resources and energy saving in accordance with regional and international standards. Do not consider expanding or extending operations for projects using outdated technology, posing a risk of environmental pollution and resource-intensive.

- Continue to research and perfect institutions and policies for economic zones, industrial parks, high-tech parks, high-tech agricultural zones and other similar models in the direction of clearly defining development focuses and outstanding mechanisms and policies suitable to the characteristics of each model, ensuring connectivity and synchronization with other areas.

- Diversify and effectively promote the public-private partnership (PPP) model in infrastructure investment and mergers and acquisitions (M&A) with foreign investors. Research and pilot new investment methods and business models to take advantage of opportunities from the Fourth Industrial Revolution.

3. Perfecting institutions and policies to protect and promote investors' responsibility

- Amend and supplement regulations to ensure rights, obligations, recognition and protection of legal ownership of assets, intellectual property rights, investment capital, income and other legal interests of investors and related entities, in accordance with international commitments. At the same time, there are sanctions to strictly handle violations.

- Amend and supplement legal regulations on labor, employment and wages, ensuring the harmony of interests of employees and employers in a transparent manner, meeting the requirements of international integration. Reasonable adjustment of the minimum wage gap between regions to limit the concentration of labor in large cities, reducing pressure on infrastructure. Clearly define the responsibilities of infrastructure investors and foreign-invested enterprises in the construction of social housing, worker housing, kindergartens, medical facilities, culture, sports, etc. to serve workers.

- Clearly define the investor's responsibility for environmental protection during the investment process, project implementation and business operations throughout the project implementation period in accordance with the provisions of law.

4. Perfecting the institutional policies for investment management and supervision

- Improve the analytical and forecasting capacity of agencies that build and promulgate institutional policies; promptly promulgate regulations to adjust new economic relations, new business models and methods... to facilitate investment and business activities of investors and management activities of state agencies.

- Review and complete anti-monopoly regulations in accordance with international practices; on meeting the conditions of economic concentration under competition law; on ensuring national defense and security when foreign investors and foreign-invested enterprises contribute capital, buy shares, merge, and acquire enterprises in Vietnam.

- Perfect the law on anti-transfer pricing towards elevating it to law; perfect and supplement strict regulations in the law on tax, foreign exchange, customs, investment, science and technology, on database building, information disclosure... to control, manage and prevent transfer pricing right from the establishment and during the operation of foreign-invested enterprises. Build a specialized anti-transfer pricing apparatus that is strong and capable enough; an inter-sectoral and specialized inspection mechanism to prevent and limit transfer pricing of foreign-invested enterprises.

- Develop a mechanism to prevent and resolve investors' problems, complaints and lawsuits. Improve the quality and effectiveness of dispute resolution and enforcement institutions. Improve the law to effectively resolve problems with projects that commit to transferring foreign investors' assets to the State or the Vietnamese side without compensation after the end of operations and handle cases of foreign investors being absent or absconding during the investment activities in Vietnam.

- Strengthen the assignment, decentralization, authorization and coordination mechanism among state management agencies; apply the one-stop shop and inter-connected one-stop shop mechanism. Develop criteria to evaluate the effectiveness of foreign investment in terms of economy, society, environment, national defense, security, etc. Complete legal regulations on foreign investment management and supervision, clearly define the responsibilities of ministries, branches and localities in presiding over and coordinating the management and supervision of foreign investment activities.

- Develop mechanisms and policies to protect the domestic distribution market, create conditions for domestic enterprises to develop and comply with international commitments.

5. Innovate and improve the effectiveness of investment promotion work

- Continue to innovate, improve and enhance the effectiveness of investment promotion work. Review and restructure the system of existing investment promotion agencies (no new ones established) in a professional, independent direction, without overlapping or duplication with state management agencies on foreign investment; consider the possibility of linking with trade and tourism promotion in a flexible manner, suitable to the requirements and characteristics of each locality.

- Strengthen coordination and connection between the Central and local levels, between regions, between state management agencies and professional associations in investment promotion. Proactively promote investment with goals, focus, and key points, associated with new investment cooperation criteria; continue to maintain traditional markets and partners, while expanding new markets and partners. Diversify investment promotion activities and methods; focus on promoting on-site investment with specific successful cooperation projects. Invest appropriately in promotion activities. Prioritize implementation of national, regional, and inter-sectoral investment promotion activities.

- Publicize and make transparent the information system on socio-economics, laws, policies, planning, plans, markets, etc. Strengthen the dialogue mechanism, innovate and expand the methods of receiving suggestions and feedback from investors; promptly and thoroughly handle difficulties and problems related to ongoing projects.

6. Improve the effectiveness and efficiency of state management of foreign investment

- All levels of government strictly implement investment laws and other relevant laws on foreign investment activities, not allowing international complaints and disputes to arise. Strictly handle the situation of inconsistent implementation of institutions and policies between the central government and localities, and between localities. Strictly prohibit the granting, adjustment, management, negotiation of foreign investment projects, issuance of preferential regulations, investment support... beyond authority and against the law. Negotiation and agreement on government guarantee commitments (GGU), signing of BOT contracts, product consumption... must be carried out in accordance with the law.

- Correct the management and implementation of investment projects, ensure economic - social - environmental efficiency, compliance with planning, and in accordance with project selection and screening criteria... Strictly ensure the process and procedures for granting, adjusting, revoking, and terminating foreign investment projects in accordance with legal regulations.

- Strengthening the inspection, supervision and examination work in conjunction with enhancing the responsibility of local authorities and leaders in implementing the Party's policies and the State's laws related to foreign investment. Resolutely handling projects that cause environmental pollution, ineffective land use, loss-making business for many years, and projects that do not fulfill their commitments. Preventing and promptly and effectively resolving disputes related to foreign investment.

- Improve the state management apparatus on foreign investment in the direction of streamlining, effectiveness, efficiency and unification at ministries, branches and localities, meeting the requirements of inter-sectoral and inter-regional management at the local level and nationwide. Promote the assignment, decentralization and coordination between ministries, branches and localities in conjunction with strengthening inspection and supervision.

- Focus on improving the capacity and public ethics of the staff of state management of foreign investment in ministries, branches and localities in accordance with new requirements and tasks of foreign investment management.

- Complete the national investment database and information system in a synchronous and interconnected manner with the fields of labor, land, tax, customs, credit, foreign exchange... and localities. Improve the quality of statistical work, ensuring timeliness, completeness, accuracy and conformity with international practices.

- Closely coordinate with business associations and international organizations to improve the quality and effectiveness of voting and honoring foreign-invested enterprises; periodically vote and honor outstanding foreign investors.

7. Strengthening the Party's leadership, promoting the role of the Vietnam Fatherland Front and socio-political organizations in foreign investment

- Develop party organizations in foreign-invested enterprises, taking into account specific factors; provide clear guidance and direction on organizational models, methods of operation, activities, etc. for party organizations in foreign-invested enterprises. Strengthen the connection between party organizations and party members with enterprises and business owners through common concerns, development goals and interests.

- Party committees at all levels strengthen leadership and direction in organizing the implementation of party development work in economic sectors with foreign investment capital; select and arrange qualified, capable and politically qualified cadres to manage foreign investment activities and regularly inspect and supervise the implementation process.

- Develop and improve the effectiveness of trade union organizations in foreign-invested enterprises, promote the role of trade unions in representing and protecting the legitimate rights and interests of union members and employees, build harmonious, stable and progressive labor relations, and strengthen dialogue between business owners and employees. Strive for 100% of enterprises with 25 or more employees to have trade unions.

- Promote the supervisory and critical role of the Vietnam Fatherland Front and socio-political organizations, socio-professional organizations in implementing the Party's guidelines and policies and the State's laws on foreign investment.

IV- IMPLEMENTATION ORGANIZATION

1. The Party Delegation of the National Assembly and the Party Committee of the Government shall amend, supplement and perfect the law on foreign investment cooperation and other relevant laws. Strengthen the supervision of the National Assembly, the National Assembly Standing Committee, the Nationality Council, the National Assembly committees, the National Assembly delegations and National Assembly deputies over the implementation of laws and policies on foreign investment cooperation.

2. The Government Party Committee leads the development and implementation of the Foreign Investment Cooperation Strategy for the 2021-2030 period, reviews and completes related plans; develops and organizes the implementation of an action program to implement the Resolution.

3. Provincial Party Committees, City Party Committees, Party Committees and Party organizations directly under the Central Committee shall organize research, dissemination and development of plans to implement the Resolution in accordance with the situation of the sector, locality, agency and unit; supplement the targets stated in the Resolution into the annual plans of the sector, locality, agency and unit; periodically inspect and evaluate the implementation.

4. The Central Propaganda Department shall preside over and coordinate with the Government Party Committee to organize extensive guidance and propaganda on the content of the Resolution and its implementation results.

5. The Central Economic Committee shall preside over and coordinate with relevant agencies to regularly monitor, supervise, inspect and urge the implementation of the Resolution; periodically summarize and report to the Politburo and the Secretariat./.