Prime Minister directs to improve the efficiency of foreign investment in the new period

Foreign investment in Vietnam has grown rapidly in terms of quantity, capital scale and project quality; contributing to job creation, increasing income for workers; and improving production capacity and skills.

In recent times, attracting foreign investment has had great achievements, making foreign investment an important part of the economy, contributing positively to the country's socio-economic development. Foreign investment in Vietnam has grown rapidly in terms of quantity, capital scale and project quality; contributing to job creation, increasing income for workers; improving production capacity and skills; increasing state budget revenue, stabilizing the macro-economy; promoting economic restructuring, renewing the growth model; enhancing Vietnam's position and prestige in the international arena.

To promote and further improve the quality and efficiency of attracting and using foreign investment capital, the Politburo issued Resolution No. 50-NQ/TW dated August 20, 2019 on orientations for perfecting institutions and policies, improving the quality and efficiency of foreign investment cooperation by 2030; the Government issued Resolution No. 58/NQ-CP dated April 27, 2020 on the Government's Action Program to implement Resolution 50-NQ/TW; the Prime Minister issued Decisions No. 667/QD-TTg dated June 3, 2022 approving the Foreign Investment Cooperation Strategy for the 2021-2030 period and No. 308/QD-TTg dated March 28, 2023 approving the action plan to implement the Strategy.

In 2021 and 2022, despite the complicated fluctuations in the domestic and international economic situation, attracting foreign investment still achieved positive results, especially in terms of disbursed capital, exports, budget payments, job creation, contributing to improving the balance of payments and completing the goals and tasks of the socio-economic development plan.

Currently, the world situation is changing rapidly, complicatedly, and unpredictably, with many unprecedented problems arising beyond forecast. Many challenges are posed to countries such as economic recession, energy insecurity, global food security, etc. Competition between countries in attracting foreign investment in the post-COVID-19 period is increasingly fierce; the trend of changing policies of countries to ensure strategic autonomy; the coordination of countries in building global governance rules, including a roadmap for applying global minimum tax by 2024; the trend of accelerating adjustments to global supply and production chains; changes in investment strategies of multinational corporations, etc. are strongly and directly impacting foreign investment activities in the world, in the region and in Vietnam.

The domestic economy has advantages but also has difficulties and challenges. The macro economy continues to be maintained stable, inflation is controlled; GDP growth is promoted, and major balances of the economy are ensured. Vietnam's long-term credit rating has been raised to "stable" and "positive" levels; the domestic business community has made efforts to overcome difficulties, actively innovate, and proactively adapt; attracting foreign investment has shown signs of recovery and improvement. However, there are still significant challenges that potentially affect the goals of stabilizing the macro economy, controlling inflation, and ensuring major balances. Production and business face high production and logistics costs, lack of supply, and especially due to fighting inflation, our major markets are shrinking, and global supply chains are broken...

The management of foreign investment activities still has shortcomings, in some places there is still a lack of unity and connection between localities in attracting investment; in some places there are still local manifestations, causing difficulties or not paying attention to the examination and consideration of criteria on technology, environment, labor; the inspection and supervision of the implementation of investors' obligations is still lacking in close coordination between ministries, branches and levels. The business environment has not had significant advantages compared to the competitive level of attracting investment in the world and in the region, technical infrastructure has not met investors' expectations, clean premises are still lacking and production and business costs are being pushed up, trained labor resources are still weak and lacking... The connection between foreign investment and domestic enterprises is still limited, there is no connection in terms of basic and sustainable interests.

Factories in operation in VSIP Nghe An Industrial Park. Photo: Tran Chau

In the face of the above situation and to overcome the shortcomings and limitations in order to continue to strongly improve the investment and business environment, increase attraction and enhance the quality and efficiency of foreign investment flows to serve the country's socio-economic development in the new period, the Prime Minister requests Ministers, Heads of ministerial-level agencies, Government agencies, Chairmen of People's Committees of provinces and centrally run cities to thoroughly grasp and focus on implementing the following tasks:

1. Ministries, branches and localities urgently organize and effectively implement the tasks assigned in Resolution No. 58/NQ-CP dated April 27, 2020 of the Government on the Government's Action Program to implement Resolution No. 50-NQ/TW of the Politburo and Decision No. 308/QD-TTg dated March 28, 2023 of the Prime Minister approving the action plan to implement the Foreign Investment Cooperation Strategy for the period 2021-2030.

2.Prepare favorable conditions for attracting investment and business production.

a) The Ministry of Planning and Investment and the People's Committees of provinces and centrally run cities shall accelerate the organization and appraisal of provincial planning for the 2021-2030 period and vision to 2050 using an integrated approach to orient, arrange, and organize spatially, creating opportunities for rapid and sustainable development.

b) Ministries and branches urgently review, amend, supplement and perfect specialized legal regulations, in the direction of promoting decentralization and delegation of power, clearly defining responsibilities between the Government and ministries and branches, between the Government, ministries and branches and local authorities, ensuring compliance with the spirit of Resolution No. 04/NQ-CP dated January 10, 2022 of the Government on promoting decentralization and delegation of power in state management and ensuring feasibility, consistent with the implementation capacity of decentralized agencies; promptly remove obstacles in administrative procedures in investment and business activities. Resolutely cut unnecessary administrative procedures, increasing compliance costs.

c) Ministry of Planning and Investment:

- Report on the possibility of building a Law on Venture Capital; Building a database system of Vietnamese enterprises that meet the standards to become suppliers for foreign-invested enterprises in a number of industries and fields.

- Preside and coordinate with the Ministry of Finance and relevant ministries and branches to develop solutions to attract investment and provide support other than taxes, not contrary to international regulations and commitments in the spirit of harmonizing the interests of all parties, encouraging existing investors as well as new investors, ensuring equal treatment among enterprises.

d) Ministry of Labor, War Invalids and Social Affairs: (i) Implement policies and solutions for training and retraining to improve vocational skills for workers to meet human resource requirements of investors, including foreign investors; (ii) Focus on developing an open, flexible, modern, effective and integrated vocational education system (rapidly increase the scale and quality of training, prioritize high-quality training, new technology occupations, promote public-private cooperation, digital transformation in training, etc.); (iii) Review and report on the situation of employing Vietnamese workers who have worked abroad after returning home and propose solutions to overcome the labor shortage. Research policies to encourage businesses to employ Vietnamese talents abroad. Develop a coordination mechanism with large domestic and foreign corporations and investors to train according to orders; (iv) Urgently amend and supplement Decree No. 152/2020/ND-CP dated December 30, 2020, of the Government regulating foreign workers working in Vietnam and recruiting and managing Vietnamese workers working for foreign organizations and individuals in Vietnam according to simplified procedures to be completed in June 2023, in the spirit of openness, convenience, in accordance with international practices and the practical situation in Vietnam, ensuring to meet the requirements of state management, as well as the need to develop high-quality human resources for Vietnam in the coming time.

d) Ministry of Science and Technology: by June 2023, must submit to the Prime Minister amendments and supplements to Decision No. 18/2019/QD-TTg dated April 19, 2019 regulating the import of used machinery, equipment and technological lines in the direction of simplifying requirements and procedures for importing used production lines and equipment into Vietnam to serve relocation activities, ensuring that imported machinery and technology are advanced and consistent with the investment attraction orientation; review requirements, sequences and procedures to ensure that outdated technologies, which consume a lot of energy and pose a risk of environmental pollution, are not accepted. Research and develop policies to encourage cooperation and technology transfer to Vietnamese enterprises.

e) Ministry of Information and Communications: In the third quarter of 2023, research and propose a pilot policy framework and breakthrough solutions to attract the world's leading digital technology corporations (techfirms) to Vietnam. Review, develop and propose to issue, according to authority, mechanisms and policies on concentrated information technology parks to form concentrated information industrial parks that meet international standards; attract the world's leading technology corporations to invest, research and develop. Develop or propose to issue incentive mechanisms for Vietnamese information technology enterprises to research and develop core software and source technology. Continue to promote the development of telecommunications and information technology infrastructure to facilitate the attraction of foreign investment: 5G network coverage, development of high-speed and ultra-high-speed broadband fiber optic Internet networks to industrial parks, Gigabit fiber optic infrastructure connecting localities and key economic regions of the country, etc.

g) Ministry of Finance: (i) Review the inadequacies and inconsistencies of tax laws with the provisions on tax incentives of specialized laws to propose, develop, submit to competent authorities or promulgate under its authority tax laws to ensure consistency with other relevant laws in the third quarter of 2023; (ii) Review and complete current legal regulations and develop a roadmap for applying global minimum tax based on international experience and in accordance with the context and practical situation of Vietnam to submit to the 6th session of the National Assembly in 2023; (iii) In the third quarter of 2023, submit to the Government amendments to regulations on personal income tax incentives for foreign experts, Vietnamese experts abroad, and high-quality domestic human resources to expand the source of high-quality human resources in Vietnam.

h) Ministry of Foreign Affairs: Through diplomatic and foreign affairs channels, strengthen the promotion, dissemination, and image building of Vietnam's investment and business environment and the Government's orientation on sustainable development to contribute to the development and diversification of investment cooperation opportunities with major partner countries.

i) Ministry of Education and Training: (i) In the third quarter of 2023, submit to the Government a study on developing policies to enhance competitiveness and create an attractive environment to selectively attract foreign educational institutions to invest in and build branches in Vietnam; (ii) Study and develop a mechanism to encourage organizations and enterprises to cooperate with educational institutions to invest in improving facilities and training high-quality human resources when they are capable of absorbing, mastering and effectively exploiting technology from abroad in Vietnam; (iii) Review and remove obstacles related to procedures for establishing and operating educational institutions in practice; ensure consistency between legal provisions; promote decentralization and delegation of powers, attach accountability to improving the quality of education.

k) The Ministry of Public Security and the Ministry of Construction continue to promptly and effectively implement Official Dispatch No. 220/CD-TTg dated April 5, 2023 of the Prime Minister on removing difficulties and obstacles in fire prevention and fighting work.

l) The Ministry of Health reviews and evaluates difficulties and shortcomings related to procedures for granting licenses for circulation of medical equipment and pharmaceuticals to amend and supplement the Law on Pharmacy, ensuring comprehensiveness, consistency and feasibility; meeting the situation of socio-economic development and international integration.

m) People's Committees of provinces and centrally run cities

- Preside over and coordinate with relevant ministries and branches to develop and promulgate criteria and conditions on investment rate per land area and criteria on number of employees according to the provisions of the Investment Law and Decree No. 31/2021/ND-CP dated March 26, 2021 of the Government detailing and guiding the implementation of a number of articles of the Investment Law, as a basis for granting Investment Registration Certificates and monitoring, inspection and supervision.

- Proactively approach and grasp the problems and difficulties of existing investors to identify current difficulties and propose improvements to policies and laws. Promptly and thoroughly resolve problems of enterprises due to implementation.

- For important projects with spillover effects, coordinate with ministries and branches to develop incentive and support plans to discuss with investors, ensuring compliance with current legal regulations and competitiveness compared to other countries.

- Review, develop and adjust investment attraction orientations in the locality in accordance with the local socio-economic development strategy and plan for the 2021-2030 period.

- Continue to improve the investment environment, proactively develop and implement investment promotion activities appropriate and effective to the new situation.

- Shaping industrial production space and fields related to investor orientation, supporting localities to have connections to help investment projects become effective.

- Planning industrial production areas towards sustainable development and environmental protection, linking industrial zones with urban areas, specialist housing areas and safe and healthy living environments. Forming specialized industrial production areas contributes to the development of large-scale economies towards modernization and sustainable industrialization.

- Combining new digital technologies such as virtual reality and augmented reality to build digital maps of industrial parks and industrial clusters associated with descriptions of current production status to support foreign investors to have a panoramic view and identify suitable investment locations in Vietnam.

3. Improve the effectiveness and efficiency of state management in the field of foreign investment

a) Ministries and branches

- Reviewing difficulties in the implementation of legal regulations on investment to synthesize and promptly guide handling or submit to competent authorities to issue regulations to resolve difficulties. Thoroughly cutting down cumbersome administrative procedures that cause difficulties for investors and people.

- Review, amend and supplement international treaties related to investment to conform to new standards, ensure State management authority and public policy; limit the possibility of investors abusing and exploiting the State-investor dispute resolution mechanism.

- Review and synchronize legal regulations related to business investment to avoid overlapping, causing difficulties for investors' business investment activities.

- Strengthen propaganda, dissemination of laws, policy propaganda, and thorough guidance so that state agencies and investors understand and correctly apply legal provisions.

- Organize, inspect and supervise the performance of public duties. Strictly handle acts of harassment, causing difficulties, troubles and negativity to investors.

- Reform administrative procedures, apply digitalization of records and procedures related to business investment to contribute to building e-Government according to Government Resolutions.

- Coordinate the careful appraisal and assessment of technology, standards, technical regulations, product quality, environment, investment rate... for foreign investment projects in fields where investors show signs of taking advantage of Vietnamese origin to evade trade defense measures and tax evasion.

- Strengthen dialogue with the business community, sincerely, substantively, effectively in the spirit of harmonious benefits and shared risks.

b) People's Committees of provinces and centrally run cities

- Develop investment development plans and organize the construction of technical infrastructure systems and social infrastructure outside the fences of industrial parks, export processing zones, high-tech zones, and functional areas in economic zones.

- Carry out operations related to receiving dossiers; issuing, adjusting, and revoking Investment Registration Certificates; monitoring, supervising, and evaluating the implementation of investment projects; implementing investment reporting regimes on the National Investment Information System and guiding investors and enterprises in carrying out investment procedures and reporting regimes on the System.

- Carry out the review and issuance of Investment Registration Certificates and Notices of Capital Contribution and Share Purchase in accordance with the list of industries and occupations with restricted market access for foreign investors.

- Fully and seriously implement the provisions of the law on investment, enterprises, land, housing, construction, tax,... in the process of appraisal and management of foreign investment projects, avoiding domestic and international complaints and disputes.

- Organize careful appraisal and assessment of technology, standards, technical regulations, product quality, environment, investment rate, etc. for foreign investment projects in fields where investors show signs of taking advantage of Vietnamese origin to evade trade defense measures and tax evasion.

- Organize appraisal and fully implement regulations on reviewing national defense and security factors for foreign investment projects implemented in border areas, islands, and areas that affect national defense and security.

- Review and amend internal processes and procedures related to appraisal and approval of investment policies, ensuring compliance with investment laws and related laws without causing inconvenience or increasing costs for investors.

- Direct the investment registration agency to synthesize the difficulties and problems of foreign-invested projects in the area, thereby proposing solutions to remove difficulties and problems, and immediately handling them according to their authority, as well as proposing amendments to laws and policies to create an open, favorable investment and business environment, approaching international standards.

- Every year, the Chairman of the People's Committee of the provinces and centrally-run cities presides over at least 02 dialogues with the business community, especially FDI enterprises in the province or city, promptly grasps the difficulties and problems of enterprises and promptly handles problems within their authority..

4. Strengthening inspection, supervision and evaluation of investment activities

a) Ministries and branches shall strengthen inspection, supervision and overall assessment of investment within the sectors and fields under their management.

b) People's Committees of provinces and centrally run cities:

- Direct investment registration agencies to request local enterprises to strictly implement the regime of periodic reporting on the implementation status of investment projects in accordance with the provisions of law.

- Periodically assess the performance of foreign investment projects in the area to promptly detect cases where investors take advantage of the openness of the legal system to carry out unhealthy investment activities, affecting the investment and business environment.

- Take resolute measures to deal with projects that are not implemented, are slow to implement, and do not fulfill their commitments and regulations. Apply legal regulations to terminate operations and revoke the Investment Registration Certificate for the above projects.

- Strengthen the inspection and supervision of investment registration agencies in granting, adjusting, revoking Investment Registration Certificates and managing investment activities in localities.

5. Improve the effectiveness of investment promotion and attraction activities

a) Organize promotion according to the National List of projects calling for foreign investment for the 2021-2025 period issued by the Prime Minister under Decision No. 1831/QD-TTg dated November 1, 2021.

b) Develop and promptly publish a list of projects to attract investment in the locality.

c) Proactively approach and discuss with large corporations about incentive packages and investment support mechanisms within the framework of high-level foreign affairs activities of Party, State and Government leaders. Leaders of ministries, branches and localities proactively seek, select, approach, discuss, promote opportunities, and mobilize international corporations and investors to invest in Vietnam, or through channels that have influence on investment decision makers to attract investment in Vietnam.

d) Based on lessons learned from countries around the world in developing incentive packages and investment support (cash grants, labor training, infrastructure development support, measures to respond to global minimum taxes, etc.).

Ministries, branches and People's Committees of provinces and centrally run cities proactively research and propose competent authorities to consider adjusting and supplementing laws and policies to be more competitive in order to attract large, dynamic investment projects that spread in the new wave of investment.

d) Strengthen the grasp of international investment trends, investment shift trends, supply chains; impacts on Vietnam to propose solutions to remove difficulties and problems arising; at the same time, advise on policies in line with initiatives and new legal frameworks to attract high-quality foreign investment capital flows in the new situation, especially in key areas with development potential such as digital technology, semiconductors, microchips, electronic hardware assembly and production, and software production.

e) Develop a set of promotional and investment promotion documents by locality and management sector; promote training in specialized knowledge and skills on investment cooperation to innovate, improve and enhance the effectiveness of investment promotion work.

6. Implementation organization

a) Ministers, Heads of ministerial-level agencies, Heads of Government agencies, Chairmen of People's Committees of provinces and centrally run cities shall proactively and promptly perform the assigned tasks in this Directive.

b) The Ministry of Planning and Investment shall preside over and coordinate with relevant ministries, branches and agencies to urge, inspect and supervise the implementation of the Directive./.