Over the past 17 years of implementing the Foreign Investment Law, the foreign invested sector has developed remarkably, contributing important part to the country’s socio-economic development. The state management over foreign investment activities has been steps by steps put into the order. Vietnam’s Foreign considered by foreign investors relatively attractive compared to those of other regional countries
PRIME MINISTER SOCIALIST REPUBLIC OF VIET
No 13/2005/CT-TTG ‑‑‑‑‑‑‑‑‑‑‑‑‑‑
PRIME MINISTER’S DIRECTIVE
On measures to create new development in foreign direct
investment attraction in
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Over the past 17 years of implementing the Foreign Investment Law, the foreign invested sector has developed remarkably, contributing important part to the country’s socio-economic development. The state management over foreign investment activities has been steps by steps put into the order.
However, there remain weaknesses yet to be addressed, particularly those relating to building master-plan, laws, and policies, State management and investment promotion. Meanwhile, Resolution No 09/2001/NQ-CP and Directive No 19/2001/CT-TTg have not been strictly and effectively implemented.
To achieve more results, to address the above mentioned weaknesses and to create new development in foreign investment attraction and utilization under the spirit of the resolution of the 9th plenum of the Central party Committee, as well as to boost the implementation of the government’s Resolution No 09/2001/NQ-CP dated August 28th 2001, the Prime Minister requests ministries, ministerial organizations, governmental organizations, People’s committees of provinces and central cities (hereafter called ministries and provincial people’s committees) thoroughly and promptly carry out the followings:
I. Some principal directions:
1.Guidelines:
a) In the 2005 and 2006-2010 plans, make every government level be fully aware of the Party’s policy on increased attraction and better utilization of foreign investment capital in lines with the duties set by the Resolution of the 9th Plenum (9th Congress) of the Party. Based on this, attain synchronism as regards to both comprehension and action of ministries, agencies and central and local governments in attraction, management and utilization of foreign investment capital.
b) Gradually minimize towards abolishing terms and conditions protectionism in industries that need to be developed and are competitive; gradually open up the market in lines with the pledged roadmap of international economic integration. Do not issue documents restricting or ceasing investment licensing that do not comply with the Law on Foreign Investment and related legislative documents and international commitments.
c) Diversify foreign investment capital attraction modalities; provide the most favorable conditions for the efficient operation of projects; encourage investment expansion, technology renewal and investment objective diversification in compliance with foreign investment laws and industry and product development plans.
d) Continue to reform and improve the quality of investment promotion activities; strengthen researches into markets and partners in order to efficiently attract foreign investment, particularly from transnational corporations; focus on key sectors and industries of the economy, especially the fields of high technologies and source technologies.
e) Develop plans to initiatively implement international commitments. In the immediate time, specifically in 2005, focus on implementing the pledges stipulated in the AFTA, the US-Vietnam Bilateral Trade Agreement, the Vietnam- Japan Joint Initiative as well as agreements signed with the EU. Simultaneously quickly prepare for the implementation of the pledges upon the admission to the World Trade Organization (WTO).
2. Planning
a) Promptly develop the foreign investment attraction and utilization strategy to 2010 and the following years in accordance with the social-economic development strategy, which clearly defines the objectives, duties and solutions for each year and period.
b) Revise and amend industry plans along with developing territorial plans towards abolishing restrictions and discriminations between domestic and foreign investment to create favorable conditions for the greater participation of the foreign invested sector in the development of industries and territories. Accelerate the development of industry plans that have not existed such as the university and vocational school network plan, and devise licensing conditions and criteria for investment projects in these industries.
c) While completing plans, pay attention to the encouragement of economic sectors, including foreign investor, to involve in building social infrastructure, especially transport, seaport, electricity and water supply, hospital, school, leisure and recreation projects and so forth. Industry and product plans shall abide by the guideline that plans only give the direction and all economic sectors are encouraged to invest.
3. Legislative and policy development
a) In 2005 and the following years, focus on devising, issuing and guiding the implementation of the Investment Law and the Enterprises Law commonly applicable to domestic and foreign investment. Once the Unified Investment Law is adopted by the National Assembly, ministries, ministerial agencies and provincial people’s committees shall initiatively revise legal documents relating to foreign investment, amend or nullify inappropriate provisions. The promulgation of foreign investment policies must ensure consistency, transparency and predictability; lately promulgated policies must ensure continuation, non-retroactivity and more attractiveness.
b) Continue to study the expansion of investment fields and diversification of foreign investment modalities in lines with the roadmaps of enterprise reform and international economic integration such as the modalities of holding company, merger-acquisition for foreign invested enterprises.
In the immediate time, select some more foreign invested enterprises to transform into shareholding companies in accordance with Decree No 38/2003/ND-CP dated
c) Continue to finalize tax regulations towards not breaching investment incentives, particularly for projects that have been licensed.
4. State management
a) Continue to drastically reform investment procedures and enhance the effectiveness of state management over foreign investment towards further decentralizing investment licensing and foreign investment management; apply the registration mechanism for investment licensing in lines with the implementation roadmap of international commitments; develop a coordination mechanism between ministries and provincial people’s committees in undertaking state management and supervision of foreign investment; publicize administrative procedures towards simplifying procedures and strengthening supervision; shorten the investment appraisal and licensing time.
b) Regularly review, assess and promptly address difficulties facing foreign investment projects to create favorable conditions for enterprises to efficiently accelerate project implementation; consider the revocation of investment licenses of projects that prove inability and having no conditions for implementation in accordance with legal procedures. Organize periodical meeting on foreign investment between ministries and provincial people’s committees.
c) Ministries, ministerial agencies and provincial people’s committees shall seriously comply with the procedures on legal document development and issuance; cease the unauthorized issuance of legal documents or illegal introduction of incentives.
5. Investment promotion
a) Drastically reform the investment promotion subject and approach; focus on promoting investment according to specific sectors, areas and partners with emphasis on promoting investment from transnational companies as well as small and medium-size enterprises.
b) Allocate funds for investment promotion activities as a separate expense that is included in the annual regular expenditures of ministries, agencies and localities as stipulated by Resolution No 09/2001/NQ-CP dated
c) Establish the investment promotion fund based on the funding of the state budget (taken from the tax payment of the foreign invested sector) and the contribution from organizations and enterprises.
d) Promote researches into the economies, investment markets and policies of major countries, groups and companies in order to envisage appropriate investment promotion policies; study the investment promotion laws, policies and approaches of other regional countries to promptly devise appropriate policies. Strengthen the investment promotion divisions in the representative agencies of
e) Enhance external information and propaganda and issue publications introducing the country image and policies on socio-economic development and foreign investment in
II- Assignment of responsibilities
To implement those above mentioned solutions, the Prime Minister assigns responsibilities for ministries and provincial peoples committees as follow:
1. Ministry of Planning and Investment
a) Preside over, in coordination with concerning ministries and agencies, working out the option for broadening fields of foreign investment attraction and diversifying forms of foreign investment. Immediately, in the second quarter of 2005, submit to the prime Minister the option for extending the deadline of application for transforming foreign invested enterprises into shareholding companies in accordance with the provisions of Decree No 38/2003/ND-CP dated on April 15, 2003 of the government and the principles on trial application of the modality of holding companies with foreign investment capital in Vietnam
b) Develop and submit to the government within the second quarter of 2005 the coordination mechanism between ministries, agencies and provincial people’s committees in state management over foreign investment for improvement of management effectiveness and instruct investment licensing bodies to fulfill the following requirements:
- Promptly handle and appraise project documents, ensuring procedure completion deadline; grant investment licenses and apply investment incentives in compliance with the laws.
- Publicize appraisal standards and information relating to appraisal procedures
- Devise sectioning regulations on projects that are not implemented on schedule
- Enhance reporting and statistical regimes on foreign investment
- Strengthen inspection and examination to promptly discover and impose severe sanctions on violations by organizations, individuals, enterprises and state agencies in forcing investment activities.
c) Develop and submit to the Prime Minister within the second quarter of 2005 the Strategic directions on foreign investment attraction and utilization until 2010 and Vision to 2020
d) Preside over, in coordination with ministries, agencies and provincial people’s committees, drafting the list of national project calling for foreign direct investment during 2006-2010 and submit to the Prime Minister within the second quarter of 2005
e) Preside over, in coordination with ministries, agencies and provincial people’s committees, revising and submitting to the government within the second quarter of 2005 the adjustment option for the list of areas where foreign investment is inhibited or conditional towards ensuring transparency, clarity and compliance with the international commitments.
f) Preside over, in coordination with the Ministry of Finance, submitting to the Prime Minister the proposal on establishment of the investment promotion fund for promoting foreign investment and official development assistance (ODA) within the second quarter of 2005
g) Preside over, in coordination with the Ministry of Foreign Affairs, submitting to the Prime Minister the proposal on strengthening investment promotion representatives working in key regions such as the
h) Preside over the establishment of the inter ministerial workgroup to develop and submit to the Prime Minister synchronous policies on promoting the private economic sector, including the foreign invested sector, to invest in infrastructure development, housing construction for sale or housing construction for workers working in industrial zones and export processing zones within the second quarter of 2005
i) Preside over and organize quarterly meetings on foreign direct investment between ministries, agencies and provincial people’s committees, starting from the second quarter of 2005, to promptly address difficulties and impediments facing licensed projects and create conditions for the efficient operation of the projects.
j) Preside over, in coordination with the Ministry of Finance and concerning ministries and agencies, developing and submitting to the Prime Minister within the second quarter of 2005 the incentive mechanism for high-tech enterprises investing outside high-tech zones.
k) Preside over, in coordination with the Ministry of Justice, submitting to the Prime Minister within the second quarter of 2005 the option for signing on the 1965-dated Washington Convention on investment dispute settlement between the state and citizens of other states.
2. Ministry of Finance:
a) Within the second quarter of 2005, preside over, in coordination with concerning ministries, agencies, issuing legal documents guiding the listing of foreign invested shareholding companies; governing regulations and encouragement policies on operation of investment funds in
b) Since 2006, allocate investment promotion funds in the annual regular expenditures of ministries, agencies and localities.
c) Continue to issue in 2005 auditing and accounting standards in lines with international auditing and accounting standards.
d) Preside over, in coordination with the Ministry of Planning and Investment and concerning ministries and agencies, issuing guiding documents for the settlement of problems arising in the implementation of the new corporate income tax regulations towards ensuring fairness and transparency for those enjoying investment incentives. Chair and coordinate with concerning ministries and agencies in submitting to the Prime Minister within the second quarter of 2005 the list of special encouraged projects according to Article 37 of Decree 164/2003/ND-CP detailing the implementation of the Corporate Income Tax Law.
e) Preside over, in coordination with the Ministry of Construction, the Ministry of Planning and Investment, developing and submitting to the Prime Minister within the second quarter of 2005 the governing mechanism on the construction of houses for sale by foreign invested enterprises.
f) Preside over, in coordination with the Ministry of Planning and Investment and concerning ministries and agencies, instructing and monitoring the revision and amendment of investment incentives applied by localities in terms of taxation and budgetary funding and report the Prime Minister within the second quarter of 2005
g) Preside over, in coordination with the Ministry of Justice, submitting to the Prime Minister in 2005 the option for adopting the amended Kyoto Convention.
3. Ministry of Science and Technology
a) In 2005, develop an internet-based intellectual property information system
b) Preside over, in coordination with concerning ministries and agencies, developing and submitting to the Prime Minister the option for tackling the local content issue in lies with international commitments.
c) Accelerate the drafting and submitting to the national Assembly the Intellectual Property Law.
4. Ministry of Natural Resources and Environment
a) Within the second quarter of 2005, report the Prime Minister on the situation of industrial wastes, coordinate with concerning ministries and agencies in scrutinizing and developing a master plan on wastes recycling and treatment.
b) Within the second quarter of 2005, develop and submit to the Prime Minister the proposal on capacity building for urban environmental companies treating industrial wastes.
c) Preside over, in coordination with the Ministry of Planning and Investment and concerning ministries and agencies, instructing the revision and amendment of regulations on land-related investment incentives applied by localities towards complying with the land laws and report the Prime Minister within the second quarter of 2005
5. Ministry of Industry.
a) within the second quarter of 2005, submit to the Prime Minister the following planning proposals:
- The master plan on the motorbike industry development to 2010.
- The plan on industrial parks specifically reserved for enterprises operating in auxiliary industries.
b) Within the second quarter of 2005, instruct the Electricity of Vietnam to devise measures to completely reimburse the capital invested by foreign invested enterprises to build infrastructures outside their fences
c) Coordinate the discussion with the
6. Ministry of Post and Telecommunications
a. Within the second quarter of 2005, preside over, in coordination with the Ministry of Planning and Investment and the Ministry of Industry, developing and submitting to the Prime Minister the master plan on the electronics industry development to 2010, including policies on foreign investment attraction in this industry.
b. In the third quarter of 2005, coordinate with the Ministry of Planning and Investment to revise and abolish restrictions to foreign direct investment in the post and telecommunication industry (investment conditions, investment forms, and the transformation of business cooperation contract into joint venture) in lines with international bilateral and multilateral commitments.
7. Ministry of Labor, War Invalids and Social Affairs
a) Within the second quarter of 2005, submit the government the option for amending Decree No 105/2003/ND-CP dated on
b) Within the second quarter of 2005, develop and submit to the Prime Minister the proposal on labor training to respond to demands of enterprises.
c) Within the second quarter of 2005, scrutinize and submit to the Prime Minister the option for revoking regulations on term less labor contracts; scrutinize the necessity and properness of the application of overtime wages during paid holidays.
8. Ministry of Education and Training
a) Preside over, in coordination with the Ministry of Planning and Investment, immediately issuing the circular guiding the implementation of the governmental Decree 06/2000/ND-CP dated
b) Within the second quarter of 2005, develop and submit to the Prime Minister the plan of university networks to serve as a ground for calling for foreign investments in lines with the international commitment implementation roadmap
9. Ministry of Health
Within the third quarter of 2005, complete and submit to the Prime Minister the healthcare industry plan to serve as a ground for calling for foreign investment in medical treatment, production and supply of medicines, vaccines, biological products and medical equipment in lines with the international commitment implementation roadmap.
10. Ministry of Culture and Information
Within the third quarter of 2005, preside over, in coordination with the Ministry of Planning and Investment, developing and issuing a list of culture and information sectors where foreign investment is inhibited or conditional towards ensuring transparency, clarity and compliance with the international commitment implementation roadmap.
11. Ministry of Trade
a) Within the second quarter of 2005, preside over, in coordination with the Ministry of Planning and Investment, developing a proposal on foreign investment attraction in the service sector (including import and distribution services) in lines with the international commitment implementation roadmap; propose the government to amend legal documents if necessary.
b) Within the second quarter of 2005, preside over, in coordination with the Ministry of Finance, issuing guiding documents for the calculation of cumulative depreciation values in computing the import of fixed assets.
c) Within the fourth quarter of 2005, preside over, in coordination within the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Foreign Affairs and the Ministry of Transport, revising and amending unpractical regulations on transaction costs in commodity movement, customs procedures, quality standards and e-commerce, and report the Prime Minister.
12. Ministry of Justice
a) Within the second quarter of 2005, develop and submit to the Prime Minister the proposal on capacity building in monitoring legal document issuance.
b) Within the second quarter of 2005, preside over, in coordination with ministries and provincial people’s committees, developing and issuing guiding documents for ministries and provincial people’s committees in function the duties of supporting enterprises to comply with the laws.
c) Preside over, in coordination with ministries and provincial people’s committees, extending the national database on legal provisions to all localities.
13. State Bank of
Preside over the establishment of the workgroup which consists of representatives from concerning ministries and agencies to work out and submit to the Prime Minister a proposal on the development of a system of cheque and bill of exchange circulation and a settlement system to replace cash payment.
14. Ministries, agencies and provincial people’s committees
a) Within the second quarter of 2005, given their authorized functions and duties, ministries, agencies and municipal and provincial people’s committees under the direct authority of the central government shall fulfill the following tasks:
- Preside over, in coordination with the Ministry of Planning and Investment, proposing the Prime Minister to immediately amend development plans of industries, products and territories towards abolishing restrictions and discrimination between domestic and foreign investment, removing monopoly and only maintaining domestic conditional protectionism according to international commitments to facilitate foreign investment promotion, especially in the industries of service, steel, electricity, cement and infrastructure; develop and submit to the Prime Minister the plans that have not been existed in the education and vocational training sector.
- Revise licensing and project implementation procedures for foreign investment to eliminate unnecessary procedures, review illegal regulations on investment incentives to report the Prime Minister for final decision
- Revise and develop detailed plans on the implementation of multilateral and bilateral commitments relating to foreign investment.
- Revise and devise detailed plans on the implementation of agreements in the Action Plan for the Vietnam- Japan Joint Initiative to improve the business environment and competitiveness of
- Devise options to support enterprises of every economic sector given the international integration process and the World Trade organization (WTO) accession
b) Within the authorized functions and duties, heighten efforts to fight against corruption and frustrating manners in terms of foreign investment.
15. Implementation organization
a) The Ministry of Planning and Investment shall preside over, in coordination with the Government Office, monitoring, generalizing and reporting the Prime Minister the implementation of this directive.
b) Ministers, heads of ministerial agencies, heads of organizations under the direct authority of the government, chairmen of people’s councils and people’s committees of provinces and cities under the direct authority of the central government shall organize the serious implementation of this directive. Where problems arise that go beyond the authority, report the Prime Minister for instructions
Prime Minister
Phan Van Khai
Signed and Sealed
(Source: HCM City Department of Planning and Investment)
