Directive 14/CT-TTg 2023 raise the efficiency of foreign investment in the new period

DIRECTIVE

On a number of tasks and solutions to raise the efficiency
of foreign investment in the new period^[1]

Over the recent years, foreign investment attraction has been crowned with great achievements, making foreign investment an important part of the economy, positively contributing to the national socio-economic development. Foreign investment in Vietnam has quickly developed in terms of project quantity, capital scale and quality; contributed to creating jobs and generating more income for laborers; heightened the production level and capacity; increased state budget revenues and stabilized the macro-economy; stepped up the economic restructuring and growth model renewal; and heightened Vietnam’s profile and prestige on the international arena.

In order to further promote and raise the quality and efficiency of foreign investment capital attraction and use, the Politburo has issued Resolution No. 50-NQ/TW of August 20, 2019, on orientations for completion of institutions and policies and improving quality and efficiency of foreign investment cooperation through 2030; the Government has adopted Resolution No. 58/NQ-CP of April 27, 2020, on the Government’s Program of Action for implementation of Resolution No. 50-NQ/TW; the Prime Minister issued Decision No. 667/QD-TTg of June 3, 2022, approving the Strategy for foreign investment cooperation in the 2021-2030 period, and Decision No. 308/QD-TTg of March 28, 2023, approving the Program of Action for implementation of the Strategy.

In 2021 and 2022, though the domestic and international economic reality witnessed many complicated upheavals, foreign investment attraction still obtained positive results, particularly in capital disbursement, export, state budget remittance and job creation, thus contributing to improving the payment balance and achieving objectives and tasks of socio-economic development plans.

Currently, the world is changing in a fast, complicated and unforeseeable manner, with many issues arising unprecedentedly beyond expectation. Numerous challenges confront many countries around the world such as economic decline and global energy and food insecurity. Competition among countries in foreign investment attraction in the post-Covid-19 period has become fiercer; the trend of policy change of different countries in order to ensure their strategic autonomy; the coordination among countries in establishing the global codes of administration, including the roadmap for application of the global minimum tax by 2024; the trend of accelerated adjustment of global supply and production chains; the change of investment strategies of multi-national corporations, etc., have strongly and directly impacted foreign investment in the world, the region and Vietnam.

Domestic economy has seen advantages and difficulties as well as challenges. The macro-economy has been stably maintained and inflation has been controlled; GDP growth has been boosted, major economic balances have been ensured. Vietnam’s credit ranking has been raised to “stability” and “positivity” level; domestic enterprises have endeavored to surmount difficulties, actively renew and proactively adapt themselves; foreign investment attraction has seen signs of recovery and development. However, no little latent challenges have affected the targets of stabilizing the macro-economy, controlling inflation and ensuring major balances. Production and business have faced higher production and logistics costs, supply shortage and especially due to anti-inflation measures, our major markets have been narrowed due to broken global supply chains.

The management of foreign investment activities still sees inadequacies and inconsistency here and there, loose coordination between localities is still seen in investment attraction; some localities show signs of departmentalism, causing difficulties or attaching less importance to the inspection and consideration of technological, environmental and labor criteria; the examination and supervision of duty fulfillment by investors remain loose in the coordination between ministries, ministerial-level agencies and authorities at all levels. The business environment still sees no considerable superiorities as compared to average investment attraction competition in the world and the region, technical infrastructure facilities fail to satisfy investors’ expectations, clear grounds remain in shortage and production and business costs have been increased, the source of trained workers remain insufficient, etc. The alignment between foreign investors and domestic enterprises remains limited and there is no alignment in fundamental and stable interests.

In face of the above-mentioned situation and to redress shortcomings and limitations in order to thoroughly improve the investment and business environment, further attract and raise the quality and efficiency of the foreign investment capital flow to serve the national socio-economic development in the new period, the Prime Minister requests ministers, heads of ministerial-level agencies, heads of government-attached agencies, and chairpersons of provincial-level People’s Committees to thoroughly study and focally perform the following tasks:

1. Ministries, ministerial-level agencies and localities shall expeditiously and effectively implement the tasks assigned at the Government’s Resolution No. 58/NQ-CP of April 27, 2020, on the Government’s action program for realization of the Political Bureau’s Resolution No. 50-NQ/TW and the Prime Minister’s Decision No. 308/QD-TTg of March 28, 2023, approving the action plan for materialization of the Strategy on foreign investment cooperation in the 2021-2030 period.

2. To prepare favorable conditions for investment attraction and production and business

a/ The Ministry of Planning and Investment and provincial-level People’s Committees shall speed up the formulation and appraisal of provincial master plans in the 2021-2030 period with a vision toward 2050 by integration method so as to arrange and organize spaces and create opportunities for fast and sustainable development.

b/ Ministries and sectors shall expeditiously review, amend, supplement and improve provisions of specialized laws toward accelerated decentralization and delegation of powers and clear identification of responsibilities between the Government and ministries and sectors, and between the Government, ministries and sectors and local administrations, ensuring the conformity with the spirit of the Government’s Resolution No. 04/NQ-CP of January 10, 2022, on accelerated decentralization and delegation of powers in the state management, and the feasibility and conformity with the implementing capacity of agencies decentralized or delegated with powers; promptly remove administrative procedure hindrances in investment-business activities; and resolutely slash unnecessary and costly administrative procedures.

c/ The Ministry of Planning and Investment shall:

- Report on possibility of formulation of the Law on Venture Investment; develop a database on Vietnamese enterprises satisfying the criteria to act as suppliers for foreign-invested enterprises in a number of sectors and domains;

- Assume the prime responsibility for, and coordinate with the Ministry of Finance and related ministries and sectors in, devising solutions other than tax incentives to attract investment which are not contrary to regulations and international commitments and based on harmony of interests of parties, thereby encouraging existing and new investors and ensuring the equal treatment between enterprises.

d/ The Ministry of Labor, Invalids and Social Affairs shall: (i) apply training and re-training policies and solutions in order to improve workers’ professional skills to meet human resource requirements of investors, including foreign investors; (ii) focus on developing open, flexible, modern, efficient and integrated vocational education systems (with larger training scale and higher training quality, prioritizing high-quality training, new-technology training, promotion of public-private partnership, digital transformation in training, etc.); (iii) review and report on the employment of Vietnamese workers who have once worked overseas and returned to Vietnam, and propose solutions to address the labor shortage; study policies to encourage enterprises to employ Vietnamese talents in foreign countries; formulate mechanism for coordination with big domestic and foreign groups and investors in training under placed orders; (iv) expeditiously revise in June 2023 the Government’s Decree No. 152/2020/ND-CP of December 30, 2020, on foreign workers working in Vietnam and the recruitment and management of Vietnamese workers working for foreign organizations or individuals in Vietnam according to fast-track procedures, in the direction of making it more open and favorable and conformable with international practices and reality in Vietnam, thereby meeting the state management requirements as well as requirements of the development of high-quality human resources for Vietnam in the coming period.

dd/ The Ministry of Science and Technology shall submit in June 2023 to the Prime Minister amendments and supplementations to Decision No. 18/2019/QD-TTg of April 19, 2019, on import of used machinery, equipment and technology lines with simplified requirements and procedures for import of used production chains and equipment into Vietnam to serve the relocation, ensuring that imported machinery and technologies are advanced and conformable with investment attraction orientations; review requirements, order and procedures so as to ensure not to import obsolete, energy-inefficient and polluting technologies; study the formulation of policies to promote cooperation with, and transfer of technology to, Vietnamese enterprises.

e/ The Ministry of Information and Communications shall study and propose in the third quarter of 2023 regulatory sandboxes and breakthrough solutions to attract leading digital technology groups (techfirms) around the world into Vietnam; review, formulate, and propose the promulgation according to its competence mechanisms and policies on information technology parks with a view to forming information industry parks up to international standards and attracting the world’s leading techfirms to invest in research and development; formulate or propose the promulgation of incentive mechanisms for Vietnamese information technology enterprises to research and develop core software, source technologies; continue promoting the development of favorable telecommunications and information technology infrastructure facilities favorable for attracting foreign investment; to spread 5G coverage, develop a broadband, high-speed and ultrahigh-speed optic-fiber cable Internet network to industrial parks, Gigabit optic-fiber cable infrastructure facilities connecting localities and key economic regions of the country.

g/ The Ministry of Finance shall: (i) review inadequacies and inconsistencies of tax regulations in comparison with provisions on tax incentive beneficiaries of specialized laws with a view to proposing, formulating and submitting to competent authorities for promulgation or promulgating according to its competence tax regulations consistent with provisions of other relevant laws in the third quarter of 2023; (ii) review and complete current regulations and work out a roadmap for application of global minimum tax after referring to international experiences and ensuring conformity with Vietnam’s practical conditions and reality, then submit them to the 6^th session of the National Assembly in 2023; (iii) submit in the third quarter of 2023 to the Government amendments to regulations on personal income tax incentives for foreign experts, Vietnamese experts working overseas, and high-quality human resources at home in order to develop  high-quality human resources in Vietnam.

h/ The Ministry of Foreign Affairs shall, via diplomatic and external-relation channels, intensify the promotion, advertising and building of images of Vietnam’s business and investment environment and the Government’s orientations for sustainable development in order to contribute to developing and diversifying opportunities of investment cooperation with the country’s big partners.

i/ The Ministry of Education and Training shall (i) report to the Government in the third quarter of 2023 the study and formulation of policies on improvement of competitiveness, creation of an inspiring environment to selectively attract foreign education and training institutions to invest and establish their divisions in Vietnam; (ii) study and formulate a mechanism to encourage organizations and enterprises to align with educational institutions for making investment in building more physical foundations for high-quality human resource training as soon as they are capable of receiving, mastering and efficiently utilizing technologies introduced from abroad into Vietnam; (iii) review and remove problems related to procedures for establishment and operation of educational institutions in reality; ensure the consistency of relevant regulations; and accelerate the decentralization and delegation of powers to them in association with their accountability performance, thereby raising the education quality.

k/ The Ministry of Public Security and the Ministry of Construction shall expeditiously and effectively implement the Prime Minister’s Official Telegram No. 220/CD-TTg of April 5, 2023, on removal of difficulties and hurdles in fire prevention and fighting.

l/ The Ministry of Health shall review and evaluate problems and inadequacies related to procedures for granting medical equipment and pharmaceutical product circulation permits in order to amend and supplement the Pharmacy Law, ensuring its comprehensiveness, consistency and feasibility, thereby meeting requirements of the socio-economic development and international integration.

m/ Provincial-level People’s Committees shall:

- Assume the prime responsibility for, and coordinate with related ministries and sectors in, formulating and promulgating criteria and conditions on investment ratio per land plot and criteria on number of workers employed in accordance with the Investment Law and Decree No. 31/2021/ND-CP of March 26, 2021, detailing and guiding the implementation of a number of articles of the Investment Law, for use as a basis for the grant of investment registration certificates and for monitoring, inspection and supervision.

- Take the initiative in grasping and understanding problems and difficulties confronted by existing investors in order to identify current difficulties and propose the improvement of policies and law; expeditiously and definitely solve problems facing enterprises in the course of implementation.

- Coordinate with ministries and sectors in formulating plans on incentives and support for important projects of spillover effects for discussion with investors, ensuring their compliance with current regulations and competitiveness as compared to foreign countries.

- Review, formulate and adjust orientations for attraction of investment in localities in accordance with local socio-economic development strategies and plans for the 2021-2030 period.

- Continue improving the investment environment, take the initiative in planning and carrying out efficient investment promotion activities in the context of new circumstances.

- Arrange spaces for industrial production and other fields related to investors’ orientations, thereby helping localities enter into linkages for ensure efficiency of investment projects.

- Plan industrial production zones toward sustainable development and environmental protection, link industrial parks with urban centers and experts’ residence quarters and ensuring safe and healthy living environment; form intensive industrial production areas, thus contributing to developing economies of scale toward sustainable modernization and industrialization.

- Combine new digital technologies such as virtual reality technology and enhanced virtual reality technology for making digital maps of industrial parks and cottage industry clusters in association with the description of practical production status so as to help foreign investors have total image and be able to identify appropriate investment locations in Vietnam.

3. To improve the efficacy and efficiency of the state management of foreign investment

a/ Ministries and sectors shall:

- Review problems in the course of implementation of regulations on investment for promptly providing guidance on solution of such problems or propose competent authorities to promulgate regulations on solution of such problems; resolutely slash cumbersome administrative procedures that cause difficulties for investors and the people.

- Review and revise treaties concerning investment to be conformable with new standards, ensuring the competence of state management and effect of public policies; restrict the possibility of investors’ abuse of mechanisms for settlement of disputes between the State and investors.

- Review and make regulations on investment and business more consistent in order to avoid overlapping that is likely to cause difficulties for investment and business activities of investors.

- Intensify law propagation and dissemination and policy public communication, provide specific guidance so that state agencies and investors can understand and properly apply investment regulations.

- Organize the performance, inspection and supervision of official duties; strictly handle acts of harassing or causing difficulties and problems to investors.

- Reform administrative procedures, digitalize dossiers and procedures related to business and investment, thus contributing to building an e-government under the Government’s resolutions.

- Coordinate with one another in appraising and carefully evaluating technologies, standards, technical regulations, product quality, environmental protection, investment ratio, etc., for foreign investment projects in sectors where investors show signs of abusing Vietnamese origin in order to evade trade remedies and taxes.

- Intensify sincere, substantive and efficient dialogues with enterprise communities in the spirit of interest harmony and risk sharing.

b/ Provincial-level People’s Committees shall:

- Formulate development investment plans and organize the construction of technical infrastructure and social infrastructure facilities outside fences of industrial parks, processing zones, hi-tech parks, functional areas of economic zones.

- Carry out professional operations related to the receipt of dossiers; grant, modification and revocation of investment registration certificates; monitor, oversee and evaluate the practical investment project implementation; implement the regime of investment reporting on the national information system on investment and guide investors and enterprises in carrying out investment procedures and implement the regime of reporting on the system.

- Consider and grant investment registration certificates and notify capital contribution and share purchase according to lists of business lines and trades where foreign investors are restricted to approach the market.

- Fully and strictly comply with regulations on investment, enterprises, land, housing, construction, taxes, etc., in the course of appraising and managing foreign investment projects in order to prevent initiation of lawsuits and arising of disputes at home and abroad.

- Appraise and prudently evaluate technologies, standards, technical regulations, product quality, environmental protection, investment ratio, etc., with foreign investment projects in the fields where investors show signs of abusing the Vietnamese origin to evade trade remedies and taxes.

- Appraise and fully implement regulations on review of factors for assuring the national defense and security with regard to foreign investment projects in border areas, islands and areas that have impacts on national defense and security. 

- Review and revise internal processes and procedures for appraisal and approval of investment policy, ensuring their compliance with regulations on investment and relevant regulations, without causing any inconveniences and increasing expenses for investors.

- Direct investment registration offices in summing up difficulties and challenges facing foreign investment projects in their localities, thereby proposing solutions to immediately tackle difficulties and problems according to their competence and amendments of laws and policies in order to create an open and favorable business and investment environment up to international standards.

- Annually, chairpersons of provincial-level People’s Committees shall chair at least two dialogues with enterprises, particularly FDI enterprises, in their respective localities, thereby promptly understanding difficulties and problems of enterprises and immediately tackling problems falling under their competence.

4. To intensify inspection, supervision and evaluation of investment activities

a/ Ministries and sectors shall intensify inspection, monitoring and overall evaluation of investment in the sectors and fields under their respective management.

b/ Provincial-level People’s Committees shall:

- Direct investment registration offices in requesting enterprises in their localities to strictly implement the regime of periodical reporting on the implementation of investment projects in accordance with law.

- Regularly evaluate practical operation of foreign investment projects in their localities so as to promptly detect cases where investors abuse the openness of the legal system to carry out unhealthy investment activities affecting the business and investment environment.

- Devise measures to strictly handle projects not yet implemented or delayed to be implemented or failing to comply with their investors’ commitments or relevant regulations; apply regulations to terminate the operation and revoke investment registration certificates of these projects.

- Intensify inspection and monitoring of investment registration offices in the grant, modification and revocation of investment registration certificates and the management of investment activities in their localities.

5. To raise the efficiency of investment promotion and attraction activities

a/ To organize promotion activities according to the national list of projects calling for foreign investment in the 2021-2025 period, promulgated by the Prime Minister under Decision No. 1831/QD-TTg of November 1, 2021.

b/ To draw up and promptly announce lists of investment attraction projects in their localities.

c/ To take the initiative in approaching and exchanging opinions with major groups on incentive packages and investment support mechanisms within the framework of high-level diplomatic activities of the Party, State and Government leaders. Leaders of ministries, sectors and localities shall take the initiative in seeking, selecting, approaching and exchanging opinions with, introducing opportunities to and mobilizing international groups and investors to invest in Vietnam, or attracting investment in Vietnam through channels that may influence investment deciders.

d/ Based on experience and lessons learnt from countries around the world on the formulation of investment incentive and support packages (cash grant, labor training, infrastructural development support, measures to cope with the global minimum tax, etc.), ministries, sectors and provincial-level People’s Committees shall take the initiative in studying and proposing competent authorities to consider modifying or supplementing laws and policies for them to become more competitive so as to attract big investment projects of motive force and spillover nature in the new waves of investment.

dd/ To further grasp international investment trends, investment and supply chain relocation trends as well as their impacts on Vietnam in order to propose measures to address difficulties and problems; at the same time, to advise on policies suitable to initiatives and new regulations in order to attract high-quality foreign investment flows in the new situation, particularly in key fields with development potential such as digital technology, semi-conductors, integrated circuits, assembly and manufacturing of electronic hardware, and production of software.

e/ To compile a set of documents on investment promotion in localities and fields under investment-promoting agencies’ management; to intensify training in specialized investment cooperation knowledge and skills with a view to renewing, improving and raising the efficiency of, investment promotion activities.

6. Organization of implementation

a/ Ministers, heads of ministerial-level agencies, heads of government-attached agencies, and chairpersons of provincial-level People’s Committees shall take the initiative in promptly performing the tasks assigned to them under this Directive.

b/ The Ministry of Planning and Investment shall assume prime responsibility for, and coordinate with related ministries, sectors and related agencies in, urging, inspecting and overseeing the implementation of the Directive.-

Prime Minister
PHAM MINH CHINH