Decision No. 176/2002/QD-UB dated December 20, 2002 of the People's Committee of Hanoi promulgating the Regulation on state management over foreign direct investment activities in Hanoi city

DECISION

PROMULGATING THE REGULATION ON STATE MANAGEMENT OVER FOREIGN DIRECT INVESTMENT ACTIVITIES IN HANOI CITY

THE HANOI MUNICIPAL PEOPLE S COMMITTEE

Pursuant to the Law on Organization of the People s Councils and People s Committees;

Pursuant to the 1996 Law on Foreign Investment in Vietnam and the 2000 Law Amending and Supplementing a Number of Articles of the Law on Foreign Investment in Vietnam;

Pursuant to the Government s Decree No.24/CP dated July 31, 2000 detailing the implementation of the Law on Foreign Investment in Vietnam;

Pursuant to the Government s Decree No. 36/CP dated April 24, 1997 promulgating the Regulation on Industrial Parks, Export-processing Zones and High-tech Parks;

Pursuant to the Prime Minister s Decision No. 386/TTg dated June 7, 1997 on the decentralization of the licensing of foreign direct investment projects to the Hanoi Municipal People s Committee;

Pursuant to the Prime Minister s Decision No. 233/1998/QD-TTg dated December 1, 1998 on the decentralization and authorization of the licensing of foreign direct investment projects;

Pursuant to the Planning and Investment Ministry s Circular No. 12/2000/TT-BKH dated September 15, 2000 guiding foreign investment activities in Vietnam;

At the proposal of the director of the municipal Planning and Investment Service in Report No. 1489/TTr-KH&DT dated December 17, 2002,

DECIDES:

Article 1.To promulgate together with this Decision the Regulation on State management over foreign direct investment activities in Hanoi city.

Article 2.This Decision replaces Decision No. 14/QD-UB dated March 23, 1999 of the Hanoi Municipal People s Committee and takes effect 15 days after its signing.

Article 3.The directors of the Offices of the municipal People s Council and People s Committee, the directors of the municipal services, departments and branches, and the presidents of the People s Committees of urban and rural districts, and the heads of the concerned units shall have to implement this Decision.

REGULATION

ON STATE MANAGEMENT OVER FOREIGN DIRECT INVESTMENT ACTIVITIES IN HANOI CITY
(Promulgated together with the Hanoi Municipal People s Committee s Decision No. 176/2002/QD-UB dated December 20, 2002)

Chapter I

GENERAL PROVISIONS

Article 1.This Regulation prescribes the principal contents of State management over foreign direct investment activities in Hanoi city in order to step by step simplify administrative procedures, create favorable environment and conditions for foreign investors to make investment in the area of Hanoi city.

Article 2.Activities of domestic and foreign enterprises and organizations implementing foreign direct investment (FDI) projects, which are subject to the regulation of the Law on Foreign Investment in Vietnam and located in the city s area, shall be managed according to this Regulation and legal documents on foreign investment (including investment projects in industrial parks, BOT, BTO and BT projects).

Article 3.The Hanoi Municipal People s Committee shall perform the function of State management over foreign direct investment activities with the following principal contents:

1. Organizing investment mobilization and promotion.

2. Assuming the prime responsibility for evaluating, granting and adjusting investment licenses, deciding on the operation termination, liquidation and dissolution of foreign-invested enterprises, business cooperation contracts regarding projects falling under its competence.

3. Participating in evaluating investment projects located in the city and licensed by the Ministry of Planning and Investment.

4. Performing other State management functions according to the current regulations.

Chapter II

CONTENTS OF STATE MANAGEMENT OVER FOREIGN DIRECT INVESTMENT IN HANOI CITY

A. INVESTMENT PROMOTION, COMPILATION OF PROJECT DOSSIERS

Article 4.Contents of investment promotion

On the basis of the socio-economic development planning already approved by the Prime Minister, the Hanoi Municipal People s Committee shall:

1. Coordinate with the concerned ministries and branches in drawing up and publicizing the list of projects calling for foreign investment in Hanoi;

2. Organize investment mobilization and promotion at home and abroad;

3. Introduce investors to the concerned agencies so that they can be provided with initial information for the compilation of project dossiers.

4. Reply to the investors within seven working days after receiving the documents seeking investment approval of projects not on the Hanoi Municipal People s Committee s list of those calling for investment.

B. EVALUATION AND INVESTMENT LICENSING

Article 5.Provisions on dossiers of registered projects, evaluation for investment licensing

1. In case of registration for investment licensing, a dossier shall consist of : The documents specified in Article 107 of the Government s Decree No. 24/2000/ND-CP dated July 31, 2000, the application for registration of investment licensing, made according to Form 1, and the enclosed documents made according to Forms 2.b, 3.b, 3.c and 4.b in Appendix II to Circular No. 12/2000/TT-BKH dated September 15, 2000 of the Ministry of Planning and Investment.

2. In case of evaluation for investment licensing, a dossier shall consist of: The documents specified in Article 106 of the Government s Decree No. 24/2000/ND-CP dated July 31, 2000, the application for the investment license and the enclosed documents made according to Forms 2, 3 and 4 in Appendix II to Circular No. 12/2000/TT-BKH dated September 15, 2000 of the Ministry of Planning and Investment.

3. Depending on each specific case and the nature of the projects applying for investment licenses, the investors may be requested to supplement such related papers and documents as:

- Documents related to the projects environmental impact assessment (if the projects are on the list of those requiring environmental impact assessment reports, announced by the Ministry of Science, Technology and Environment).

- Documents related to land use (for projects with land use demands).

- Agreements and economic contracts related to the execution of the investment projects (for example: hiring of workshops for the project execution, organization of the supply of raw materials)

- Preliminary designs of the architectural options, for projects involving construction works constituting part of the technical and economic expositions.

- Estimated funding for compensation and the resettlement plan (if any).

Article 6.Investment projects which the Municipal People s Committee is decentralized to consider and evaluate include:

1. Projects subject to registration of investment licensing as prescribed in Article 105 of the Government s Decree No. 24/200/ND-CP dated July 31, 1996. The contents of their dossiers are specified at Point 1, Article 5 of this Regulation.

2. The other projects subject to evaluation for investment licensing, categorized into the two following particular groups according to their objectives and capital sizes:

- The group of projects capitalized at under US$ 5 million.

- The group of production projects capitalized at US$ 5 million or over.

The contents of their dossiers are specified in Clauses 2 and 3, Article 5 of this Regulation.

Article 7.Contents to be evaluated

٭ The foreign and Vietnamese investors legal status and financial capability.

٭ The projects compatibility with the branch and area planning.

٭ Socio-economic benefits (the possibility to create new production capacities, new production or business lines and new products; market expansion; the possibility to create jobs for laborers; the project s economic benefits and budget remittances,).

٭ The technical and technological levels to be applied, the rational use and protection of natural resources, protection of the ecological environment.

٭ The rationality in land use and the valuation of assets contributed as capital by the Vietnamese parties (if any).

٭ The rationality of the compensation and resettlement plans (if any).

Article 8. Competence to make decision, and time limits for evaluation and investment licensing

1. For projects capitalized at under US$ 5 million, not technically sophisticated nor socially or politically sensitive, the municipal Planning and Investment Service shall sum up written comments thereon of the concerned agencies, departments and branches, then submit them to the Municipal People s Committee for investment licensing. The time limit for consideration and licensing of investment shall not exceed 15 working days after the receipt of valid dossiers.

2. For production projects capitalized at US$ 5 million or over, the municipal Planning and Investment Service shall organize the evaluation thereof, and report such to the municipal People s Committee for investment licensing. The time limit for consideration and licensing of investment shall not exceed 20 working days after the receipt of valid dossiers.

3. For projects subject to registration for investment licensing, the municipal Planning and Investment Service shall consider and submit them to the Municipal People s Committee for investment licensing. The time limit for consideration and licensing of investment shall not exceed 10 working days after the receipt of valid dossiers.

For projects subject to registration for investment licensing and having objectives similar to those of other projects already licensed within one year before, the sending of dossiers to the concerned agencies for comments shall be omitted. The municipal Planning and Investment Service consider and submit them to the municipal People s Committee for investment licensing. The time limit for consideration and licensing of investment shall not exceed seven working days after the receipt of valid dossiers.

4. For projects which fall under the licensing competence of the Ministry of Planning and Investment and are evaluated jointly by the Municipal People s Committee, the time limit for the Municipal People s Committee to issue its written comments shall not exceed 10 working days after the receipt of valid dossiers.

5. In case of refusal to grant investment licenses, within 20 working days the municipal Planning and Investment Service shall draft the replies and submit them to the municipal People s Committee for notification to the investors of the reasons therefor and for, at the same time, sending of copies thereof to the concerned agencies.

C. PROJECT DEPLOYMENT AND EXECUTION

Article 9. After being granted the investment licenses, the enterprises shall have to carry out the following administrative procedures:

1. Convening a meeting of the Managing Board, adopting the list of Managing Board members, appointing the chairman and vice chairmen of the Managing Board, appointing the general director, deputy general directors and chief accountant.

2. Registering the key personnel, including the chairman and vice chairmen of the Managing Board, the general director, deputy general directors and chief accountants, at the municipal Planning and Investment Service (for Vietnamese individuals appointed to key posts in enterprises with 100% foreign capital, the written verifications of their judicial records as prescribed by current law are required).

3. Publicizing announcement on the enterprise establishment on central and local newspapers for three consecutive issues, with such major contents as the enterprise s name, address, objectives, capital size, representatives

4. Making registration for seal carving at the Hanoi city police.

5. Opening bank accounts.

6. Registering the to be-applied accounting regimes at the Ministry of Finance and the tax codes at the Hanoi municipal Tax Department.

7. Carrying out the procedures to apply for work permits for foreigners at the municipal Labor, War Invalids and Social Affairs Service.

8. Making registration of entry, exit and residence procedures for foreigners, practice registration, registration of the use of communication equipment and devices, registration of goods quality and trademarks’

9. Registering import plans with the municipal Trade Service.

10. Applying for the land use right certificate, the approval of technical designs of construction works, conducting bidding for or selection of consultants, organizing bidding for procurement of goods’(if any).

11. Other administrative procedures as prescribed.

D. ADJUSTMENT OF INVESTMENT LICENSES

Article 10. In the course of operation, foreign-invested enterprises and business cooperation parties may propose adjustments of the provisions of their investment licenses. The Municipal People s Committees shall decide on the granting of adjusted licenses to projects it is decentralized by the Government to grant investment licenses under the provisions in Article 111 of the Government s Decree No. 24/2000/ND-CP dated July 31, 2000 and the guidance in Articles 15 and 16 of Circular No. 12/2000/TT-BKH dated September 15, 2000 of the Ministry of Planning and Investment.

Article 11.The contents of the dossiers of application for adjustment of investment licenses shall comply with the provisions in Article 17 of Circular No. 12/2000/TT-BKH dated September 15, 2000 of the Ministry of Planning and Investment.

Article 12.Time limits for processing dossiers of application for adjustment and/or supplementation of investment licenses

1. For projects decentralized by the Government, the Hanoi Municipal People s Committee shall consider and decide within 15 working days after receiving the valid dossiers.

2. For other projects, the Municipal People s Committee shall send its written comments to the Ministry of Planning and Investment within seven working days after receiving the valid dossiers. The above time limit shall not include the time for foreign-invested enterprises or business cooperation parties to give additional explanations.

Chapter III

RESPONSIBILITIES OF THE MUNICIPAL SERVICES, DEPARTMENTS AND BRANCHES IN SETTLING ADMINISTRATIVE PROCEDURES CONCERNING FOREIGN DIRECT INVESTMENT IN HANOI CITY

Article 13.

1. Quarterly, the Municipal People s Committee shall preside over briefings on foreign investment with the municipal services, departments and branches, aiming to speed up the investment promotion work, reach agreement on measures to create conditions for foreign-invested enterprises, business cooperation, BOT, BTO and BT contracts to accelerate their production and business activities.

2. The Hanoi Municipal People s Committee shall assign the municipal services and branches, the People s Committees of urban and rural districts to perform the State management over foreign direct investment in Hanoi city according to Articles 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24 and 25 below.

Article 14.The municipal Planning and Investment Service shall assume the main responsibility in performing the State management over foreign direct investment activities in Hanoi city.

1. To work out investment promotion plans according to the contents specified in Article 4 of this Regulation.

2. To give guidance to, receive and evaluate the dossiers of, projects decentralized by the Government to the Municipal People s Committee.

3. To coordinate with the functional agencies in supervising the capital contribution and the implementation of the provisions of investment licenses and other relevant legal documents; to settle problems faced by investors; to conduct periodical inspection and supervision of the operation of foreign-invested enterprises, business cooperation, BOT, BTO and BT contracts in Hanoi city.

4. To sum up, analyze, and assess socio-economic efficiency of foreign investment activities in Hanoi city.

5. To sign written certifications of the registration by the enterprises of their managerial and executive personnel, to approve the setting up of transaction offices, branches (non-production); relocation of transaction and executive offices of the foreign parties to business cooperation contracts, branches (non-production) of foreign-invested enterprises, business cooperation, BOT, BTO and BT contracts.

6. Quarterly and annually, the municipal services, departments and branches shall have to notify the municipal Planning and Investment Service of the implementation situation and the results of settlement of matters related to the operation of foreign-invested enterprises, which fall under the scope of their respective functions and tasks.
The municipal Planning and Investment Service shall sum up and report them to the Municipal People s Committee.

Article 15.The Hanoi Board of Management of Industrial Parks and Export Processing Zones is the agency directly managing industrial parks in Hanoi, having the responsibility:

1. To elaborate the Regulation on management of industrial parks on the basis of the already promulgated model Regulation, submit it to the municipal People s Committee for promulgation. To organize the formulation and management of the implementation of a detailed planning on, and the tempo of construction and development of industrial parks.

2. To urge and supervise the construction of infrastructure works inside and outside the concerned industrial parks so as to ensure their synchronous construction and operation according to the approved planning and tempo.

3. To support the mobilization of investment in industrial parks.

4. To receive the applications and dossiers of investment projects, organize the evaluation of, and grant investment licenses to, foreign investment projects as authorized.

5. To coordinate with the municipal agencies, departments and branches in supervising the capital contribution, inspecting and supervising the implementation of investment licenses and law provisions on labor and wages by enterprises in the industrial parks.

6. To manage service and trading activities in the industrial parks according to law.

7. To reach agreement with the industrial park infrastructure development company on the pricing of subleased land associated with constructed infrastructure projects, and the charging of assorted services in accordance with the current policies and laws.

8. To send periodical and annual reports on the formation, construction, development and management of industrial parks to the municipal Planning and Investment Service for summing up and reporting to the municipal People s Committee on foreign investment activities in Hanoi city.

The time limit for evaluation and investment licensing shall be 15 working days after the receipt of complete and valid dossiers. Before issuing decisions, the Board of Management shall have to send project summaries to the concerned ministries and branches for comments on matters falling under their respective competence and not yet specified.

Article 16. On the basis of the proposals of the municipal Planning and Investment Service, the municipal Planning and Architecture Service shall have to:

1. Recommend construction locations and grant planning certificates (or planning agreements) for use as a basis for the investors to compile investment dossiers. The implementation time limit shall not exceed 20 working days after the receipt of valid dossiers.

2. Determine the red boundary lines and issue urban technical infrastructure statistics within 12 working days after receiving the valid dossiers.

3. Reach agreement on the general ground plan and certify the preliminary architectural designs within 12 working days after receiving the valid dossiers (applicable only to investment projects capitalized at over US$ 5 million and carried out in areas subject to strict planning management requirements).

Article 17.The municipal Finance and Pricing Service shall:

1. Within five working days after receiving the complete and valid dossiers of the projects, enclosed with the official applications, determine and adjust the land rent prices for foreign-invested projects, then submit them to the Municipal Peoples Committee for decision.

2. Valuate the assets contributed as capital by the Vietnamese parties in joint ventures (for State enterprises managed by the Hanoi Municipal Peoples Committee).

3. Supervise the accounting and financial work.

Article 18. The municipal Trade Service shall have to :

1. Consider and approve import plans of foreign-invested enterprises, and parties to business cooperation contracts (not including foreign-invested enterprises in export-processing zones and industrial parks) as authorized by the Ministry of Trade.

2. The time limit for considering and approving import plans shall be 10 working days after the receipt of complete and valid dossiers of enterprises. Where the dossier of an enterprise in incomplete, immediately notify such to the enterprise or where the licensing does not fall under its competence, reply in writing the enterprise concerned, clearly stating the reasons therefor, within three working days.

3. Directly or together with the concerned agencies supervise the importation by foreign-invested enterprises in implementation of their investment licenses.

Article 19.The municipal Cadastral, Housing and Land Service shall have to:

1. Receive and evaluate the foreign investment projects dossiers of application for land allocation or lease, then submit them to the Municipal Peoples Committee or the Prime Minister for decision.

The evaluation time limit shall not exceed 10 working days after the receipt of valid dossiers.

2. After the land allocation or lease decisions are issued to the projects, the municipal Cadastral, Housing and Land Service, and Finance and Pricing Service, the Hanoi Municipal Tax Department, the Peoples Committee of urban or rural districts and the investors shall have to implement such decisions according to the regulations of the Hanoi Municipal Peoples Committee on the procedures for allocation or lease of land in Hanoi city.

Article 20. The municipal Construction Service shall have the responsibility to perform the State management over construction in foreign investment activities and manage foreign contractors that enter the country to undertake construction and consultancy on construction of works in Hanoi city, concretely:

1. To evaluate technical designs of Group-A projects involving small constructions (their construction and installation values are under 10% of total investment capital and do not exceed US$ 10 million) and of Group-B projects, then submit them to the Municipal Peoples Committee for decision and approval (except BOT, BTO and BT projects). The time limit for evaluation of technical designs and issuance of decisions to approve technical designs and work construction shall not exceed 20 working days after the receipt of valid dossiers.

2. To manage the works quality according to the Construction Ministrys regulations.

3. To grant contracting permits to foreign contractors to execute bidding packages of Group-B projects or of Group-A projects with construction and installation values of under US$ 10 million.

4. To be responsible for supervising the construction of foreign-invested works, the operation of foreign-invested enterprises, business cooperation contracts, construction business and construction consultancy activities, and supervise the activities of foreign contractors according to the Construction Ministrys regulations.

Article 21.The municipal Science and Technology Service shall have the responsibility to guide the technological evaluation, consider environmental impact assessment reports and industrial properly matters, and grant written agreements within seven working days, regularly inspect environmental protection conditions; permit or suspend the operation of projects in accordance with the States regulations on environmental protection standards.

Article 22.The municipal Labor, Ward and Invalids and Social Affairs shall have to the responsibility to guide investors in signing labor contracts and collective labor agreements, implementing social insurance and wage regimes as well as other regimes and policies in accordance with the provisions of the Labor Code and its guiding documents. To consider and grant work permits to foreign laborers working in foreign direct investment projects according to the Governments regulations. To monitor, supervise and inspect the implementation of labor regimes and policies in the course of operation of foreign-invested enterprises, business cooperation, BOT, BTO and BT contracts.

The time limit for consideration and granting of work permits to foreigners shall be seven working days after the receipt of complete and valid dossiers.

In case of refusal to grant work permits, written replies must be issued, clearly stating the reasons therefor.

Article 23.The Hanoi municipal Tax Department shall have the responsibility to:

- Determine tax rates for projects within seven working days after receiving the valid dossiers.

- Guide foreign-invested enterprises in declaring and paying taxes according to law provisions.

- Supervise and inspect the fulfillment of tax obligations in foreign investment activities according to its functions and tasks.

Article 24. The Peoples Committee of urban and rural districts shall perform their State management functions in their respective localities, having the responsibility to:

1. Set up ground clearance compensation councils and working teams five days after receiving the notices of the Municipal Steering Committee for Ground Clearance.

2. Give guidance to investors on claims related to compensation, ground clearance, resettlement and employment when land is recovered for project execution.

3. Supervise, guide, propagate, explain, and issue replies according to the regulations on, the implementation of compensation policies; settle problems in the compensation work according to their competence; organize the investors payment of compensation and receipt of land grounds.

4. Supervise the process of project execution in their respective localities.

Article 25. The Hanoi Municipal Steering Committee for Ground Clearance shall:

1. Seven days after receiving the dossiers of the investment projects, issue land-allocating decisions and investment funding (certified by the banks where accounts are opened), and notices on assigning the district-level Peoples Committees to recover land and set up ground clearance councils.

2. Base itself on the States policies and laws and the regulations of the Hanoi Municipal Peoples Committee to guide and inspect the implementation of compensation policies by the investors and the ground clearance compensation councils of urban and rural districts.

3. Evaluate and approve compensation and settlement plans.

4. Direct the timely settlement of matters arising in the compensation and ground clearance work according to the regulations of the Hanoi Municipal People’s Committee on the order of organizing the implementation of damage compensation and resettlement when land is recovered in the area.

5. Perform, according to its assigned functions, the assigned tasks regarding the allocation of the house and residential land funds for projects requiring relocation and resettlement.

Article 26.The other services, departments and branches of the city shall perform the State management over the operation of foreign-invested enterprises according to their respective functions and tasks.

Chapter IV

PROVISIONS ON THE REGIMES OF REPORTING, STATISTICS, INSPECTION, SUPERVISION AND HANDLING OF VIOLATIONS

Article 27.Foreign-invested enterprises and business cooperation parties shall implement the periodical reporting and statistical regimes under the provisions of Inter-Ministerial Circular No. 01/LB dated March 31, 1997 of the General Department of Statistics and the Ministry of Planning and Investment. All violations of the States regulations on the statistical regime shall be sanctioned under the Governments Decree No. 93/1999/ND-CP dated September 7, 1999 on sanctioning administrative violations in the statistical domain.

For business cooperation contracts, the parties thereto shall agree on appointing a coordinating board or one party to represent them in performing the reporting and statistical work, and shall have to provide data for the representing party.

Foreign-invested enterprises and business cooperation parties shall have to send audited annual financial reports to the Ministry of Finance, the Ministry of Planning and Investment, the Hanoi Municipal Peoples Committee (the municipal Planning and Investment Service) and the Statistics Department.

Article 28.The inspection and supervision of the operation of foreign-invested enterprises and business cooperation parties in Hanoi city shall comply with the provisions in Article 119 of the Governments Decree No. 24/2000/ND-CP dated July 31, 2000 and Article 60 of Circular No. 12/2000/TT-BKH dated September 15, 2000 of the Ministry of Planning and Investment.

The inspection and supervision shall be conducted periodically or unexpectedly by specialized branches through the coordinating agency being the municipal Planning and Investment Service in coordination with the functional municipal services, departments and branches and the People’s Committees of the concerned urban and/or rural districts.

Article 29. If foreign-invested enterprises, business cooperation parties, foreign investors and laborers violate the provisions of investment licenses and Vietnamese law, they shall be sanctioned according to law provisions.

For projects which are not deployed (particularly cases of failure to contribute legal capital) without plausible reasons, within six months after the dates of granting of investment licenses, the Municipal Peoples Committee shall consider and withdraw their investment licenses.

For projects where the investors deliberately delay or prolong their implementation, the Municipal Peoples Committee shall assign the municipal Planning and Investment Service to coordinate with the concerned agencies, departments and branches in inspecting, summing up and reporting the handling options to the Municipal Peoples Committee.

For big projects or complicated cases, the Municipal Peoples Committee shall directly direct the inspection and supervision thereof.

Chapter V

IMPLEMENTATION PROVISIONS

Article 30. Annually, the Municipal Peoples Committee shall consider, commend and/or reward enterprises and/or individuals that make good achievements in production and business activities, actively contributing to the socio-economic development of the Capital.

Article 31. If public employees and State management agencies of the city abuse their powers to cause difficulties and troubles or hinder foreign investment activities, they shall, depending on the seriousness of their violations, be handled for their responsibilities or examined for penal liability according to law provisions.

Article 32. Foreign-invested enterprises, business cooperation parties and foreign investors that violate the provisions of investment licenses and law shall be handled according to law provisions.

Article 33.This Regulation takes implementation effect 15 days after its signing.