Resolution No. 50-NQ/TW 2019 orientations for completing policies of foreign investment cooperation by 2030

RESOLUTION OF THE POLITBURO 
PROVIDING ORIENTATIONS FOR COMPLETING INSTITUTIONS AND POLICIES, AND IMPROVING THE QUALITY AND EFFICIENCY
OF FOREIGN INVESTMENT COOPERATION BY 2030

I – THE SITUATION AND ITS CAUSES

1. Over 30 years of renovation, our Party and State have issued many guidelines, policies and laws to attract and manage foreign investment, create a favorable business and investment environment, gradually approaching to international practice. The foreign-invested economic sector has developed rapidly and effectively, becoming an important part of the economy, contributing positively to the socio-economic development of the country. 

Foreign investment activities have been flourishing with many hi-tech multinational corporations and large enterprises investing in our country; capital size and project quality have been increased, contributing to creating jobs and income for employees; improving production capacity and productivity; increasing state budget revenues to stabilize macroeconomy; promoting economic restructuring and innovating the growth model; enhancing Vietnam s position and reputation in the international arena.

2. However, the mobilization, management and operation of foreign investment still have limitations and emerging problems. Institutions and policies on foreign investment are not in accordance with development requirements. Preferential policies are still unconcentrated, inconsistent and unstable. The investment and business environment and the competitiveness has been improved, but still limited; The quality and efficiency of attracting and managing foreign investment are not high. Socio-economic infrastructure and high-quality human resources have not met the requirements; there remains the lack of essential social and cultural institutions. The mechanisms and capacity to handle disputes remain less effective. The organizational structure and capacity to attract and manage foreign investment are inadequate, dispersed, unable to meet the requirements and lack of proactivity and professionalism. 

The number of small-scale, low-tech, and labor-deficient projects is still large; the distribution is uneven; the ratio of implemented capital per registered capital is still low. The proportion of contributions to the state budget tends to decrease. Connectivity and interaction with other sectors of the economy are not close, while the spillover effect on productivity and technology is not strong; localization rate remains low. The transfer pricing, illicit investment and falsified investment are increasingly sophisticated and tend to increase. Some enterprises and projects have wastefully used resources and land, violated policies and law provisions on labor, wages, taxes, social insurance, environment...; many complex domestic and international disputes and complaints have arisen. The development and promotion of the role of party organizations, trade unions, socio-political organizations and socio-professional organizations in the foreign-invested economic sector have some difficulties.

3. The abovementioned limitations and weaknesses are caused by many reasons, which mainly are subjective causes. The awareness of all levels, sectors and the whole society is still insufficient and inconsistent; The mobilization of foreign investment lacks selection. The thinking and orientation of innovation as well as the improvement of relevant mechanisms, policies and laws have not met practical requirements without comprehensive implementation; many regulations are still overlapping and contradictory. The capacity of the officials in charge of attracting and managing foreign investment in many places is still limited, lacking proactivity and creativity; analysis and forecasting capabilities are still inadequate. Inspection and handling of violations remain not strictly sometimes and somewhere. 

II- VIEWPOINTS AND OBJECTIVES

1. Viewpoints

- Foreign-invested economic sector is an important component of Vietnam s economy, encouraged and facilitated for long-term development, healthy cooperation and competition with other economic sectors. The Government respects and protects legitimate rights and interests of investors; ensures harmonization of interests of the Government, investors and employees in the enterprises.

- Building and perfecting institutions and policies on foreign investment in accordance with development trends, approaching international standards and harmonizing with international commitments, ensuring the consistency, publicity, transparency and high competition.

- Proactively attracting and selectively cooperating on foreign investment, taking quality, efficiency, technology and environmental protection as the main evaluation criteria. Priority is given to projects with advanced technology, new technologies, high technology, clean technology, modern management, high added value, spreading and connecting with global production and supply chains.

- Multilateralization and diversification of partners and forms of investment, interwoven benefits in foreign investment cooperation and organic connection with domestic economic zones shall be focused in consistency with the economic restructuring orientations and sustainable development goals; ensuring environmental protection, national defense, security, welfare, social order and safety and improving the independence and autonomy of the economy.

- Strengthening the Party s leadership, the effectiveness and efficiency of the State s management, the role of the Fatherland Front, socio-political organizations and promoting the dynamism and creativity of the people and enterprises in completing, enforcing and supervising the implementation of institutions and policies on attracting and cooperating foreign investment.

2. General objectives

Completing institutions and policies of foreign investment cooperation with high competitiveness and international integration; meeting the requirements of renewing the growth model, restructuring the economy, protecting the environment, solving social problems, improving productivity, quality, efficiency and competitiveness of the economy. Basically, overcoming existing limitations and shortcomings in building, completing and organizing the implementation of institutions and policies on foreign investment cooperation. Creating the business environment and competitiveness as of ASEAN 4 Group before 2021 and ASEAN 3 Group before 2030.

3. Specific objectives

Striving for the foreign invested sector to achieve some of the following major oriented objectives:

- Registered capital shall be about USD 150-200 billion (USD 30-40 billion/year) in the period of 2021-2025; about USD 200-300 billion (USD 40-50 billion/year) in the period of 2026 – 2030.

- Implemented capital shall be about USD 100-150 billion (USD 20-30 billion/year) in the period of 2021-2025; about USD 150-200 billion (USD 30-40 billion/year) in the period of 2026-2030.

- Percentage of enterprises using advanced technology, modern management, environmental protection and high-tech orientation shall increase by 50% by 2025 and 100% by 2030 compared to 2018.

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

- Proportion of well-trained workers in the labor use structure shall increase from 56% in 2017 to 70% by 2025 and 80% by 2030.

III- MAJOR TASKS AND SOLUTIONS

1. Perfecting general institutions and policies on foreign investment

- Completing the legal system to overcome current limitations and shortcomings. Amending and supplementing the rules of procedures, investment conditions, the concept of the investment activities, the list of geographical areas, sectors, subjects applied investment incentives in the laws on foreign investment and related laws to agree on implementation and ensure compliance with Vietnam s international commitments.

- Studying and developing regulations to overcome the situations of "thin capital", transfer pricing, illicit investment, falsified investment. Studying to supplement "the conditions on national defense and security" in the process of considering and issuing investment registration certificates (or documents of equivalent legal validity) for new investment projects and the process of reviewing and approving investment activities in the form of capital contribution or purchase of shares and paid-in capital.

- Completely synchronizing the provisions of the law on investment, securities and foreign exchange management in the direction of clear identification between direct investment and indirect investment; unifying the law provisions on enterprises and the foreign exchange management on trading accounts and transferring shares.

2. Completing institutions and policies to attract investment

- Concretely building the list of limited or non-attracted foreign investment in accordance with international commitments; If not included in this list, foreign investors shall be treated equally as domestic investors. Encouraging foreign investors to enter the market in non-protected sectors and areas of Vietnam.

- Developing investment criteria to select and prioritize investment attraction in accordance with the planning and development orientation of sectors, branches and localities. Developing security assessment mechanisms and conducting security reviews for projects and foreign investment activities that may affect national security.

- Renovating investment incentive mechanisms and policies; formulating and supplementing incentive mechanisms for enterprises to effectively operate and well fulfill their commitments; differentiating preferences between different investment sectors. Adopting policies to encourage technology cooperation and transfer based on voluntary agreement. Applying the principle of investment incentives associated with meeting the conditions, specific commitments and post-inspection mechanisms, requesting reimbursement when violating commitments.

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

- Developing adequate incentive mechanisms to increase the linkage between foreign investment and domestic investment, and between areas of priority attraction; developing industrial clusters and value chains, contributing to improving domestic added value, product competitiveness and national position in the global value chain. Encouraging technology transfer and management for Vietnamese enterprises. Adopting policies to encourage foreign-invested enterprises to train and improve skills and qualifications for Vietnamese laborers; to use Vietnamese workers who have worked and trained in advanced countries.

- Upgrading and perfecting the law provisions on auxiliary industries, start-ups and innovations. Supporting domestic enterprises to connect with foreign-invested enterprises, improving technology absorption capacity, gradually building technology autonomy and participating in global value chains.

- Developing policies to attracting balanced and reasonable foreign investment among regions; ensuring the attraction and cooperation on foreign investment in the right direction, planning and development requirements. Studying and formulating preferential mechanisms to attract foreign investment in infrastructure development for the northern mountainous region, the Central Highlands and the Mekong River delta.

- Enhancing standards and technical regulations on products, environmental protection, resources and energy saving in accordance with regional and international standards. Do not consider expanding and extending activities for projects using outdated technology, potentially causing environmental pollution and resource abuse.

- Continuing to study and complete institutions and policies for the economic zones, industrial parks and high-tech zones, agricultural zones with high technology and the other similar models in the direction of clearly defining the development focuses and outstanding mechanisms and policies in line with the characteristics of each model, ensuring the coherence and synchronization with other regions.

- Diversifying and effectively promoting the public-private partnerships (PPP) in infrastructure investment, the forms of merger and acquisition (M&A) for foreign investors. Study and piloting new investment methods and business models to take advantage of opportunities from the Fourth Industrial Revolution.

3. Completing institutions and policies to protect and promote the responsibilities of investors

- Amending and supplementing regulations to ensure the rights, obligations, recognition and protection of legal ownership of assets, intellectual property rights, investment capital, income and other legitimate interests of the relevant investors and stakeholders in line with international commitments, as well as sanctions to strictly handle violations.

- Amending and supplementing law provisions on labor, employment and wages, ensuring harmonization of benefits of workers and employers in the direction of transparency, meeting the requirements of international integration. Reasonably adjusting the minimum wage gap between regions to limiting labor concentration in big cities, reducing pressure on infrastructure. Specifying the responsibilities of infrastructure investors and foreign-invested enterprises in building social houses, workers houses, kindergartens, medical, cultural and sport establishments for workers.

- Specifying the responsibilities of investors for environmental protection in the process of investment, project implementation and business activities during the project implementation period in accordance with law provisions.

4. Completing institutions and policies on investment management and supervision

-Improving the analysis and forecasting capacity of agencies elaborating policies and institutions; promptly issuing regulations to adjust new economic relations, new business models and methods... to facilitate investment and business activities of investors and management activities of agencies government.

- Reviewing and perfecting regulations on antitrust in accordance with international practices; on meeting economic concentration conditions under law provisions on competition; on defense and security assurance when foreign investors and foreign-invested enterprises contribute capital, purchase shares, merge or buy enterprises in Vietnam.

- Perfecting law provisions on anti-transfer pricing, considering making laws on anti-transfer pricing; completing and supplementing strict regulations in the laws on tax, foreign exchange, customs, investment, science and technology, database building, information disclosure... to control, manage and prevent price transfer from the inception and during the operation of foreign-invested enterprises. Building powerful anti-transfer pricing agencies; and interdisciplinary and specialized inspection mechanisms to prevent and limit the transfer pricing of foreign-invested enterprises.

- Developing mechanisms to prevent and solve problems and complaints of investors. Improving the quality and effectiveness of dispute settlement and enforcement institutions. Completing law provisions to effectively deal with difficulties for projects that commit to transfer non-refundable assets of foreign investors to the State or the Vietnamese parties after the operation ends and handle the cases in which foreign investors are absent or flee in the process of implementing investment activities in Vietnam.

- Promoting the assignment, decentralization, authorization and coordination mechanisms among State management agencies; Applying one-stop and inter-one-stop mechanisms. Developing criteria to assess the effectiveness of foreign investment in economy, society, environment and national defense, security... Completing law provisions on management and supervision of foreign investment, prescribing the responsibilities of the ministries, branches and localities in presiding over and coordinating the management and supervision of foreign investment activities.

- Developing mechanisms and policies to protect the domestic distribution market, creating conditions for domestic enterprises to develop and conform to international commitments.

5. Innovating and improving the effectiveness of investment promotion

- Continuing to innovate, improve and enhance the effectiveness of investment promotion. Reviewing and restructuring the system of existing investment promotion agencies (do not establish new ones) in the direction of professional, independent and non-overlapping with agencies with state management functions on foreign investment; considering the ability to flexibly connect with trade promotion and tourism, in accordance with the requirements and characteristics of each locality,

- Strengthening the coordination and association between the Central Government and local authorities, between regions, between state management agencies and professional associations in investment promotion. Actively promoting investment with objectives, focal points and key points associated with new investment cooperation criteria; continuing to maintain traditional markets and partners, while expanding markets and making new partners. Diversifying investment promotion activities and methods; focusing on promoting on-site investment with specific successful cooperation projects. Sufficiently investing in promotion activities. Prioritizing the implementation of national, regional and interdisciplinary investment promotion activities.

- Make the information system of socio-economy, laws, policies, planning, plans and markets... public and transparent. Strengthening the mechanisms of dialogue and reform, and expanding the reception of recommendations and feedbacks from investors; Thoroughly and promptly overcoming difficulties and problems related to the on-going projects.

6. Improving the intensity and efficiency of state management on foreign investment

- Authorities at all levels shall strictly enforce the law provisions on investment and other relevant provisions on foreign investment activities to avoid international complaints and disputes. Strictly handling the unsynchronized implementation of institutions and policies between the central and local levels, and among localities. Strictly prohibiting the granting, adjustment, management and negotiation of foreign investment projects, promulgation of regulations on investment incentives and supports..., which are contrary to their competence and law provisions. The negotiation and agreement on Government Guarantee and Undertakings (GGU), BOT or offtake agreements... shall comply with the law provisions.

- Correcting the management and implementation of investment projects, ensuring economic - social - environmental efficiency in line with planning, according to the selection criteria of projects... Ensuring the procedures for granting, adjustment, withdrawal and termination of operation of foreign investment projects in accordance with law provisions.

- Strengthening examination, supervision and inspection in association with improving the responsibilities of local authorities and leaders in observing guidelines and policies of the Party and law provisions of the Government relating to foreign investment. Completely handling projects that have caused environmental pollution, inefficient land use and business losses for many years or projects that did not follow their commitments. Preventing and resolving early and effectively the disputes related to foreign investment.

- Consolidating the state management apparatus on foreign investment in a streamlined, effective, efficient and unified manner in the ministries, branches and localities, meeting the requirements of interdisciplinary and inter-regional management in the localities and across the country. Improving the assignment, decentralization and coordination among ministries, branches and localities in association with strengthening inspection and supervision.

- Focusing on improving the capacity and working morals of the staff of state management on foreign investment in ministries, branches and localities in accordance with the new requirements and tasks of foreign investment management.

- Completing the national database and information system interlinked with other fields of labor, land, tax, customs, credit, foreign exchange... and localities. Improving the quality of statistics to be prompt, sufficient, accurate and consistent with international practices.

- Coordinating closely with business associations and international organizations to improve quality and efficiency of voting and honoring foreign-invested enterprises; periodically voting and honoring typical foreign investors.

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

- Developing party organizations in foreign-invested enterprises, taking into account specific factors; guiding and instructing clearly on the organizational model, operating modes and activities, for party organizations in foreign-invested enterprises; Strengthening the connectivity between the Party and its members with businesses and business owners based on common concerns, development goals and interests.

- Party committees at all levels shall strengthen leadership and direct the implementation of Party development work in the foreign-invested economic sector; selecting and arranging officials with qualifications, capabilities and political qualities to manage foreign investment activities and regularly inspect and supervise the implementation process.

- Developing and improving the performance of trade unions at foreign-invested enterprises, promoting the role of trade unions in representing and protecting legitimate rights and interests of workers, building the harmonious, stable and progressive labor relationship, increasing the dialogue between business owners and employees, with the goal that 100% of enterprises with at least 25 employees each shall have trade unions.

- Promoting the role of supervision and criticism of the Vietnam Fatherland Front, socio-political organizations and socio-professional organizations in the implementation of the guidelines and policies of the Party and law provisions of Government on foreign investment.

IV- ORGANIZATION OF IMPLEMENTATION

1. The Party Committees of the National Assembly and the Government shall amend, supplement and perfect the law provisions on foreign investment cooperation and other relevant law provisions; Strengthen the supervision of the National Assembly, the Standing Committee of the National Assembly, the Ethnic Council, committees of the National Assembly, National Assembly delegations and National Assembly deputies on the observance of law provisions and policies on foreign investment cooperation. 

2. The Party Committee of the Cabinet shall instruct the elaboration and organize the implementation of the foreign investment cooperation strategy in the period of 2021 – 2030 as well as review and complete relevant plans; elaborate and organize the implementation of the action program to implement the Resolution. 

3. Provincial Party Committees, Municipal Party Committees, Party committees and Party organizations directly under the Central Government shall study and thoroughly grasp the Resolution and formulate plans to implement the Resolution in line with the situation of each sector, locality, agency and unit; supplement the criteria stated in the Resolution into the annual plans of the sectors, localities, agencies and units; periodically check and evaluate the implementation. 

4. The Central Commission for Propaganda and Training shall assume the prime responsibility and coordinate with the Party Committee of the Cabinet to organize guidelines and extensive propaganda on the content of the Resolution and implementation results. 

5. The Party Central Committee’s Commission for Economic Affairs shall assume the prime responsibility and coordinate with relevant agencies to regularly monitor, supervise, inspect and urge the implementation of the Resolution; periodically review, summarize and report to the Politburo and the Secretariat on the results./.