Resolution No. 09/2001/NQ-CP on enhancing attraction and improving the effectiveness of foreign direct investment for the period 2001-2005

RESOLUTION OF THE GOVERNMENT

On enhancing attraction and improving the effectiveness of foreign direct investment during the period from 2001 to 2005

The Ninth National Congress of the Party has affirmed that the economy with foreign investment capital is an important component of the socialist-oriented market economy in our country, encouraged for long-term development on an equal footing with other economic sectors. Attracting foreign direct investment is an important policy, contributing to tapping domestic resources, expanding international economic cooperation, creating comprehensive strength to serve the cause of industrialization and modernization, and national development.

Over more than ten years since the issuance of the Law on Foreign Direct Investment in Vietnam in 1987, foreign direct investment activities in our country have achieved many significant accomplishments, making positive contributions to realizing economic and social goals, to the success of the renewal process, pulling the country out of economic crisis, and strengthening Vietnam's position on the international stage. Foreign direct investment has become one of the important sources of capital for development; it has promoted structural transformation towards industrialization and modernization; opened up new industries and products; improved management capacity and technological level; expanded export markets; created additional jobs; contributed to expanding external relations and actively integrating into the world economy.

However, foreign direct investment activities in recent years have also revealed weaknesses and limitations. Understanding and viewpoints on foreign direct investment have not been truly consistent and fully implemented at all levels and sectors; the structure of foreign direct investment still has unreasonable aspects and the overall socio-economic effectiveness of foreign direct investment activities has not been high; the investment environment has not been sufficiently attractive; the economic and legal environment is still under construction and therefore not yet synchronized; state management of foreign direct investment has some weaknesses; administrative procedures are still cumbersome; cadre work has many shortcomings. The growth rate of foreign direct investment has continuously declined since 1997, although there were signs of recovery from 2000 but not yet stable, if timely measures are not taken to address these issues, it will affect the development capital in the coming years. Meanwhile, competition to attract foreign direct investment worldwide and in the region is becoming increasingly fierce, especially after the regional economic crisis; the pace of global economic growth is slowing down; regional economies, major investors in Vietnam, are facing difficulties.

In order to continue improving the investment environment, consolidate the confidence of foreign direct investors, create favorable conditions for the economic sector with foreign direct investment to develop smoothly, contribute more to economic development, and help achieve the economic and social development goals in the near future, the Government issued the Resolution on "Enhancing Attraction and Improving the Effectiveness of Foreign Direct Investment during the Period from 2001 to 2005," with the main contents as follows:

I. Objectives and Orientation for Attracting Foreign Direct Investment

1. Objectives:

To implement the Socio-Economic Development Strategy for 2001-2010 and the Direction and Tasks of the Socio-Economic Development Plan for 2001-2005, the foreign direct investment sector must develop more stably, achieve higher results, particularly in quality, compared to the previous period, to accelerate the country's industrialization and modernization. Specifically, foreign investment activities during the period from 2001 to 2005 must achieve the following objectives:

a) Registered capital of newly licensed projects: approximately 12 billion USD.

b) Capital implementation: approximately 11 billion USD.

c) By 2005, contribute about 15% of GDP, 25% of total export turnover, and about 10% of the national budget revenue (excluding oil and gas).

2. Orientation:

a) Strongly encourage attracting foreign direct investment in export-oriented manufacturing industries, processing industries; industries serving agricultural development and rural economy; projects applying information technology, biotechnology, oil and gas, electronics, new materials, telecommunications, production of infrastructure for socio-economic development, and industries where Vietnam has competitive advantages linked to advanced technology, creating more jobs, and contributing to economic restructuring.

b) Continue to attract foreign direct investment in areas with many advantages to leverage the role of driving regions, creating conditions for linking the development of other regions based on comparative advantages. Encourage and provide maximum incentives for foreign direct investment in regions and areas with difficult economic and social conditions, and promote investment in building infrastructure projects in these areas through other sources of capital to facilitate foreign direct investment activities. Focus on attracting foreign direct investment in concentrated industrial zones formed according to approved planning.

c) Encourage foreign direct investors from all countries and territories to invest in Vietnam, especially those with large financial potential and holding source technologies from developed countries; continue to attract foreign direct investors from the region. Develop plans to mobilize large corporations and companies to invest in Vietnam, while paying attention to medium and small-sized companies with advanced technology; encourage and facilitate overseas Vietnamese to invest back in the country.

II. Implementation Measures

1. Building a Catalogue of Projects to Attract Foreign Direct Investment

a) Establish the National List of Projects to Attract Foreign Direct Investment for the period 2001-2005 and announce it in 2001, serving as a basis for investment promotion activities. Projects selected for inclusion in this list must have prior consensus on policy orientation and planning, and be allocated funds for preliminary feasibility studies. Ministries, sectors, and localities shall proactively establish and announce their own lists of projects to attract foreign direct investment after reaching agreement with the Ministry of Planning and Investment.

b) Ministries and sectors shall develop and adjust sectoral plans and major products in accordance with the Socio-Economic Development Strategy 2001-2010 and the Socio-Economic Development Plan 2001-2005; clearly identify the need for each type of capital, including foreign direct investment, to achieve the goals and products set out in the plan.

2. Continue to improve the legal system and policies related to foreign direct investment.

a) Continue to study, develop, adjust, and perfect the legal system related to foreign direct investment, creating favorable conditions for the development of foreign direct investment activities in line with the direction of the Socio-Economic Development Strategy and in accordance with the requirements of actively integrating into the international economy.

b) Study, develop, and perfect legal documents on foreign direct investment in the direction of:

Establishing a common legal framework applicable to both domestic investment and foreign direct investment to create a stable and equal environment for production and business; at the same time, apply certain provisions on investment conditions and incentives suitable for different objects and fields during different periods.

Diversify forms of foreign direct investment to exploit additional channels for attracting investment; study and implement pilot programs for investment forms such as limited liability companies, fund management companies; amend and supplement Decree No. 103/1999/NĐ-CP dated September 10, 1999 of the Government on transferring, selling, contracting, leasing state-owned enterprises, allowing foreign direct investors to purchase, take over operations, manage, lease domestic enterprises; study the model of an open economic zone.

Expand areas to attract foreign direct investment in line with commitments made during the process of actively integrating into the international economy. Gradually open up the real estate market for overseas Vietnamese residents and foreign direct investors to invest in Vietnam; establish mechanisms for foreign-invested enterprises to construct, operate housing and develop new urban areas; encourage investment in scientific and technological service, information service, technology transfer, human resource development sectors; gradually expand the ability to cooperate in trade, services, tourism sectors.

In 2001, it is necessary to implement several urgent tasks:

Develop a proposal to expand the scope of attracting foreign direct investment based on summarizing and evaluating the sectors that have been allowed to pilot foreign direct investment, sectors where there has been a policy not to grant or limit granting investment permits in recent times; adjust the product catalog to ensure an export ratio of at least 80%.

Based on the above proposal and current regulations, investors can independently choose investment projects in accordance with Article 3 of Decree No. 24/2000/NĐ-CP dated July 31, 2000 of the Government detailing the implementation of the Law on Foreign Investment in Vietnam. State management agencies may not arbitrarily impose any other restrictions on foreign direct investment.

Develop regulations to pilot the conversion of foreign-invested enterprises to joint-stock companies and facilitate these enterprises' registration on the stock market. Study amendments to specific provisions regarding the negotiation period for BOT projects and rules, authority to designate foreign direct investors to undertake BOT projects in certain cases.

Issue regulations allowing foreign direct investors to invest in import services and domestic distribution services in accordance with the spirit of Decree No. 24/2000/NĐ-CP dated July 31, 2000 of the Government. Narrow the list of goods not included in the scope of foreign-invested enterprises purchasing for export.

Study supplements and amendments to Decree No. 60/CP of the Government dated July 5, 1994 on the right to ownership of housing and the right to use residential land in urban areas and Decree No. 61/CP dated July 5, 1994 of the Government on buying and selling and operating housing in accordance with the Civil Code and the Law Amending and Supplementing Certain Provisions of the Land Law; issue a Government Decree specifying the conditions under which overseas Vietnamese residents with investment projects and permanent residence in Vietnam can purchase housing.

Immediately issue guiding documents to implement policies and regulations on cooperation in investment with foreign countries in the education and training, scientific research sectors according to Decree No. 06/2000/NĐ-CP dated March 6, 2000 of the Government to enhance the attraction of high-quality investment projects and manage the activities of investment projects in this field.

c) Continue to implement the roadmap to reduce investment costs and move towards a unified pricing system applicable to both domestic investment and foreign direct investment according to Decision No. 53/1999/QĐ-TTg dated March 26, 1999 of the Prime Minister.

In 2001, uniformly apply vehicle inspection fees, port fees, advertising fees on mass media, and fees for visiting cultural, historical, revolutionary sites.

Complete by June 2002 the repayment to foreign-invested enterprises of the actual legitimate capital they have invested in constructing power facilities outside the fence.

d) Reform and perfect monetary policy related to foreign direct investment activities towards gradually reducing, and eventually eliminating the mandatory tying of foreign currency when conditions permit. Flexibly and effectively utilize monetary policy tools such as exchange rates and interest rates according to market principles under macroeconomic management by the State.

đ) Continue tax system reform in line with the country's economic and social development situation and international commitments towards simplifying tax categories, gradually applying a unified tax system for both domestic and foreign direct investments. Develop tax policies to encourage foreign direct investment in producing spare parts and components, increasing the localization rate of products; allow projects producing auxiliary materials for export to enjoy similar incentives as production investment projects for export. Provide reasonable and effective protection for certain important products.

In 2001, implement policies to encourage the activities of foreign investment funds operating in Vietnam; promptly apply regulations on tax declaration and payment, year-end financial settlement based on independent audit results; tax authorities will only recheck in necessary cases.

e) Promptly address difficulties and obstacles regarding land, site clearance to accelerate project implementation progress. Pilot allowing domestic private individuals who have been granted long-term land use rights to lease their land to foreign direct investors within the term of their land use rights.

Study ways to resolve the demand of foreign enterprises investing large projects in Vietnam needing to mortgage the value of allocated or long-term leased land to borrow from overseas credit institutions when domestic credit institutions cannot meet capital needs.

In 2001, it is necessary to implement the following urgent issues:

Accelerate compensation and site clearance progress to facilitate the implementation of foreign direct investment projects. Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).Local people's committees must resolutely organize forced execution of site clearance for cases that have been treated according to state policies and regulations but still fail to comply.

Issue guidance documents on issuing land use right certificates to enterprises operating in industrial zones and export processing zones.

Issue guidance documents on handling responsibilities and obligations of parties involved in joint ventures where land is contributed as capital, in cases where enterprises change investment forms, go bankrupt, or dissolve prematurely.

3. Enhance the effectiveness of state management

Investment license issuing agencies must regularly review and classify foreign direct investment projects that have been issued licenses to take appropriate and timely measures to resolve difficulties for foreign direct investment enterprises.

For enterprises already engaged in production and business operations, ministries, sectors, and Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).provincial people's committees, within their jurisdiction, need to promptly motivate and reward enterprises that operate well to encourage further development, while taking appropriate measures to resolve difficulties for enterprises, especially issues related to product markets and tax obligations.

For ongoing projects, ministries, sectors, and provincial people's committees should actively support enterprises in resolving difficulties, particularly in compensation and site clearance to quickly complete basic construction and put enterprises into production and business operations.

For unimplemented projects that still have potential for implementation, efforts should be made to promote their implementation within a specified period and resolve any obstacles, including adjusting project objectives and scale.

For unimplemented projects with no prospects for implementation, investment licenses should be firmly revoked and sites reallocated to other investors.

In the third quarter of 2001, the Prime Minister will review the initial results of the review and handling of foreign direct investment projects that have been licensed.

b) Strictly control the establishment of new industrial zones (IZs) and evaluate the implementation status of existing IZs; the Ministry of Planning and Investment will submit to the Prime Minister in October 2001 proposals to halt or delay construction of IZs lacking feasibility factors.

In 2001, supplement and amend the Regulations on Industrial Zones, Export Processing Zones, and High-Tech Zones issued together with Decree No. 36/CP dated April 24, 1997 of the Government towards narrowing the gap and moving towards uniform mechanisms and policies for domestic and foreign direct investments in industrial zones; adding models of small industrial zones serving rural industry development and urban renewal; adjusting investment development infrastructure mechanisms inside and outside the fence; separating bare land leasing and infrastructure business.

c) Continue implementing the policy of decentralizing state management over foreign direct investment to provincial people's committees based on ensuring centralized and unified management principles for planning, structure, policy, and mechanism; focusing on decentralizing state management over post-license activities of foreign direct investment projects; strengthening central ministries' and sectors' guidance and inspection. Establish strict mechanisms to handle violations of laws, policies, and planning in implementing the decentralized state management policy over foreign direct investment, including revoking improperly issued investment licenses.

Improve administrative procedures

Vigorously reform administrative procedures related to foreign direct investment activities. Study building management mechanisms and organizational structures towards a single window/single point system at central and local levels to facilitate foreign direct investment activities.

To achieve fundamental changes in administrative procedures, the following measures need to be implemented in 2001:

Strengthen close cooperation between central and local state management agencies in managing foreign direct investment activities; clearly define the powers and responsibilities of each agency in resolving emerging issues; implement regular coordination meetings between central ministries and sectors with localities having many foreign direct investment projects; maintain regular direct contact between state management agencies and foreign direct investors.

Significantly improve administrative procedures related to foreign direct investment activities towards further simplifying investment licensing, expanding the scope of projects subject to investment licensing registration. Establish a multi-sector working group led by the Ministry of Planning and Investment to systematically review all types of licenses and regulations related to foreign direct investment activities, and on this basis, propose the abolition of unnecessary licenses and regulations for foreign direct investment activities.

Ministries, sectors, and localities must clearly and publicly stipulate administrative procedures, simplify and reduce unnecessary procedures; resolutely and strictly handle cases of harassment, favoritism, corruption, and irresponsibility of civil servants.

5. Vigorously promote and facilitate investment

a) Reform the content and methods of promoting and facilitating investment. Implement investment promotion programs by industry, sector, and region with specific projects and partners, targeting foreign partners with financial strength and source technology. Based on the list of national investment projects calling for foreign direct investment, carefully prepare some important investment projects, select and invite a few large groups in that industry or sector directly to negotiate and participate in these projects.

b) Pay attention to both attracting new foreign direct investment projects and supporting existing foreign direct investment projects to operate effectively. Timely resolve difficulties and obstacles to ensure smooth operation of foreign-invested enterprises. Promptly commend and reward foreign-invested enterprises and investors with outstanding achievements in business and substantial contributions to national construction. At the same time, criticize and strictly deal with violations of Vietnamese laws.

Diversify investment promotion activities through diplomatic activities of Party and State leaders, international forums, investment promotion cooperation within the framework of AIA, ASEAN, APEC, ASEM, domestic and international investment seminars; utilize various promotional tools through mass media, the Internet, direct contacts...

Vigorously publicize and introduce foreign direct investment activities to create a new image of Vietnam; establish a unified perception about foreign direct investment in public opinion.

Vietnamese diplomatic-commercial representative offices have the responsibility to effectively promote investment in Vietnam, allocate staff for investment promotion in key areas. Increase staff for investment promotion at ministries, sectors, and localities.

Allocate financial resources for investment promotion activities from the annual regular budget of ministries, sectors, and localities.

Strengthen research on economic conditions, investment markets, and overseas investment policies of countries, large corporations, and companies to develop appropriate investment attraction policies; study laws, policies, and measures for attracting foreign direct investment of countries in the region to promptly adopt suitable strategies.

Build and perfect a system of information on foreign direct investment as a basis for policy planning and managing foreign direct investment activities, expand external publicity based on modern information. Develop and put into operation a website on foreign direct investment to serve the provision of updated information on policies, laws, investment projects, successful project highlights, etc.

6. Cadre work and training

Emphasize strengthening cadre work and training cadres, technical workers operating in the economy with foreign direct investment capital. In 2001, complete the following projects:

Develop the Code of Conduct for Vietnamese cadres participating in the Board of Directors and management of joint ventures, clearly defining selection criteria regarding politics, expertise, and professional skills; responsibilities, obligations, and rights of cadres working in foreign direct investment enterprises.

Develop a training program for cadres involved in foreign direct investment work and managers of enterprises with foreign direct investment capital; regularly organize professional and vocational training sessions and legal education for Vietnamese cadres currently working in foreign direct investment enterprises.

Develop a training program for skilled workers serving foreign direct investment enterprises, initially focusing on major industrial zones.

III. Implementation Organization

1. The Ministry of Planning and Investment shall take the lead, coordinate with the Government Office to be responsible for monitoring, urging, inspecting, and compiling reports to the Prime Minister on the implementation of this Resolution according to the division of labor by the Prime Minister.

During the implementation process, if there are any difficulties, they must promptly seek guidance from the Prime Minister.

2. Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairmen of provincial and municipal People's Committees directly under the Central Government are responsible for implementing this Resolution./.