Directive No. 15/2007/CT-TTg on several key solutions to promote foreign direct investment in Vietnam

 

DIRECTIVE

On several key solutions to promote

foreign investment in Vietnam

In recent years, with the implementation of many synchronized measures of Resolution No. 09/2001/NQ-CP of the Government on "Strengthening attraction and improving the efficiency of using foreign direct investment for the period 2001-2005" and Directives No. 19/2001/CT-TTg dated August 28, 2001 and No. 13/2005/CT-TTg dated April 8, 2005 of the Prime Minister on several solutions to create new changes in attracting foreign investment in Vietnam, many difficulties and obstacles have been resolved; the investment environment of our country has continuously improved and become increasingly attractive. As a result, foreign investment activities have overcome the decline phase due to the impact of the regional financial crisis in 1997, gradually recovered and increased rapidly from 2004. Along with the flow of foreign direct investment, indirect foreign investment also showed a significant increase, especially after the Investment Law, Enterprise Law, and guiding decrees came into effect. However, the results of attracting foreign capital still do not match the potential and the large-scale capital mobilization requirements to ensure rapid and sustainable economic growth. The progress and quality of some investment projects are still limited, the actual investment capital is lower than the registered capital, and the transfer of advanced technology has not been promoted sufficiently.

The policy of strengthening attraction and improving the efficiency of using foreign direct investment (FDI) is reflected in the documents of the Party and State and reaffirmed at the 10th National Congress of the Communist Party of Vietnam: "Strengthening the attraction of foreign investment, striving to reach more than one-third of the total development capital of the whole society over five years (2006-2010). Expanding the fields, areas, and forms of attracting FDI, focusing on rich-potential markets and leading global economic groups, creating a strong change in quantity and quality, and the effectiveness of foreign direct investment."

Entering the five-year socio-economic development plan 2006-2010, despite having to cope with numerous challenges, our country is now facing new opportunities and favorable conditions for strengthening the attraction of foreign investment:

First, the Vietnamese economy continues its high, stable, and sustainable growth trend. In 2006 alone, GDP growth was over 8.17%, export turnover reached nearly 40 billion US dollars; the investment environment has continuously improved, causing the flow of foreign direct investment to increase again since 2004 and currently a new wave of investment is emerging in our country, continuing to drive high growth in the coming years.

Second, with events such as Vietnam officially becoming a member of the World Trade Organization (WTO), successfully hosting the 14th APEC meeting, the U.S. Congress passing the Permanent Normal Trade Relations (PNTR) for Vietnam, and the success of bilateral and multilateral visits by senior leaders of our country in recent times, have created a greater influence of Vietnam on the international stage.

Third, the market economy system in our country is increasingly focused on construction and improvement, including the legal system and policies related to the investment and business environment, which have made significant strides, creating a fair legal environment that is increasingly transparent, clear, and conducive to domestic and foreign investors operating effectively in Vietnam.

Fourth, Vietnam has a politically stable situation, social order and safety are maintained; it is a developing market with great potential, with a population exceeding 80 million and expected to reach 100 million in the near future, while also being a convenient gateway for trade with many ASEAN member countries' markets. Additionally, the world economic environment continues to move positively. Major economic centers around the world, either having passed through recession phases and entered a stable period or continuing to grow strongly, all have a strong need to increase their overseas investment activities.

These factors are important prerequisites for creating new opportunities and favorable conditions to promote a new wave of investment in our country. Nevertheless, to fully capitalize on these opportunities, efforts must be concentrated on overcoming the remaining limitations in investment activities, such as the enforcement of laws and policies, the quality of infrastructure, the quality of human resources, investment promotion, administrative procedures, and corruption and negative phenomena.

I. KEY SOLUTIONS

To seize new opportunities and strengthen the attraction of foreign investment in accordance with the spirit of the 10th National Congress of the Communist Party, the Prime Minister requests ministries, sectors, and provincial People's Committees to urgently implement the following key solutions and specific tasks:

1. Regarding planning work

a) Accelerate the progress of building and approving missing plans; review to periodically supplement and adjust plans that are no longer suitable to create favorable conditions for investors to determine and develop projects.

b) Consistently implement the new provisions of the Investment Law in planning work, ensuring the construction of sectoral, field-specific, and product-related plans does not conflict with international commitments.

c) Complete and widely publicize land use plans to accelerate the progress of land clearance for investment projects.

2. Regarding the formulation and enforcement of legal and policy frameworks

a) Continue to issue regulatory legal documents guiding relevant laws on investment and business; review laws and policies, amend or abolish incentives and subsidies that are inconsistent with WTO regulations, international commitments, and take measures to protect the rights of investors. Strengthen training and dissemination of the content and implementation timeline of Vietnam's international commitments. Issue incentives to encourage investment in welfare facilities serving workers in industrial zones, export processing zones, high-tech zones, and economic zones, ensuring compatibility with current laws.

b) Monitor and supervise the implementation of laws on investment to promptly detect and address emerging issues. Rectify situations where incentives and support for investment are issued and applied contrary to legal provisions.

3. On promoting investment

a) Complete and announce the National Project List for attracting foreign direct investment for the period 2006-2010 with a view towards 2020 (with phases from 2006-2010). Develop programs to promote investment in key areas and multinational corporations; focus on supporting industries of certain sectors (manufacturing, assembly, textiles, footwear) and socio-economic infrastructure. Continue to review and update the list of projects to attract investment in line with sectoral and local development plans.

b) Issue regulations on the establishment and implementation of the National Investment Promotion Program for the period 2007-2010 to ensure funding for investment promotion activities linked to trade promotion and tourism. Promptly adjust the goals, mechanisms, and organizational structure of the Export Support Fund (established under Decision No. 195/1999/QĐ-TTg dated September 27, 1999 of the Prime Minister) in accordance with WTO principles and current laws. Strengthen publicity and promotion of Vietnam's image, combining high-level delegations' visits with investment promotion activities; organize domestic and international seminars effectively; improve the quality of investment promotion materials and online information about foreign investment. Organize "Vietnam Days" abroad.

c) Enhance direct investment solicitation teams working with major corporations in key overseas locations to attract investment in large and important projects. Proactively approach and effectively support potential investors interested in investing in Vietnam.

d) Promptly establish investment promotion offices in key overseas locations. Develop regulations to closely coordinate between investment promotion agencies at all levels both domestically and abroad to ensure synchronization and enhance the effectiveness of these activities.

4. Addressing weaknesses in infrastructure

a) Review, adjust, approve, and announce infrastructure planning up to 2020 as a basis for attracting investment in infrastructure development. Strengthen planning work, implement plans, and attract investment in transportation and energy projects.

b) Maximize investment resources for infrastructure development, particularly non-government funds; prioritize water supply, sanitation (solid waste, wastewater treatment); expressways, especially the North-South route, two economic corridors between Vietnam and China; improve railway service quality, especially high-speed railways between North and South, railways along the two economic corridors between Vietnam and China, railways connecting major mineral deposits to the national railway system, and urban rail systems in Hanoi and Ho Chi Minh City.

c) Accelerate research and policy formulation to encourage production and use of electricity from new energy sources (wind, tidal, solar); in the short term, ensure power supply for production.

d) Promptly develop and issue mechanisms to encourage non-state economic sectors to participate in developing infrastructure projects, including transportation facilities, seaports, and independent power plants.

đ) Expand seaport leasing models and permit a wider range of entities to invest in port services, particularly logistics services, to enhance the competitiveness of Vietnam’s seaport system; call for investment in major ports such as Haiphong-Thi Vai, Lach Huyen, Van Phong, etc.

e) Consider issuing measures to open up certain service sectors earlier than committed levels where there is a need.

g) Increase investment attraction in infrastructure for national tourist areas with high competitiveness regionally and internationally.

5. On labor and wages

a) Rapidly expand vocational training scale while improving the quality and efficiency of primary, intermediate, and advanced vocational training to meet technical labor demands of enterprises; focus on developing 40 high-quality vocational schools, some of which will reach international standards.

b) To prevent illegal strikes and foster healthy labor relations in accordance with the Labor Code, strengthen the following measures:

- Continuously improve labor laws and policies in new circumstances; intensify inspections and supervision of labor law compliance by employers to ensure safe working conditions and living standards for workers;

- Promote education and raise awareness of labor laws among workers and employers in foreign-invested enterprises to ensure full and strict implementation of labor and wage policies.

c) Establish a general wage floor for workers in enterprises across various economic sectors taking into account factors such as inflation, investment location, and the minimum standard of living for Vietnamese people.

6. On administrative reform

a) Effectively implement decentralization in managing foreign investment, particularly in approving and issuing Investment Certificates, managing foreign investment projects, and enhancing cooperation and coordination in inspecting and supervising the implementation of investment laws. Timely resolve issues arising during the issuance and adjustment of Investment Certificates.

b) Improve the competence of civil servants to ensure the fulfillment of tasks stipulated in the Investment Law and new regulations on decentralizing foreign investment management.

c) Simplify and publicize administrative procedures for foreign investment, implementing a single-window mechanism for investment procedures. Ensure consistency in procedures and processes at the local level while adapting to specific conditions.

d) Strengthen the mechanism for coordination in managing foreign investment between central authorities and localities and among relevant ministries and sectors.

đ) Establish hotlines at state management agencies for investment at all levels to promptly grasp and address difficulties faced by investors and to eliminate corruption and harassment of investors.

7. Other solutions

a) Continue to enhance the effectiveness of anti-corruption efforts against investors. Emphasize personal responsibility in handling tasks, practice thrift, and combat waste in state management agencies. At the same time, intensify education, propaganda, inspection, supervision, and strict punishment of corrupt and harassing behaviors towards investors in state management agencies at all levels.

b) Promote socialization in the fields of education, healthcare, culture, and sports.

c) Continue to effectively implement the Vietnam-Japan Joint Initiative Action Program Phase II to contribute to improving the investment and business environment and competitiveness of Vietnam.

II. IMPLEMENTATION

To implement the above groups of solutions, the Prime Minister requests that the Ministries, sectors, and provincial People's Committees carry out the following specific tasks:

1. The Ministry of Planning and Investment

a) Take the lead and coordinate with relevant ministries and sectors to complete and submit to the Government for promulgation the decrees guiding the implementation of the Enterprise Law and Investment Law which are still lacking; review difficulties encountered during the implementation of the Investment Law and Enterprise Law. Issue detailed guidance documents on some provisions of the decrees guiding the implementation of the Investment Law and Enterprise Law in the third quarter of 2007.

b) Take the lead and coordinate with the Ministries of Science and Technology, Finance, and related ministries and sectors to work with competent agencies of the Japanese Government and Japanese conglomerates to promote investment in developing high-tech infrastructure in Hoa Lac Hi-Tech Park.

c) Take the lead and coordinate with the Ministries of Transport, Finance, and related sectors to work with competent agencies of the Japanese Government regarding the North-South Expressway project and the North-South High-Speed Railway project, and report to the Prime Minister in the third quarter of 2007.

d) Take the lead and coordinate with relevant ministries and sectors to urgently establish foreign investment promotion units in key areas as announced in the Prime Minister's conclusion in Document No. 103/TB-VPCP dated May 9, 2007, issued by the Government Office on the proposal to strengthen foreign investment promotion units in key areas.

đ) Take the lead and coordinate with relevant ministries and sectors and provincial People's Committees to organize investment campaigns targeting key areas, major partners, large conglomerates, and important projects. Implement the National Investment Promotion Program to enhance effective investment promotion activities.

e) Serve as the focal point to coordinate with relevant ministries and sectors to implement the Vietnam-Japan Joint Initiative Action Program Phase II to improve the investment and business environment and competitiveness of Vietnam, and report to the Prime Minister in the fourth quarter of 2007.

g) Take the lead and coordinate with relevant ministries and sectors and provincial People's Committees to establish a nationwide investment information network to promptly provide and collect information on investment.

h) Take the lead and coordinate with relevant ministries and sectors and provincial People's Committees to establish hotlines for investment to promptly grasp and address difficulties faced by investors and to eliminate corruption and harassment of investors.

i) Take the lead and coordinate with the Ministries of Finance, Science and Technology, and related sectors to study and submit to the Prime Minister in the third quarter of 2007 preferential policies for high-tech projects outside high-tech zones.

k) Take the lead and coordinate with relevant ministries and sectors to establish a support group for large-scale investment projects from the outset to accelerate the formation and effective implementation of investments in Vietnam.

2. Ministry of Finance

a) Urgently adjust the objectives, mechanisms, and operational activities of the Export Support Fund established under Decision No. 195/QĐ-TTg dated September 27, 1999, of the Prime Minister to be consistent with WTO principles and current laws, and rename this fund to the Trade Promotion-Investment-Tourism Fund, and submit to the Government in the second quarter of 2007.

b) Take the lead in formulating incentive policies and management mechanisms for indirect investment and investment from foreign funds into Vietnam, and submit to the Prime Minister in the third quarter of 2007.

c) Take the lead and coordinate with the Ministry of Natural Resources and Environment to propose appropriate environmental subsidies in accordance with the Agreement on Subsidies and Countervailing Measures (SCM) of the WTO.

d) Take the lead and coordinate with relevant ministries and sectors to review and amend unreasonable regulations related to transaction costs in goods circulation activities and customs procedures, and submit to the Government in the third quarter of 2007.

3. The Industry Ministry

a) Develop plans for power supply and measures to handle different levels of power shortages; develop priority power supply plans for production, especially in areas concentrated with manufacturing enterprises and key industrial and service development areas, and report to the Prime Minister in the third quarter of 2007.

b) Urgently implement the marketization roadmap for the electricity sector, build pricing mechanisms and frameworks for energy (coal, gas, electricity), and submit to the Government for approval and public announcement in the fourth quarter of 2007.

c) Take the lead and coordinate with the Ministry of Planning and Investment to identify a list of power generation and energy projects requiring foreign direct investment in various forms; prepare project investment summaries and organize investment campaigns.

d) Take the lead and coordinate with relevant ministries and sectors to study and develop solutions for producing and using electricity from new types of energy such as wind, tidal, and solar thermal energy, and submit to the Government in the fourth quarter of 2007.

đ) Take the lead and coordinate with the Ministry of Natural Resources and Environment to report to the Prime Minister on the current status of industrial waste in the fourth quarter of 2007.

e) To take the lead and coordinate with the Ministry of Natural Resources and Environment to study measures for sustainable environmental development in accordance with the Environmental Protection Law 2005, to be submitted to the Prime Minister in the fourth quarter of 2007.

4. Ministry of Labor, Invalids, and Social Affairs

a) Urgently complete and submit to the Government in the fourth quarter of 2007 for promulgation the Decree guiding the implementation of the Law Amending and Supplementing Certain Provisions of the Labor Code and the Decree guiding the implementation of the Vocational Training Law.

b) Develop and submit to the Prime Minister a roadmap towards a unified minimum wage policy applicable to all enterprises under various economic sectors, including foreign workers in foreign contractors, taking into account factors such as inflation, investment location, and the minimum living standards of Vietnamese people.

c) Rapidly expand in scale while improving the quality and effectiveness of vocational training at three levels (beginner vocational level, intermediate vocational level, college vocational level) to meet the technical labor needs of enterprises; focus on developing forty high-quality vocational training schools, some of which will reach international standards.

d) Take the lead and coordinate with the Ministry of Education and Training and related ministries and agencies to research and reform vocational training programs to meet market labor demands, including foreign workers in enterprises with foreign capital, to better meet human resource needs.

5. The Ministry of Natural Resources and Environment

a) Build a proposal to enhance the capacity of businesses in the field of environmental protection, to be submitted to the Prime Minister in the third quarter of 2007.

b) Take the lead and coordinate with relevant ministries and agencies to review and amend preferential investment regulations in the land sector, to be submitted to the Prime Minister in the second quarter of 2007.

c) Build a proposal for the development of environmental services in compliance with WTO regulations as a basis for attracting foreign investment in the environmental treatment and service provision sectors, to be submitted to the Prime Minister in the second quarter of 2007.

d) Take the lead and coordinate with the Ministries of Finance and Industry to research and develop preferential policies for environmental protection activities in enterprises.

đ) Build partnerships in environmental protection work between environmental management agencies, foreign business associations, enterprises, and communities.

6. The Ministry of Posts and Telecommunications

Take the lead and coordinate with relevant ministries and agencies to submit to the Prime Minister in the third quarter of 2007 a plan to open up foreign investment in the postal and telecommunications sectors in line with WTO and international commitments.

7. The Ministry of Education and Training

a) Build a network planning for universities and colleges as a basis for attracting foreign investment in education and training, emphasizing socialization of educational and training activities and enhancing enterprise self-training capabilities, to be submitted to the Prime Minister in the third quarter of 2007.

b) Take the lead and coordinate with relevant ministries and agencies to build a proposal for human resource training to meet development needs, to be submitted to the Prime Minister in the fourth quarter of 2007.

c) Review and propose adjustments to Decree No. 06/2000/ND-CP dated March 6, 2000 on encouraging foreign investment in education and training and Decree No. 18/2001/ND-CP dated May 4, 2001 of the Government on the establishment and operation of foreign cultural and educational institutions in Vietnam in line with investment laws and international integration.

8. The Ministry of Health

a) Continue to submit to the Prime Minister for approval the Master Plan for the Development of Healthcare and Rehabilitation Networks and the Preventive Healthcare Network in the second quarter of 2007.

b) Continue to perfect the Proposal for Developing the Pharmaceutical Industry, to be submitted to the Prime Minister in the third quarter of 2007.

c) Draft the Drug Law and the Proposal for Developing Medical Equipment Industry, to be submitted to the Prime Minister in the fourth quarter of 2007.

9. The Ministry of Culture and Information

Take the lead and coordinate with relevant ministries and agencies to build and submit to the Government for promulgation a list of areas not to be licensed and conditional investment areas in the culture and information sectors in line with international commitment timelines in the third quarter of 2007.

10. The Ministry of Trade

Organize extensive publicity and dissemination to localities, investors, and domestic and foreign enterprises about the opening of markets related to conditional investment sectors in line with Vietnam's international commitments.

11. The Ministry of Justice

The Ministry of Justice shall be responsible for reviewing and examining the issuance and guidance on implementing regulatory legal documents related to investment to ensure effective investment activities according to its functions and tasks and in accordance with current laws.

12. The State Bank of Vietnam

Issue guidelines for the organization of foreign credit institutions purchasing shares of Vietnamese commercial banks.

13. The Ministry of Foreign Affairs

a) Closely coordinate with the Ministry of Planning and Investment to establish and manage the operations of investment promotion units in key areas.

b) Coordinate with relevant ministries and agencies to build a national promotional program in the form of "Vietnam Days Abroad" for the period 2007-2010.

14. The Ministry of Home Affairs

a) Take the lead and coordinate with the Ministry of Planning and Investment and provincial People's Committees to build a proposal to improve the organizational structure of investment management and business registration agencies in accordance with the Investment Law and the Enterprise Law, to be submitted to the Prime Minister in 2007.

b) Take the lead and coordinate with relevant ministries and agencies to build proposals for the Government to issue guiding documents on the implementation of the Anti-Corruption Law related to the responsibilities of heads and civil servants in 2007.

15. The Ministry of Transport

Take the lead and coordinate with relevant ministries, sectors, and localities to review specialized plans including roadways, expressways, and the Vietnamese seaport system, to be submitted to the Prime Minister in 2007.

16. The Ministry of Construction

Take the lead and coordinate with the Ministry of Natural Resources and Environment to report to the Prime Minister in the third quarter of 2007 on the Planning of Industrial Solid Waste Treatment Zones and Hazardous Waste Treatment Zones, especially in key economic regions.

17. The Ministry of Science and Technology

Urgently complete the draft Decree guiding the implementation of the Law on Technology Transfer and the draft Decree detailing and guiding the implementation of foreign investment cooperation in scientific and technological activities, to submit to the Government for issuance in the third quarter of 2007.

18. General Department of Tourism

Take the lead and coordinate with relevant ministries, sectors, and localities to develop plans to attract investment in the tourism sector to form national tourist areas of significant scale and high quality, capable of competing regionally and internationally, to submit to the Prime Minister in the fourth quarter of 2007.

19. Responsibilities of Ministries, Sectors, and Provincial People's Committees

a) Ministries, sectors, and provincial people's committees have the responsibility to fully perform state management functions over foreign investment in accordance with laws on investment and specialized ordinances. At the same time, they have the responsibility to closely coordinate with related agencies to implement measures as stipulated in this Directive of the Prime Minister.

b) Ministries, ministerial-level agencies, and provincial people's committees urgently review investment and business conditions; abolish or propose the abolition of conditions that are no longer appropriate. At the same time, they must not arbitrarily establish additional investment and business conditions or conditions for industries requiring special permission.

Implement decentralization and enhance coordination between ministries, sectors, and provincial people's committees in state management of foreign investment activities.

c) Focus on directing the implementation of Resolution No. 05/2005/NQ-CP of the Government on accelerating socialization in education, healthcare, culture, and sports activities. In particular, urgently perfect financial mechanisms, investment policies, land policies, and infrastructure to attract all resources for investment in the fields of education, healthcare, culture, and sports.

Continue administrative reform, reduce administrative procedures. Enhance the effectiveness of anti-corruption efforts against investors; practice thrift, combat waste, and strictly monitor and punish corrupt behaviors of officials and civil servants at all levels of management.

Strengthen information work, data management on investment, and strictly comply with reporting regulations on foreign investment as prescribed by investment laws.

d) Provincial People's Committees are responsible for issuing mechanisms for coordination among departments, bureaus, and sectors in the fields of investment and business, and publicly disclose investment and business procedures.

Continue to review and plan the effective implementation of agreements in the Action Plan for the Vietnam-Japan Joint Initiative Phase II to improve the investment and business environment and competitiveness of Vietnam.

The Ministry of Planning and Investment is responsible for monitoring, urging, inspecting, compiling, and reporting to the Prime Minister on the implementation of this Directive.

Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, and chairpersons of provincial people's committees shall organize the effective implementation of this Directive and report to the Ministry of Planning and Investment on the results of implementation no later than the first quarter of 2008 for compilation and reporting to the Prime Minister.

In cases where issues arise beyond their authority, they must report to the Prime Minister for consideration and guidance on implementation./.