Circular No. 56/2001/TT-BKHCNMT guiding the implementation of foreign investment cooperation in scientific and technological activities pursuant to Government Decree No. 06/2000/NĐ-CP dated March 6, 2000.

CIRCULAR

Guidelines for implementing foreign investment cooperation in scientific and technological activities pursuant to Decree No. 06/2000/NĐ-CP dated March 6, 2000 of the Government

On the basis of Decree No. 22/CP dated May 22, 1993 of the Government on tasks, powers, and organizational structure of the Ministryof Science, Technology, and Environment;

On the basis of Decree No. 06/2000/NĐ-CP dated March 6, 2000 of the Government on foreign investment cooperation in the fields of medical treatment, education and training, scientific research (hereinafter referred to as Decree No. 06/2000/NĐ-CP);

On the basis 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 (hereinafter referred to as Decree No. 24/2000/NĐ-CP);

The Ministry of Science, Technology, and Environment guides the implementation of foreign investment cooperation in scientific and technological activities according to Decree No. 06/2000/NĐ-CP as follows: 

I. GENERAL PROVISIONS

1. Scope of Application.

This Circular guides foreign investment cooperation in scientific and technological activities. Scientific and technological activities cooperating with foreign countries for non-profit purposes are not within the scope of this Circular.

2. Participants in investment cooperation.

The following entities may participate in investment cooperation to establish organizations for scientific and technological activities with foreign investment:

a) Research institutes, research centers, and other organizations researching science and technology, natural sciences, economic management sciences, languages, which are state-owned scientific institutions;

b) Research institutes, research centers, and other organizations researching science and technology, natural sciences, economic management sciences, languages belonging to other economic sectors;

c) Vietnamese enterprises including those established under the State Enterprise Law, the Enterprise Law, and the Cooperative Law;

d) Vietnamese individuals (including overseas Vietnamese);

e) Enterprises with foreign investment;

f) Foreign investors.

3. Definitions:

Some terms used in this Circular are understood as follows:

Science is a system of knowledge about phenomena, objects, and laws of nature, society, and thought.

Technology is a collection of methods, procedures, skills, secrets, tools, and means used to transform resources into products.

Scientific and technological activities include scientific research, technological research and development, scientific and technological services, activities promoting innovations, improving techniques, rationalizing production, and other activities aimed at developing science and technology.

Scientific research is the activity of discovering and understanding phenomena, objects, and laws of nature, society, and thought; creating solutions for practical application. Scientific research includes basic research and applied research.

Technological development is the activity of creating and perfecting new technologies and products.

Technological development includes experimental deployment and pilot production.

Experimental deployment is the activity of applying scientific research results to conduct experiments to create new technologies and products.

Pilot production is the activity of applying experimental deployment results to produce on a small scale to perfect new technologies and products before mass production and use.

Scientific and technological services are activities serving scientific research and technological development; activities related to intellectual property rights, technology transfer; information, consulting, training, upgrading, dissemination, and application of scientific and technological knowledge and practical experience services.

Foreign investor is a foreign economic organization or individual investing in Vietnam.

Foreign-invested enterprise includes joint ventures and wholly foreign-owned enterprises operating in Vietnam.

Foreign-invested scientific and technological organization is a research institute, research center, or facility (station, farm, laboratory...) conducting scientific and technological activities using foreign capital.

4. Preferential Treatment.

Foreign-invested scientific and technological organizations with projects listed in the special encouragement investment project catalog shall enjoy preferential treatments stipulated in Decree No. 24/2000/NĐ-CP and other incentives prescribed in the Law on Science and Technology and its implementing regulations. In cases where preferential treatments under foreign investment law and science and technology law are different, foreign-invested scientific and technological organizations have the right to choose the level of incentive to apply.

II. CONTENTS OF FOREIGN INVESTMENT COOPERATION IN SCIENTIFIC AND TECHNOLOGICAL ACTIVITIES

Foreign investment cooperation in scientific and technological activities under this Circular includes the following contents:

1. Scientific research or technological development in one of the following specialized fields:

a) Natural sciences;

b) Engineering sciences, technology (including agricultural and medical fields);

c) Economic management sciences;

d) Languages.

In these fields, activities harmful to national security, defense, social customs, public order and safety, human health, environment, and other prohibitions stipulated by Vietnamese law shall not be conducted.

2. Scientific and technological services.

III. FORMS OF FOREIGN INVESTMENT COOPERATION IN SCIENTIFIC AND TECHNOLOGICAL ACTIVITIES

Foreign investment cooperation in scientific and technological activities shall be carried out in one of the following forms:

1. Joint venture: Vietnamese and foreign parties jointly establish research institutes, research centers, or facilities (stations, farms, laboratories...) to conduct scientific and technological activities in the fields specified in Section II of this Circular.

2. Business cooperation contract: Vietnamese and foreign parties cooperate through a business contract to conduct scientific and technological activities in the fields specified in Section II of this Circular.

3. Trial operation of a wholly foreign-owned enterprise to conduct scientific and technological activities in the fields specified in Section II of this Circular.

IV. CONDITIONS FOR ESTABLISHMENT AND OPERATION OF SCIENTIFIC AND TECHNOLOGICAL ORGANIZATIONS WITH FOREIGN INVESTMENT CAPITAL

Scientific and technological organizations with foreign investment capital may only operate after obtaining an Investment License.

Foreign cooperative investment projects in scientific and technological activities fall under Group A projects. To obtain an Investment License, in addition to the general conditions for Group A projects, scientific and technological organizations with foreign investment capital must also ensure the following conditions:

1. The content of scientific and technological activities must be consistent with the investment objectives and the State of Vietnam's orientation for scientific and technological development.

2. There must be at least five research staff members with university or higher qualifications working on a full-time basis in the permitted field. The head of the organization must have a university or higher qualification in the permitted field.

3. There must be technical infrastructure and equipment suitable for the type and scale of scientific and technological activities, specifically:

a) Having a headquarters where the management body of the scientific and technological organization with foreign investment capital is located;

b) Having equipment to ensure the effective conduct of scientific and technological activities in the permitted field.

V. IMPLEMENTATION

1. APPLICATION DOCUMENTS FOR THE ISSUE OF AN INVESTMENT LICENSE FOR SCIENTIFIC AND TECHNOLOGICAL ACTIVITIES.

The application documents for the issuance of an Investment License of scientific and technological organizations with foreign investment capital include the documents stipulated in Article 107 of Decree No. 24/2000/NĐ-CP, among which the Investor needs to explain clearly the following contents:

a) Objectives, scale, fields, and types of scientific and technological activities;

b) Number and projected structure of key research staff;

c) Technical infrastructure and equipment;

d) Decision of the direct managing authority of the Vietnamese Party (if the Vietnamese Party participating is an organization using state-owned capital) agreeing to join the scientific and technological organization with foreign investment capital.

2. AUTHORITY TO CONFIRM FOREIGN-INVESTED SCIENTIFIC AND TECHNOLOGICAL ORGANIZATIONS.

Based on the application documents for the issuance of an Investment License and the establishment and operation conditions of foreign-invested scientific and technological organizations stipulated in this Circular, the Ministry of Science, Technology, and Environment has the responsibility to confirm foreign-invested scientific and technological organizations. On the basis of the approval opinion of the Ministry of Science, Technology, and Environment, the Ministry of Planning and Investment decides to issue an Investment License along with preferential treatment for foreign-invested scientific and technological organizations, and within three working days sends these decisions to the Ministry of Science, Technology, and Environment so that the Ministry of Science, Technology, and Environment can register scientific and technological activities for foreign-invested scientific and technological organizations.

VI. IMPLEMENTATION PROVISIONS

This Circular takes effect fifteen days from the date of signature.

During implementation, if any difficulties arise, they should be promptly reported to the Ministry of Science, Technology, and Environment for study, amendment, supplementation, or specific guidance on resolution to make it appropriate./.