PM outlines measures to improve FDI efficiency

Vietnam’s Prime Minister Pham Minh Chinh has signed a directive clarifying tasks and solutions to enhance the efficiency of foreign investment in the new period.

Under Directive 14/CT-TTg, dated May 24, 2023, the PM requested the Ministry of Planning and Investment (MPI) and centrally-managed cities and provinces promptly complete their planning for the 2021-2030 period, with a vision to 2050.

Ministries and agencies need to urgently review, amend, supplement and complete provisions for specialized laws; promptly remove problems related to administrative procedures; and resolutely cut unnecessary administrative procedures that increase compliance costs, said the cabinet leader.

The PM assigned the MPI to report the feasibility of building a law on venture investment, while developing a database on Vietnamese enterprises that are capable of becoming suppliers for foreign-invested firms.

The ministry was also asked to coordinate with the Ministry of Finance and relevant ministries and agencies to design solutions to attract investment and outline non-tax incentives in line with international regulations and commitments. This must be done in the spirit of harmonizing the interests of all parties, encouraging existing and new investors, while ensuring equal treatment, says the document.

The Ministry of Labor, Invalids and Social Affairs was ordered to apply policies and measures to enhance skills for workers to meet the demands of investors, including foreign investors.

The Ministry of Science and Technology was tasked with preparing a proposal on supplementations and adjustments to a decision on regulations to import used equipment, machinery and technology chains with simplified procedures by June 2023, while devising policies to encourage cooperation and technology transfer for Vietnamese businesses.

The Ministry of Finance must review and complete the current legal system, and build a roadmap to apply the global minimum tax rate and submit it to the National Assembly at its next session scheduled for October 2023.

Removing obstacles to foreign investment

The Prime Minister requested ministries and agencies to review problems in the process of implementing legal regulations on investment, while cutting cumbersome administrative procedures that cause difficulties for investors and people.

A review of investment-related international treaties is also requested in order to conform with new standards and ensure the state's management authority, preventing overlapping that can cause difficulties for investors.

The performance of public officials needs to be monitored, and any cases that cause difficulties to investors must be strictly dealt with, he instructed.

The PM asked for administrative reforms and digitizing documents and procedures related to investment, contributing to building an e-government in accordance with the government's resolutions.

Ministries and agencies must strengthen dialogue with the business community in a sincere, substantive and effective manner in the spirit of harmonizing benefits and sharing risks. Annually, the chairpersons of the people's committees of centrally-run cities and provinces must hold at least two dialogues with the business community, especially FDI enterprises, to listen to their difficulties and issue timely solutions.

The people's committees of centrally-run cities and provinces were assigned to draw up development investment plans and organize the construction of technical and social infrastructure outside industrial parks, export processing zones, high-tech parks, and functional areas in economic zones.

Ministries, agencies and localities must review and grant investment registration certificates and notifications of capital contributions or share purchases in line with the list of industries and trades with restricted market access to foreign investors.

They were required to fully and strictly comply with legal provisions on investment, enterprises, land, housing, construction and tax in the process of appraising and managing foreign-invested projects, thereby avoiding domestic and international complaints and disputes.

Careful appraisal and assessment of technology, technical standards, product quality, environment impacts and the investment rate of foreign-invested projects in fields where investors show signs of taking advantage of Vietnamese origin to evade trade remedies and taxes is also required.

Improving efficiency of investment attraction

The Prime Minister requested investment promotions follow the approved national list of projects calling for foreign investment in the 2021-2025 period. Local administrations were asked to issue their own wishlist of projects and make them timely available to investors.

Authorities need to actively approach large corporations and discuss with them preferential packages and investment support mechanisms within the framework of high-level external activities of the Party, State and Government leaders.

The packages can be in the form of cash grant, labor training or infrastructure development.

They must grasp international investment trends and supply chain trends to propose solutions to attract high-quality foreign investment capital flows, especially in key areas like digital technology, semiconductors, microchips, and software and hardware assembly and production.

Registered FDI capital in Vietnam declined 17.9% to $8.88 billion in the first four months of 2023, while disbursed capital dropped 1.2% to $5.85 billion. Registered FDI capital included newly registered capital, additional capital of ongoing projects, and capital contributions for stake acquisitions.