Continue to Improve the State Management Mechanism for FDI Projects

of our country. Practice shows that the 1987 Law on Foreign Investment in Vietnam, although amended many times, cannot regulate all the issues raised. Therefore, the completion of the legal framework on foreign investment in the coming time needs to be closely linked with the implementation of the Strategy for building and perfecting the Vietnamese legal system, the Judicial Reform Strategy until 2020, administrative reform efforts, international economic integration, the roadmap for implementing international commitments related to investment... More specifically, when considering amending and perfecting the law on foreign investment in Vietnam, legislators must always identify it in relation to other laws, with the entire legal system, not only the current ones, but also take into account the forecasts for completion in the coming time.

The completion of the legal framework on foreign investment cannot be separated from the concern for and improvement of the enforcement of foreign investment laws. Although many legal regulations on foreign investment in Vietnam are considered to be open and favorable for foreign investors, if we look at the information assessing the reliability or level of enforcement of these legal regulations in practice, we must recognize the "gap" between legal documents and practical implementation. The dispute resolution mechanism, including the court and arbitration mechanisms related to foreign investors in their relations with state agencies and business partners, has not really received widespread acceptance among foreign investors. One of the important documents characteristic of the market economy is the Bankruptcy Law, which, according to many investors, is not enough to be put into practice. The work of improving capacity, effectiveness of law application and enforcement is a complex task, requiring time and effort, including the need to do a good job of legal training, vocational training to raise awareness and understanding of the law for everyone, especially officials and civil servants, effectively implementing the law on anti-corruption (ie the human factor), and issues of organizational structure. However, this is a task that our country can do and must do well when we are all determined and share this work.

Continue to research and soon amend a number of policies to create more favorable conditions for the operations of foreign-invested enterprises.

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For example, amend and supplement a number of policies related to land use rights, site clearance, etc. Strongly and synchronously develop the capital market system to create conditions for most enterprises to mobilize capital for investment conveniently, as well as to participate in all fields that the State does not prohibit.

The signing and implementation of international treaties related to FDI in the past 20 years have also provided our country with many lessons. For example, many domestic legal regulations on FDI are sometimes new and complicated for us, but they are common regulations in investment laws of other countries or in modern international treaties on investment in the world. Therefore, it is important to regularly research, evaluate and summarize the signing and implementation of Vietnam's international treaties on investment, as well as to study and select appropriate provisions of international and foreign laws for reference in the process of building and perfecting the legal framework on investment in the context of Vietnam's increasingly deep international economic integration. Continuing research to prepare for negotiations, signing or joining international treaties, including the 1965 Washington Convention on the Settlement of Investment Disputes between States and Citizens of Other States, actively and proactively participating in the negotiation of the contents of the Doha Round (currently in the final stage) within the framework of the WTO and a number of other investment treaties... needs due attention. This is also a task set out in the Strategy for Building and Perfecting the Vietnamese Legal System by 2010, with a vision to 2020.

Although Vietnam's foreign investment law still has some issues that need further research and improvement, it is an important part of Vietnamese law, contributing effectively to the country's industrialization, modernization and international economic integration. The policy of continuing to strongly attract foreign investment of our Party and State is in accordance with the spirit of the Resolution of the 10th National Party Congress, especially in the current period, when most countries have opened their doors to welcome and compete to have

FDI is posing new requirements for perfecting the legal framework on FDI in Vietnam.

1.2. Simplify administrative procedures

State management of foreign direct investment has a particularly important role and significance in attracting and effectively using FDI capital. In many aspects, state management of the economy in general and foreign direct investment activities in particular belongs to the investment environment in a broad sense. However, this field also has its own role.

The impact of State management on FDI activities is determined by the level of State intervention in these activities. Each country has its own economic development policies and strategies, and therefore has its own management regulations for foreign investment activities. However, in the context of regionalization and globalization, these regulations must move towards common standards, and moreover, be competitive with other countries. Thus, the guiding viewpoint in the innovation of State management on foreign direct investment activities is simplification, facilitation and liberalization. Existing documents and practical observations show that we still have a lot of work to do in this area.

First of all, it is necessary to continue to simplify investment registration procedures, limit and eliminate cumbersome, complicated, difficult to understand and difficult to apply procedures in practice. In addition to simplifying procedures, it is necessary to shorten the time to process procedures, avoid duplicate procedures. It is necessary to unify regulations and the order of implementation of administrative procedures in the overall investment registration process so that they can be implemented uniformly in localities.

Clearly define and eliminate overlaps in State management of the activities of enterprises with foreign direct investment, mainly between the Ministry of Planning and Investment.

Investment, provincial and municipal authorities and Management Boards of Industrial Parks and Export Processing Zones.

However, simplifying investment procedures is not simply a matter of "cutting" but must be based on criteria such as: the necessity, rationality and legality of the procedures. Meanwhile, many procedures in the investment sector have many regulations related to enterprises and foreign investors, so if abolished or amended carelessly, it will seriously affect the socio-economic development of the country. However, if the regulations are too strict, it will affect enterprises or violate the provisions of international treaties that Vietnam participates in. Therefore, to ensure the simplification of procedures, it is necessary to mobilize a force of experienced experts to participate in reviewing the procedures. In addition, it is also necessary to increase the collection of recommendations from enterprises and foreign investors on administrative procedures, survey the practice of current procedures, compare with developing countries with conditions relatively similar to Vietnam to consider simplifying the procedures.

2. Continue to improve the State management mechanism for FDI projects

Continue to decentralize the management of foreign investment to localities. Decentralization of the management of foreign investment to the People's Committees of provinces and cities and the Management Boards of Industrial Parks must ensure the principle of unity in planning, structure, policies, and management mechanisms; strengthen guidance, inspection, and supervision of central ministries and branches; improve implementation discipline to promote local initiative and creativity while avoiding disruption of planning and loopholes. Decentralization is related to all stages of the management of foreign investment, including stages before and after granting investment licenses.

It is necessary to improve the investment monitoring and evaluation mechanism, enhance the transparency and accuracy of monitoring and evaluation reports, and specify sanctions for violations to increase the trust index for those who decide to invest in projects.

It is necessary to issue a unified legal mechanism for state management agencies to organize supervision and evaluation of all investment activities in accordance with regulations.

Focus on guiding, inspecting and supervising the implementation of legal policies of localities to avoid the issuance of preferential policies beyond the framework; gradually reduce the direct participation of central management agencies in handling specific issues, in which the tasks of investment appraisal and post-audit are enhanced; train and foster management staff from central to local levels through organizing short-term training courses.

Effectively implementing the “one-stop” mechanism in administrative procedures and promptly resolving arising problems will help enterprises implement projects smoothly; encourage them to invest in depth and expand production to achieve higher socio-economic efficiency. (This is the best way to convincingly demonstrate the FDI environment in Vietnam to potential foreign investors).

Continuously improve the State management apparatus for FDI enterprises, ensuring clear assignment and division of responsibilities, powers and authorities for relevant ministries and branches from the central to local levels in the management and appraisal of foreign investment licenses. Gradually improve the process of managing, inspecting and supervising the activities of enterprises after being granted investment licenses as well as focusing on removing difficulties and obstacles in project implementation, supporting FDI enterprises to operate effectively in production and business. Resolutely dissolve projects that are not feasible in order to reclaim land for new projects, encourage and facilitate large projects, technology transfer projects, and expand production and business.

Based on the goal of attracting FDI, it is necessary to pay special attention to building an FDI attraction strategy and consider it a part of the overall economy in general and the foreign economic strategy in particular. The FDI attraction strategy must be consistent with the foreign economic strategy and effectively serve the country's socio-economic development strategy.

Gradually improve the quality of forecasting on international economic development trends and increase national reserves to proactively propose effective solutions to cope with fluctuations in the international market, helping businesses reduce risks in investment and business. The forecasting function and responsibility for forecast quality belong to the Government's macro-management agencies, including the Ministry of Planning and Investment, other sectoral and functional management ministries. Instead of focusing on operational management tasks, these agencies need to focus on short-term and medium-term forecasting, thereby advising the Government to adjust policies promptly and effectively to adverse fluctuations in the international arena.

Support and promote Vietnamese enterprises to invest abroad through incentive and preferential policies in fund establishment and investment loans; simplify administrative procedures in licensing, expand the licensing registration regime. Conduct a review of prohibited and restricted investment sectors, combined with agreements under bilateral and multilateral treaties and agreements that Vietnam has signed to provide a more generous mechanism for foreign investment.

Properly resolve the relationship of interests between the State and foreign investors in developing FDI enterprises. The purpose of investors is to maximize profits, while the purpose of the State is the economic and social efficiency that the projects bring. Therefore, it is necessary to consider the needs, capabilities and advantages of each party. Investment cooperation between the State and foreign investors is essentially finding a "meeting point" of interests on the principles of agreement, voluntariness, equality and mutual benefit. To properly handle this relationship, it is necessary to properly handle the relationship between the State's management rights and the autonomy of FDI enterprises. Regarding the State's capital, assets or resources in enterprises, it is necessary to distinguish between ownership and the right to use assets in order to determine the authority and responsibility of those who represent the State in management and use.

In addition, it is necessary to continue to promote the issuance of incentive mechanisms.

FDI

Preferential land policy

Implement well the land and site clearance policies. Early end the mechanism of contributing investment capital by land use rights value, switch to implementing the regime of long-term land lease by the State (about 50-70 years), collect one-time payment when signing land contracts to supplement the city's development funds. Accordingly, investors have full rights to decide, use, lease, and mortgage during the land lease term. Reduce land rent and other service fees. Adjust and rearrange the list of districts when determining land rent in accordance with the actual ability to attract foreign investment.

Continue to supplement land for industrial and handicraft development and allow the conversion of part of agricultural and forestry land to form industrial clusters according to the plan. Develop preferential land policies to encourage domestic and foreign investment in the province.

For industrial parks and export processing zones, there should be a separate mechanism for land lease, according to the principle of minimizing the rental fee; in some special cases, land tax may not be collected for a certain period of time. Apply a unified compensation policy when the State reclaims land (regardless of land used for security - defense or foreign investment). The land price for compensation must be close to the land use right transfer price on the market at the current time. Simplify land allocation and land lease procedures. The organization assigned or leased land is responsible for paying compensation to the person whose land is reclaimed, but the Vietnamese side must be responsible for site clearance and only hand over the land to the FDI project owner when the site clearance has been completed. Urgently announce and mark the land use planning in public. On the other hand, loosen and liberalize the transfer of land use rights to stimulate construction investment from all domestic and foreign capital sources, strongly developing the real estate market in the area.

Preferential policies on foreign exchange finance

In the policies to encourage foreign investment attraction of countries, financial incentives always occupy an important position and are always considered as an attractive point for foreign investors. Financial incentives often include tax rates, tax exemption periods, credit incentives, fees and depreciation time regulations. These are important tools that not only create attractiveness for foreign investors but also guide them to invest in the development direction of the host country.

The attractiveness of foreign investors depends largely on the investment tax rate for them. If the investment tax rate is low and reasonable, it will contribute to reducing investment costs, thereby increasing the opportunity for high profits. On the other hand, the investment tax structure also affects the selection of objects, orientations, scale and forms of investment. To encourage foreign investment in line with the development orientation of the host country, priority investment sectors, orientations and forms are often applied with low tax rates. Therefore, it is necessary to continue to maintain tax incentives and tax exemptions such as corporate income tax, import and export tax, land use tax, etc. for FDI enterprises. It is necessary to apply tax laws consistently, avoiding frequent changes that cause anxiety for enterprises and affect their long-term plans.

Reduce personal income tax for domestic and foreign scientists who carry out technology transfer. Increase state budget expenditure and encourage private investment in developing training services to improve the capacity and professional qualifications of state officials at all levels and Vietnamese workers involved in management or working directly in foreign-invested enterprises. There are specific financial incentives (tax reductions) for FDI projects on technology training, vocational training, technical training, worker and manager training for medium and long-term investment projects.

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