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The Dynamism and Pioneering Nature of Provincial Leadership

* The dynamism and pioneering nature of provincial leaders

Table 14: Dynamism and pioneering nature of provincial leaders


Target

Eternal happiness

Binh Duong

Percentage of businesses that believe provincial officials have a good grasp of current policies and regulations to address issues businesses face within the framework of

legal


91.41


90.83

Percentage of businesses that believe provincial officials are creative and responsive within the legal framework to

Solve the problems private enterprises are facing


83.33


85.05

Percentage of businesses that believe all innovations

Good ideas come from provincial governments, but central government limits the implementation of these initiatives.


38.46


43

Percentage of businesses that say there is no innovation

Any quality ideas are proposed at the provincial level, all good policies come from the government.


21.55


22.22

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Vinh Phuc

Binh Duong

(Source: http://www.pcivietnam.org)

* Policy on private economic sector development

Table 15: Private economic sector development index


Target

Binh Duong

Vinh Phuc

Percentage of enterprises satisfied with the quality of market information services provided by provincial agencies


34.86


29.10

Percentage of businesses satisfied with the quality of business partner search support services provided by government agencies

province provided


30.00


24.17

Percentage of businesses satisfied with the quality of technology services and other technology-related services

provided by provincial agencies


39.80


33.87

Percentage of businesses satisfied with service quality

trade promotion and trade exhibition support services provided by provincial agencies


47.06


38.10

Percentage of businesses satisfied with quality

Industrial park/cluster development policy for small and medium enterprises of the province


72.90


62.99


Vinh Phuc Province

Binh Duong Province

(Source: http://www.pcivietnam.org)

In terms of the two indicators of dynamism and pioneering of provincial leaders and policies for developing the private economic sector, both Vinh Phuc and Binh Duong provinces ranked first in the region with high scores.

3.2. Investment incentives and investment promotion that the two provinces provide for FDI activities

3.2.1. Investment incentives and promotions of Vinh Phuc province

In addition to the general policies of the whole country that the government has given to investors, Vinh Phuc attracts foreign investment with many attractive incentive policies for investors such as:

- Investment projects in the manufacturing sector in Lap Thach district and mountainous communes of Tam Duong, Me Linh and Binh Xuyen districts are exempted from taxes for an additional 8 years; investment projects in industrial parks, industrial clusters and other areas are exempted for an additional 5 years.

- Projects that satisfy one of the following conditions are exempted from 100% of land rent: investing in high-rise apartment buildings (3 floors or more) for urban lease, serving industrial parks and industrial clusters, investing in the construction of cultural, sports, entertainment and recreation facilities serving the people, processing agricultural products and food using over 30% of raw materials in Vinh Phuc. Compensation, site clearance, investment in the construction of technical infrastructure for industrial parks and industrial clusters are supported at 8%, using high technology and employing 50 or more workers are supported at 10%, having investment capital of 10 billion VND or more and employing 50 or more workers is supported at 10%, processing agricultural products and food using over 30% of raw materials in Vinh Phuc province and employing 50% or more workers is supported at 15%. Investment in industrial parks and industrial clusters in the delta districts of Tam Duong, Vinh Tuong, Yen Lac is supported by 20%. Investment in high-rise apartment buildings (from 3 floors or more) for urban lease, serving industrial parks and industrial clusters in Vinh Yen town, Binh Xuyen, Tam Duong, Vinh Tuong, Yen Lac, Lap Thach districts and cultural, sports, entertainment, medical, educational facilities are supported.

support from 50-100%. Production investment in Lap Thach district, mountainous communes of Tam Duong and Binh Xuyen districts and industrial clusters in Vinh Yen are supported 100% (excluding rice land). The above support level does not exceed 2 billion VND. In case the project meets many conditions, it will only enjoy the incentives of the condition with the highest incentive level.

- Loan support: Domestic investment projects to build high-rise apartments (3 floors or more) and urban rental housing, serving industrial parks, industrial clusters and cultural, sports and entertainment facilities in the province can be considered by the Provincial People's Committee for loan interest support from credit institutions for each specific project.

- Support for vocational training costs for provincial workers : Projects eligible for incentives under this regulation are new investment projects that employ untrained workers from Vinh Phuc province and are supported by the provincial budget with a one-time vocational training cost of VND 500,000/person. In case Vinh Phuc province organizes basic training, enterprises are only supported with VND 200,000/person.

- Support for infrastructure construction: Vinh Phuc province ensures the construction of infrastructure including roads, power supply systems, water supply systems, and communications to the fences of industrial parks, industrial clusters, concentrated industrial solid waste treatment areas, and detailed planning areas of industrial parks and industrial clusters approved by competent authorities. Investment projects in areas outside industrial parks and industrial clusters as required by the province associated with raw material areas are supported with 30% of the cost of building roads and water supply lines outside the fence when the competent authority approves the budget.

Having determined the right steps, Vinh Phuc has rolled out the red carpet for investors when they come to operate in the province. While the whole country has not yet implemented administrative reform, has not yet implemented the "one-stop, one-stop" mechanism, Vinh Phuc has pioneered in doing this, investors coming to Vinh Phuc have shortened 2/3 of the time according to the Central regulations when applying for investment licenses.

Specifically: The maximum time limit for granting investment licenses and incentive certificates from the date the Industrial Park Management Board or the Department of Planning and Investment receives complete and valid documents until the granting of investment licenses is stipulated as follows:

- 03 days for projects subject to investment license registration;

- 10 days for projects eligible for investment incentives;

- 20 days for projects subject to investment license appraisal.

Project implementation: After being granted an investment license, the maximum time (excluding holidays) from the date of receiving a complete and valid dossier until the completion of the following tasks for the enterprise under the authority of the provincial authorities is stipulated as follows:

+ 50 days to complete compensation and site clearance for projects outside industrial parks, industrial clusters or in industrial parks, industrial clusters but have not yet cleared the site;

+ 10 days to complete the issuance of land use right certificates, including the measurement and mapping of cadastral maps at locations where site clearance has been completed;

+ 8 days to complete the issuance of tax codes, customs codes, and confirmation of import-export plans;

+ 5 days to complete the seal engraving;

+ 10 days for completion of construction procedures.

3.2.2. Investment incentives and investment promotion of Binh Duong province

Binh Duong is a province with a long history in attracting FDI. With its location adjacent to Ho Chi Minh City, land rental prices are the province's comparative advantage over neighboring areas; services provided to industrial parks and investment projects such as electricity, water, labor, information, etc., Binh Duong province has invested to ensure sources to provide to investors. These are important factors for investors to enjoy this preferential land rental price.

For investment projects in concentrated industrial zones, investors, especially in the fields of electronics and agricultural processing for export with advanced technology, will be encouraged with land rental prices lower than the average price frame.

For investment projects in the fields of transportation, planning to develop clean green vegetable areas to supply urban areas, agricultural processing, livestock, investment in developing long-term industrial crops such as rubber... in the north of the province will be encouraged such as: land rental prices reduced, the state invests in supporting technical infrastructure systems...

Regarding corporate income, the province has the following preferential policies:

- Projects operating in the service sector: annual corporate income tax rate is 20% of taxable income. Enterprises are exempted from corporate income tax within 02 years from the time of making profit and reduced by 50% in the next 03 years.

- Projects exporting over 50% of products, in the list of investment incentive projects: annual corporate income tax rate is 15% of taxable income. Enterprises are exempted from corporate income tax within 02 years from the time of making profit and reduced by 50% in the next 03 years.

- Projects in the list of special investment incentives, projects in the fields of medical examination and treatment, education and training and scientific research, enterprises developing infrastructure for industrial parks, export processing zones, high-tech zones, and export processing enterprises: annual corporate income tax rate is 10% of taxable income. Enterprises are exempted from corporate income tax for 04 years from the time of making a profit and reduced by 50% for the next 04 years.

So clearly in terms of investment attraction policy, Vinh Phuc province promises more incentives than Binh Duong province.

3.3 Other factors in business support

Transparency is one of the important factors that scholars and researchers have developed strongly to distinguish the environment.

which environment is conducive to the operation of the private sector. Tara Vishwanath and Daniel Kaufman define transparency as follows: “It is the increase in the flow of timely and reliable information about economic, social and political issues such as the provision of public services, monetary and fiscal policies… In contrast, a lack of transparency is understood as someone intentionally withholding access to information or providing misleading information or failing to ensure that the information provided is relevant and of satisfactory quality”. Therefore, to evaluate the effectiveness of transparency includes the following five attributes: accessibility, fairness, consistency, predictability and openness.

Table 16: Summary of indicators to assess the transparency of the province



Conscious


Year


Access to documents and texts

Fairness and stability in

application of the text

Predictability of text


Website Openness


Component Index: Transparency

Group of indicators

Part 1


Component indicator group 2

Component indicator group 3

Group of indicators

Part 4

Component index group

1+2+3+4

Binh Duong


2007

1.56

1.8

0.98

3.1

7.44

Vinh Phuc

1.33

1.39

1.09

3.19

7

nationwide max

1.74

1.8

1.26

4

8.56

the whole country

0.36

0.84

0.45

0.4

2.24

Binh Duong


2008

1.41

1.78

1.24

3.28

7.72

Vinh Phuc

1.07

1.49

1.19

3.64

7.39

Nationwide max

1.41

1.78

1.38

4

7.92

The whole country

0.57

0.97

0.43

0.4

2.99

(Source: Self-compiled from PCI 2007 and PCI 2008, according to available documents from VCCI)

The group of indicators of access to information is defined as the timely disclosure of information. Although according to the law, all actors and organizations have the right to access information on land and planning work,

In the Vietnamese context, access to information is often difficult. In the Vietnamese context, this can have a negative impact, hindering the growth of the private sector because these sectors do not benefit from their initiatives. Accessibility also includes the availability of new legal documents, implementing guidelines or provincial decisions. When legal changes are not easily accessible, businesses may only operate for a few years and then discover that they are breaking the law, simply because they did not know. In most cases, the lack of information causes a lot of harm to businesses, but it is always an opportunity for public officials to exploit the information asymmetry for their own gain. On the contrary, businesses, even though they are qualified to operate or should be entitled to tax refunds, do not enjoy those benefits simply because they do not know. Looking at the table, we can see that in 2007, the country had the highest index of access to legal documents at 1.74 and the lowest at 0.36. The two provinces of Binh Duong and Vinh Phuc respectively reached the mark of 1.56 and 1.33. This threshold is quite high compared to the general level of the country, and the two provinces seem to have an advantage in making the process of receiving information of enterprises regarding legal documents transparent. However, if we only consider the two provinces of Vinh Phuc and Binh Duong, we can clearly see that enterprises in Binh Duong province have access to legal documents and grasp changes or new factors in the law earlier and in more detail than enterprises in Vinh Phuc province. And by 2008, the national target for accessing written documents had decreased, from 1.74 to 1.41, in the general trend of the whole country, the scores achieved by Vinh Phuc and Binh Duong provinces also decreased to only 1.41 and 1.07, and Binh Duong province was still ahead of Vinh Phuc province. Thus, over the years we see that both provinces are in a high position compared to the whole country, but Vinh Phuc province is always lower than Binh Duong province.

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