Unanimous Awareness of the Important Role of Fdi.

direction, so as the above section says, this law still has many shortcomings in both content and legal basis. Although the Charter has been supplemented and amended many times, due to the ever-changing domestic and international situation, it is necessary to continue to improve the legal system in Vietnam. Currently, Vietnam is a member of ASEAN and the WTO trade organization (November 7, 2006). To be able to integrate into the activities of these organizations to take advantage of the advantages they bring, Vietnam needs to quickly improve the system of mechanisms and policies to suit the standards of related organizations. that conclusion.

- Third: Improve on the basis of learning from experiences of countries in the region. Many countries in the geographical region are ahead of us in applying mechanisms and policies to the field of FDI attraction, serving to accelerate the speed of investment.

economic growth. Therefore, they have a lot of experience in perfecting the system of mechanisms and policies to increase FDI attraction and use it effectively. For this reason, we need to learn from their experiences, so that the improvement of mechanisms and policies to attract FDI can proceed smoothly and bring high efficiency. For Vietnam, learning from China's experience is very necessary, because China is a country with a similar political system to Vietnam and has been very successful in perfecting mechanisms and policies to attract capital. FDI. For Hanoi, it is necessary to study the system of mechanisms and policies to attract FDI and Singapore's economic development path, in the process of developing Hanoi Capital to become the financial and commercial service center of Vietnam. Male. Researching the process of perfecting mechanisms and policies to attract FDI of countries in the region is not only to learn from their experiences, but also to help us have more appropriate policies in the process of competing to attract FDI.

- Fourth: Must ensure synchronization, clarity, transparency, stability, consistency and non-discrimination. Ensuring the principles for the system of mechanisms and policies to attract FDI must be clearer, more transparent, stable, consistent and non-discriminatory after each completion. international economic organizations, especially the WTO during the participation process

Participate in integration and attract international economic corporations to invest in technology transfer and direct investment in Vietnam in general and Hanoi in particular.

3.3. Solutions to improve mechanisms and policies to increase attraction of foreign direct investment in Hanoi by 2010.

In the period from now to 2020, with the goal of turning Hanoi into a center of finance, trade and high-tech development, the need for capital is the decisive factor. In addition to mobilized capital

From promoting internal resources, foreign direct investment is also an important part. The improvement of mechanisms and policies in the fields of land, taxes, financial incentives, labor, markets and product consumption,... is aimed at enhancing the ability to mobilize capital. FDI. When completing the above mechanisms and policies, they must be placed in a synchronous, unified and mutually supportive relationship.

3.3.1. Agree on awareness of the important role of FDI.

After nearly 20 years of opening to receive foreign direct investment, through summary analysis, the leaders of Da Lat city agreed to evaluate the important role of FDI: "The source of foreign direct investment in Da Lat making an important contribution to the economic restructuring of Hanoi, implementing industrialization and modernization, quickly forming an economic structure including: Industry - Services - Agriculture". By the end of 2005, in Hanoi

DL has 650 DL projects granted investment licenses with a total registered investment capital of 9.24 billion USD, DL has formed 5 concentrated industrial parks (Noi Bai - Soc Son, Sai Dong A, Sai Dong B, Thang Long, Taitu) with an area of 784 hectares and investment capital for infrastructure of over 250 million USD [75].

Table 3.3: Foreign investment capital in total social investment capital of Hanoi city over the years

1990-

1995

1996-

1998

1999-

2001

2002-

2004

2005-

2008

2009-

2011

2012-

2014

2015-

2017

2018-

2020

21%

55%

18%

19%

22%

24%

25%

26%

27%

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Source: [75]

From the awareness of the important role of FDI in economic development as above, Hanoi has an overall orientation for economic development planning - capital city expansion until 2010 and sets targets to attract FDI capital to 2020.

Whether or not the targets and plans can be achieved depends greatly on the work of instilling awareness among city leaders about the importance of FDI to the district, ward, and xL levels of government. Once all management apparatuses at all levels fully realize the importance of FDI to Hanoi's economic development, all bottlenecks in administrative procedures, site clearance as well as difficulties will arise. During the operation of enterprises with foreign investment capital, issues will be resolved quickly and reasonably. From there, it not only stimulates new investors to invest in Hanoi but also motivates existing businesses to expand production scale and invest in new technology lines applying advanced techniques.

3.3.2. Complete solution for the legal system.

The process of perfecting the legal system must meet the institutionalization of policies to develop a multi-sector economy; all economic sectors must operate on a common, equal legal framework. It is necessary to create a legal environment for foreign investment activities in Vietnam following the trend of synchronization of laws, in accordance with the domestic situation and international practices. Increase pros

Financial incentives for investors must go hand in hand with strict control of factors that negatively affect the stable and sustainable development of both the economy and society (such as the ability to cause environmental pollution). market, unfair competition). It is necessary to attach importance to both promulgating new regulations and removing regulations that are not consistent with international practices (such as considering double taxation, or requiring joint ventures to pay taxes for land use rights that the Vietnamese side use it to contribute capital when participating in joint ventures), avoid overlaps and conflicts between laws, between the Decree and circulars and decisions of all levels.

When conducting investment activities, businesses often encounter many problems related to the law (such as capital contribution, land lease, labor recruitment).

activities, import and export...), although the new Investment Law stipulates that if

Without specific guiding documents, they will be confused or misapply the laws, so it is necessary to promptly issue by-law documents. Requirements for these documents when promulgated, their content must be clear, transparent and necessarily consistent with the law.

The attractiveness of a country in terms of attracting FDI must first be reflected in its investment laws. For every country, the Foreign Investment Law is a concrete proof of openness and something that all investors are interested in. Therefore, it is necessary to accelerate the implementation of the General Investment Law. Delays in promulgating specific circulars will reduce the legal effect of the law in particular and Vietnam's legal system in general. Male. The City coordinates with ministries to soon complete and supplement documents and circulars guiding the implementation of Decree 108/2006/ND - CP, dated September 29, 2006, Decree detailing implementation. The Law on Investment in Vietnam 2005 ensures uniform implementation from the Central Government to localities and businesses. At the same time, research and overcome legal conflicts between the Investment Law and other laws such as Civil Law, Land Law, Banking Law,... to create an open and clear legal corridor. , transparency for production and business activities of enterprises.

The government needs to resolutely eliminate regulations imposed by sectors and industries

promulgated by localities contrary to the Government's legal policy, avoiding the situation where the king's permission falls short of village customs, creating a fully synchronized legal system throughout from the Central to localities.

The principle of perfecting the legal system must be to ensure that it creates a level, non-discriminatory "playing field" for FDI enterprises and domestic enterprises, especially for foreign enterprises. has state capital. In the process of developing policies, it is necessary to get opinions from experts, foreign investors, and domestic partners, and at the same time make policies based on reality. It is necessary to organize periodic summaries of the situation of FDI attraction and operations of foreign-invested enterprises to, on the one hand, learn from experience in management work, and on the other hand, detect shortcomings.

rationality of the policy mechanism and perfecting it. In the coming time, priority should be given to perfecting mechanisms and policies in the following areas: Finance, land, technology, labor, market, ...

The city needs to speed up the process of drafting and promulgating documents specifically guiding the implementation of the Investment Law in Hanoi, avoiding the situation where the charter law is issued but departments, branches and districts are confused. Know the direction of implementation that affects the effectiveness of the law. At the same time, the city needs to urgently draft mechanisms and policies to attract investment in accordance with the capital's specific conditions, in order to remove current obstacles and orient long-term, sustainable economic development. sustainable for Hanoi. In this drafting, the content must be consistent with the new Investment Law and include extensive comments from all levels, sectors, research institutes and investors in the city, before synthesizing. submitted to the Government. Investment promotion regulations must take into account international practices, especially regulations of AFTA, APEC, WTO and incentive levels to attract FDI of countries in the region.

It can be said that Vietnam's legislative level still has many shortcomings, and implementation work has even more shortcomings. The 1996 Foreign Investment Law was promulgated on November 23, 1996, but it was not until 1998 that detailed implementation instructions were issued by Decree 12/1998/ND-CP, and then waited for circulars from related ministries and branches. authorities and decisions of the City People's Committee guiding specific implementation, in 2000 the Government issued a new Foreign Investment Law. Thus, the time for managers to apply both old and new laws at the same time is prolonged, creating loopholes for negative phenomena to have opportunities, weakening the enforcement effect of the law, not to mention causing problems. intentional misuse of the law. To complete the above issue, as soon as the law drafting committee submits it to the National Assembly for approval, it must also propose a plan to guide implementation. Once approved by the National Assembly, the implementation guidance plan will be the basis for ministries, branches and local governments to draft circulars and decide on specific implementation instructions. If we consider specifically the 2005 Investment Law passed by the National Assembly and promulgated in November 2005, then no later than April 2006 there must be a Resolution.

guidelines and by August 2006, circulars and decisions with specific guidelines must be issued. Thus, the implementation process will have a clear implementation plan, avoid the phenomenon of waiting and violating the law due to intentional violations, and at the same time enhance the effectiveness of the law in State management.

3.3.3. Complete solutions for mechanisms and policies to attract FDI in the financial sector.

Regarding tax policy and financial incentive mechanism. Perfection according to direction

Adjusting unreasonableness in current tax policy, adding advantages

Practical and highly attractive to areas that need investment encouragement . Tax policy and financial incentive mechanism are one of the main factors constituting the attractiveness of the foreign direct investment environment. Therefore, it is necessary to continue to improve it in the direction of ensuring systematicity, stability and compatibility with countries in the region, quickly eliminating limitations caused by current tax policies and financial incentive mechanisms. go out. Along with implementing the above solutions, Hanoi must issue more preferential economic and financial policies for foreign investors investing in the field of high technology and source technology, to encourage them. Strengthen and expand the scale of projects. Here are some specific solutions for finishing work:

- Value added tax and corporate income tax are two applicable tax laws

applied in the early stages to stabilize tax collection activities for foreign investment projects. The department responsible for tax collection needs to implement these two laws well, and at the same time research to propose to the Government directions for supplementing and amending them in accordance with WTO regulations.

- Implement the principle of "no retroactivity", reduce profit tax to 5% and allow enterprises with FDI capital to have the right to set up reserve funds, exempt value added tax for means of transport, without discrimination manufactured in Vietnam or abroad and imported raw materials.

- Consider reducing the tax rate for corporate income tax (currently 28% to 25% like some countries in the region) and increasing revenue

Taxable income for foreigners (reducing personal income tax from 40% to 35% to be similar to other countries in the region).

- Enhance financial incentives for investors through the application of a reasonable price system (such as electricity, water, transportation, postal, and airline prices). Allows Vietnamese parties in foreign-invested enterprises to pay taxes late, receive guarantees to borrow capital to contribute to projects or cooperate to increase financial capacity.

- Research and promulgate specific regulations to quickly resolve the tax refund process for foreign investors, creating favorable conditions for them to transfer profits back home and make capital contributions easily, deducting input taxes. when they buy products from domestic businesses.

- Support for investment licensed projects by granting new profit tax rates, new land rental prices and continuing to exempt and reduce sales tax for businesses that actually have capital losses.

- Review tax policies to correct unreasonableness, ensure the stability of these policies, and on the one hand, improve legal effectiveness.

in the tax field, on the other hand, it reassures foreign investors. Reconsider the 12 tax types from 0-100% along with the tax rate regulations based on the localization rate with the current minimum tax price managed by the State, which is not in accordance with WTO regulations. Quickly overcome the situation where the import tax on raw materials, supplies and components for domestic production is higher than the import tax on finished products. Develop regulations to manage financial activities, promulgate accounting and auditing standards in accordance with international practices, creating favorable conditions for FDI enterprises to operate effectively.

- Support for foreign-invested enterprises that are really facing difficulties, through creating conditions for credit loans based on the principle of mortgaging equipment, factories, etc.

- Quickly issue documents guiding foreign-invested enterprises to issue stocks and bonds to expand investment scale. Create conditions for some corporations with many investment projects to establish capital management companies

Ensure adequate financial provision for the implementation of projects

judgment. Investors are free to choose investment forms, investment partners, investment industries and flexibly consider and approve conversion of investment forms.

- For joint venture enterprises using high technology, producing exported goods, and building industrial park infrastructure that are facing difficulties, it is necessary to flexibly allow them to convert to 100% foreign-owned enterprises. equitized, calling for foreign investment capital contribution.

- Create conditions for foreign-invested enterprises to equitize, to increase capital for production and business development. Strengthen incentives and preferential support, proactively attract more foreign capital to invest in the fields of high technology, source technology, commercial services, and credit finance, without necessarily fixing capital ratio, but need to take advantage of all capital sources for the capital's economic development. Strengthen the development of the capital market, through creating conditions for foreign investment enterprises to establish joint stock companies and capital management companies and have mechanisms to create favorable conditions for all businesses in need. demand to participate in the stock market. This will give foreign investors many opportunities to participate

invest in the domestic market, thereby enhancing the ability to attract FDI.

- It is necessary to collect fees to recover capital, but avoid arbitrary collection. To do so, the city must promptly issue a unified fee collection policy and encourage BOT, BTO, and BT investment forms. Hanoi.

- Participate in cooperation and sign bilateral trade cooperation, creating

Favorable conditions for foreign banks to operate, expanding participation in the stock market to overcome financial difficulties for businesses.

Regarding credit policy and foreign exchange management. Strongly develop the capital market, promulgate regulations to ensure the borrowing rights of FDI enterprises at credit institutions, and develop regulations to manage financial activities of FDI enterprises.

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