Government pledges to foster foreign investment with improved conditions

Vietnam commits to facilitating long-term operations of the foreign business with a transparent, favorable environment on the “win-win” principle, Prime Minister Pham Minh Chinh said on September 17.

The view of the Vietnam-Singapore Industrial Park in Quang Ngai Province. Photo: The Hanoi Times

“Vietnam and foreign corporations will work together on bases of mutual understandings, mutual growth, social and human responsibilities, harmonized interests, and shared risks, the Prime Minister said.

Vietnam commits to building a business environment in line with the standards of the Organization for Economic Cooperation and Development (OECD), he said.

Vietnam eyes political and macroeconomic stability, removal of obstacles regarding the regulatory system, infrastructure development and human resources, development of supply chains and deduction of expenses, development of an accountable, practical regulatory framework, and sharing of ideas and difficulties and cooperation on the elimination of difficulties and challenges, he said.

The nation evaluates foreign investment projects via key criteria of technological quality and environmental protection while prioritizing those in research and development, innovation and advanced technology, supply chain integration, and promotion of a sustainable digital, green, circular economy, PM Chinh said.

Amid a volatile world, the Vietnamese Government will continue to stabilize macroeconomic conditions, control inflation, secure major balances, develop a variety of markets, steady the prices of goods and services, improve the quality of living conditions for people, and assure socio-political security, he said.

The authorities will closely watch follow international developments to make prompt updates to the policies, and enhance social security and healthcare services, especially local healthcare facilities and COVID-19 vaccination, he said.

Additionally, the Government will endorse moves to push production and business activities, create jobs, hasten the disbursement of the public investment budget, eliminate unnecessary expenditures, and keep policies consistent, PM Chinh said.

On such spirit, the Prime Minister asked ministries, local authorities, and government agencies to strictly adopt the policies of the Party, the State, and the Government to put people and companies in the center of the development.

Local authorities have to balance foreign investment with their conditions, review and remove all difficulties that foreign investors have faced, and improve regulatory and administrative frameworks on international cooperation, the Prime Minister said.

The priority should be given to the development of the auxiliary industry through green transition, innovative transition and digital transformation, diversification of supply chain, technological advancement, and development of a business data center, he urged.

PM Chinh asked investors and companies to keep their faith and accompany Vietnam to recover and overcome challenges, foster their mutual interests with local authorities and people, and strictly follow the rules on national security and defense, social responsibility, and environmental protection.

“Foreign investors are a key component of the Vietnamese economy,” PM Chinh said, adding the nation will facilitate a long-term, healthy and sustainable environment for international corporations.

International corporations have created jobs for local people and assured their incomes, stabilize macroeconomic conditions, and accelerate the economic transition, he said.

“The successes of foreign investors are also those of Vietnam. The partnerships between Vietnam and international corporations reflect the multilateralism and international unification to develop a peaceful, supportive world that leaves no one behind,” PM Chinh said.

International labor

Minister of Labor, Invalids, and Social Affairs Dao Ngoc Dung said the ministry will ease work permit regulations for international experts so they can work in Vietnam.

Foreign employees will be able to partake in training activities at vocational schools and permits are needless for these cases, he said, adding that the Vietnamese Government prioritizes administrative reforms to remove any difficulties in work permits for foreign companies.

Officials partake in the meeting with international corporations on September 17. Source: VGP

In addition, local authorities may make their own decisions on the certification of working licenses, except for some complicated cases that need the approval of the ministry, Dung said, adding foreign investors can file their complaints if administrative work is slow, taking more than 5 days in standard to process the certification.

“Administrative procedures are now doable on the electronic platform to simplify the process, avoid undocumented expenses, and increase the supervision of government agencies,” the minister said.

“Vietnam sees human resources development as one of three strategic components in the sustainable development of the country,” he said.

There are now more than 112,600 international employees working in the country, so they are an important factor to solve the lack of skilled laborers in FDI projects, he said.

“Vietnam appreciates and tries to facilitate high-quality foreign specialists, managers, and employees to contribute to the country’s development and serve the interests of international corporations.”

Tax policies

Minister of Finance Ho Duc Phoc said that the ministry will always side with international corporations to resolve the problems related to investment procedures, especially tax policies.

The ministry has consulted the Government and the National Assembly to amend tax regulations to meet international rules and practices, he said.

Employees work on the production line at Rhythm Precision Vietnam Co. Ltd. in Hanoi's Noi Bai Industrial Park. Photo: Pham Hung

For instance, Vietnam has cut the common tax rate to 20% from the previous level of 25%. The tax rate for some particular projects and sectors is even down to 10%. Meanwhile, some projects may enjoy a tax rate of 9% per year for 30 years, or a 6-year tax exemption and a 50% rate cut for the following 13 years.

For ordinary projects, the company may enjoy tax exemption during the first 4 years and a 50% rate cut during the following 9 years if the project is implemented to serve public purposes and is located in the disadvantaged area.

In regard to land and water land rentals, the Vietnamese Government gives rental free during 11-15 years for projects that are built in disadvantaged areas. Additionally, the finance ministry has advised the Government to make some VND233 trillion (US$9.85 billion) worth of tax deductions for companies in 2022 to support production and business activities.

The ministry will work with international corporations to explain and resolve existing issues, minister Phoc said, adding there are some mutual disagreements between Vietnam and foreign investors but they should be worked out soon.

“The Ministry of Finance will cooperate with foreign investors and business associations to support investment projects in line with existing rules. The ministry will make utmost assistance to investors to achieve efficient production and business operation.”