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  • Enhancing National Policies

    This section describes the most recent investment-specific and investment-related measures per ASEAN member state. 

    • Viet Nam

      Year

      		 Category

      		 Sub Category

      		 Description
      2014

      		 POLICIES AND REGULATIONS FOR IMPROVING INVESTMENT ENVIRONMENT

      		 Investment Law (amendment) and the Enterprise Law (amendment)

      		 Investment Law (as amended) and the Enterprise Law (as amended) are being finalized for submission to the National Assembly.
      public-private partnerships (PPP)

      		 Decree on investment in the form of public-private partnerships (PPP) are being drafted and expected to be issued in 2014.
      2015

      		 SOME CHANGES IN POLICIES AND REGULATIONS FOR IMPROVING
      INVESTMENT ENVIRONMENT

      		 Investment Law (amendment) and the Enterprise Law (amendment)

      		 Investment Law (amendment) and the Enterprise Law (amendment) passed by the
      National Assembly of the Socialist Republic of Vietnam November 26, 2014 and will
      officially take effect on 7.1.2015.
      Investment Law in 2014

      		 Investment Law in 2014 guarantees freedom of doing business in Viet Nam for investors
      when it clearly defines business lines in which the law does not prohibit.
      public-private partnership (PPP)

      		 Decree on investment in the form of public-private partnership (PPP) was issued on
      14.2.2015 and takes effect from the date of 10/04/2015.

      Decree regulates the sector, the conditions and procedures for implementation of
      investment projects in the form of public-private partnerships; mechanism for
      management and use of State capital involved in the project; incentives, investment
      guarantees and responsibility for state management of investment projects in the form of
      public-private partnerships.
      2016

      		 SOME CHANGES IN POLICIES AND REGULATIONS FOR
      IMPROVING INVESTMENT ENVIRONMENT

      		 New Investment Law

      		 New Investment Law passed by the National Assembly of the Socialist
      Republic of Vietnam November 26, 2014 and officially took effect on 1 July
      2015.
      New Investment Law in 2014 guarantees freedom of doing business in Viet
      Nam for investors when it clearly defines business lines in which the law does
      not prohibit and conditional business sectors.
      The Law on Investment 2014 also provided remarkable new regulations such
      as: Foreign investors who establish business organizations must satisfy
      conditions in terms of charter capital holding, method of investment, scope of
      operation, Vietnamese partners, and other conditions according to agreements
      to which Vietnam is a signatory.
      According to the Law, foreign investors may hold an unlimited amount of
      charter capital in business organizations, except for that of:
      − Listed companies, public companies, securities companies, and
      securities investment funds.
      − State-owned companies that are equitized or otherwise converted.
      − In case of holding in entities other than those mentioned above,
      relevant regulations of law and agreements to which Vietnam is a
      signatory shall apply.
      The New Enterprise Law

      		 The New Enterprise Law passed by the National Assembly of the Socialist
      Republic of Vietnam November 26, 2014 and officially took effect on 1 July
      2015.
      The New Law on Enterprises 2014 also simplify of procedures enterprise
      establishment as follow:
      − Certification of legal capital and practicing certificate are no longer
      mandatory;
      − Time limit for issuance of Certificate of Enterprise registration is
      reduced from 05 to 03 working days;
      The Certificate of Enterprise registration will be revoked in the following
      cases:
      − Information provided in the application for enterprise registration is
      found to be false;
      − The enterprise is established by a person banned from enterprise
      establishment;
      − The enterprise has been suspended for 01 year without notifying the
      business registration authority and tax authority;
      − The enterprise fails to submit a report to the business registration
      authority within 06 months from the deadline for report submission or
      from receipt of a written request;
      − The revocation is decided by court.
      Decree number 118/2015/NĐ-CP

      		 Decree number 118/2015/NĐ-CP was issued on 12 November, 2015 and came
      into force on 27 December 2015.
      This Decree elaborates and provides guidelines for some Articles of the Law
      on Investment in 2014 on application, control, announcement of conditions for
      investment; measures for investment assurance, investment incentives;
      investment procedures, execution of investment projects, and management of
      investment by regulatory bodies. This Decree applies to investors, competent
      authorities, organizations, and individuals involved in investment.
      Law on Real Estate Trading

      		 Law on Real Estate Trading was ratified by the National Assembly of Viet
      Nam at the end of November 2014
      This Law stipulates real estate trading, rights and obligations of organizations
      and individuals to conduct real estate trading and state management of real
      estate trading and contains many new regulations such as:
      − An organization or individual must have a legal capital of at least VND
      20 billion in order to trade in real estate (previously VND 6 billion).
      − It is not required to establish an enterprise to trade in, lease out, or
      lease purchase small real estate or on an irregular basis. However, tax
      must be declared and paid as prescribed by law.
      − The investor must obtain a guarantee from a capable credit institution
      (on the list published by the State bank) before selling or leasing out
      off-the-plan housing.
      − Specific regulations that real estate trading projects must conform to
      approved land use planning, urban planning, and rural planning.
      Law on Housing 2014

      		 Law on Housing 2014 was issued on 25 November, 2014 and came into force
      from 1 July, 2015 which allow foreigners to own housing in Vietnam
      − This is one of major changes in the Law on Housing 2014. However,
      foreigners' ownership of housing is still somehow restricted compared
      to that of Vietnamese citizens:
      − Foreigners are only permitted to purchase or lease purchase housing,
      receive housing as gift or inheritance, and own not more than 30% of
      apartments in an apartment building or not more than 250 detached
      houses in a single residential area, which is equivalent to a ward.
      − In case a foreigner holds an amount of housing beyond the said limits
      or inherits commercial housing (including apartments and detached
      houses of a housing project) in a high security area, such foreign only
      has the right to use such housing.
      − Every foreign who marries a Vietnamese citizen or a Vietnamese
      citizen residing overseas is allowed to own long-term housing and has
      the same rights as those of a Vietnamese citizen.
      2017

      		 Recent improvements to Vietnam’s Investment Climate

      		 Law on Labor:

      		 In 2016, the government introduced 2 new regulations
      concerning foreign workers in Vietnam which made it easier for foreign workers
      to come to live and work in the country, including:
      Decree 11/2016/ND-CP:

      		 Requiring firms to apply 2 months beforehand
      in the name of the employees to labor authorities to apply for a work permit and
      foreign workers to be “experts” who can generate jobs for domestic workers
      which Vietnamese workers do not qualify for, such as CEO, managers and
      technicians.etc. There is an improvement in which the term “experts” is
      expanded to practical experience of foreign workers. In another word, workers
      do not have to obtain diplomas or certificates to qualify as “experts”. If a firm
      wants to employ “foreign experts” in Vietnam, it must submit an explanation for
      the demand in which the positions cannot be satisfied by domestic workers to
      the Provincial People’s committee. The Labor committee also exempts work
      permits for intra-company workers transfer in 11 service areas in compliance to
      WTO’s commitments.
      Circular 40/2016/TT-BLDTBXH:

      		 allows foreign workers to move to
      different provinces without having to apply for new work permits. The new law
      only requires workers of foreign origin to give a written notification to the labor
      authority of the province. However, a change in the workers’ occupations
      requires a new work permit, which can reach a maximum term of 2 years.
      State-owned-enterprises:

      		 SOEs equitization has been a key point for
      development of Vietnam. Vietnam hopes to turn most of SOEs into joint-stock
      companies, aside from sensitive sectors such as national defense, air traffic, oil
      exploration and some key industrial and mining subsectors. The improvement in
      handling SOEs is expected to improve Vietnam’s budget deficits and avoid
      overspending and bad management, which will help Vietnam to realize its
      potential growth.
      Law on Support for Small- and Medium-sized Enterprises

      		 SMEs are micro-
      enterprises and small- and medium-sized enterprises with the average number of
      employees with social insurance being less than 200 per year. Also, these
      enterprises must meet one of the following two criteria, including the total

      investment capital not exceeding VND100 billion (US$4.4 million) and the total
      revenue of the previous year not exceeding VND 300 billion; or the enterprises
      must be as defined in the fields of agriculture, forestry, fisheries, and industry
      and construction, as well as trade and services. The law requires that the support
      for SMEs must respect the market rule and fall in line with international treaties
      of which Viet Nam is a member.
      2018

      		 Investment Regime or Business Environment

      		 Business Environment

      		 On May15, 2018, the Government issued the Resolution number 19 /2018/NQ-CP about ongoing implementation of major duties and measures to improve business environment and enhance national competitiveness in 2018 and subsequent years. This is the four consecutive years; the Government issued the Resolution on business environment improvement.
      The main targets and indices of improvement of business environment and enhancement of national competiveness in the Resolution number 19/2018/NQ-CP. There are some targets as below:
      1. Try to come close to World Bank’s environment business index and World Economic Forum’s competitiveness index, World Intellectual Property Organization’s innovation index and United Nations’ E-Government index. Show great determination to accomplish objectives specified in the Resolution No. 19-2016/NQ-CP and No. 19-2017/NQ-CP on improvement of business environment and promotion of national competitiveness; by 2020, the quality of business environment in Vietnam is the same as the average level achieved by ASEAN-4 countries.
      2. Focus on improving business environment indices in order to, in 2018, rise from 8th – 18th place in the World Bank’s ranking; in particular, robustly improve the ranks of indices currently holding low place. Specifically including:
      a) The business startup rises by at least 40 places.
      b) The contractual dispute handling index rises by 10 places; the corporate bankruptcy handling index rises by 10 places.
      3. Complete elimination and simplification of 50% of investment and business conditions; request elimination of business sectors and industries subject to prescribed conditions in the classification list of business sectors and industries subject to prescribed conditions as specified in the Law on Investment.
      4. Cut down on at least 50% of the list of commodities and products subject to specialized inspections; robustly change the state management approach from mainly pre-inspection to mainly post-inspection; completely eradicate the situation in which a commodity is subject to specialized management and inspection carried out by more than one regulatory authority; reduce the rate of imported shipment subject to specialized inspection carried out at the customs clearance checkpoint from 25 – 27% as currently reported to under 10%.
      5. Facilitate application of information technology to deal with administrative procedures and provide public services online. By the end of 2018, most of the public services which are common and related to people and enterprises are provided at the 3rd and 4th level.
      6. Promote the tourism industry’s competitiveness in order to develop it into the key industry; enhance competitiveness of the logistics service industry to facilitate and reduce costs of business operations and serve the purpose of changing economic structure. Specifically including:
      a) Raise the rank of the tourism industry’s competitiveness by about 10 places (currently holding 67th place out of 136 countries).
      b) Step-by-step reduce logistics costs arising in the national economy to approximately 18% of GDP (currently more than 20% of GDP); raise the logistics efficiency index by roughly 10 places in rank (currently holding 64th place out of 160 countries).
      After 4 years of implementation of the Government’s Resolution No. 19, our country’s business environment and competitiveness has incessantly improved. In 2017, in general, ministries, sectoral administrations and local authorities took more proactive and drastic approaches to implementing measures for improving business environment and enhance competitiveness, and achieved positive results; the country’s national competitiveness index rose in ranking by five places compared to year 2016 (from 60th/138 economies to 55th/137 economies);  country’s business environment index rose in ranking by fourteen places (from 82nd place to 68th place out of 190 economies); country’s innovation and creativity index rose in ranking by twelve places and was ranked 47th place out of 127 economies. Those are the ranks that Vietnam has ever attained till date.
      Assessment of international organizations/Banks about Viet Nam investment environment

      		 Moody’s Investors Service upgraded the Government of Viet Nam’s long-term issuer and senior unsecured ratings to Ba3 from B1 and changed the outlook to stable from positive. The upgrade to Ba3 is underpinned by strong growth potential, supported by increasingly efficient use of labor and capital in the economy.
      Viet Nam ranked 45th out of 126 economies in the Global Innovation Index (Gil) 2018 report conducted by the World Intellectual Property Organisation, up two places compared to 2017 and 14 positions over 2016.
      The European Chamber of Commerce in Vietnam (EuroCham) released the results of its Business Climate Index for 2018’s first quarter. Almost 90 per cent of respondents said they are either maintaining or increasing their investment in the country. 45 per cent of EuroCham members intend to maintain their level of investment in Vietnam, up 9 percentage points from last year’s fourth quarter.
      Policy, Regulatory or Institutional Reforms

      		 the Decree number 100/2018/ND-CP

      		 The Government issued the Decree number 100/2018/ND-CP dated July 16, 2018 amending and annulling some regulation on necessary business conditions in fields under the management of the Ministry of Construction of Viet Nam. With this Decree, Viet Nam expects to simplify 85 per cent out of the 215 business and investment conditions, and to eliminate five among the 17 conditional business lines.
      2019

      		 Investment Regime or Business Environment

      		 Business Environment

      		 On 01/01/2019, the Government issued the Resolution number 02/NQ-CP about ongoing implementation of major duties and measures to improve business environment and enhance national competitiveness by 2019 and vision to 2021. This is the fifth consecutive years the Government issued the Resolution on business environment improvement.
      The main targets and indices of improvement of business environment and enhancement of national competiveness as below:
      Improve the nation's rank in the international ranking charts of WB, WEF, WIPO and UN on business environment and national competitiveness, ect., in order to adapt to the new production of the 4.0 industrial revolution. Strongly improve the business environment and rapidly increase the quantity of newly established enterprises; reduce the rate of enterprises being dissolved and suspended; reduce the input costs, opportunity costs and informal costs for enterprises and citizens; and effectively implement the Resolution of the Government on social-economic development. Strive to make the nation's business environment and competitiveness achieve the rank of top 4 leading countries in ASEAN region.
      a. Raise the rank of Business Environment Index (EoDB of WB) by 15 to 20 places; and by 5 to 7 places in 2019.
      b. Raise the rank of the Global Competitiveness Index (GCI 4.0 of WEF) by 5 to 10 places; and by 3 to 5 places in 2019.
      c. Raise the rank of Global Innovation Index (GII of WIPO) by 5 to 7 places; and by 2 to 3 places in 2019.
      d. Raise the rank of Logistics Efficiency Index (of WB) by 5 to 10 places.
      dd. Raise the rank of Travel and Tourism Competitiveness Index (of WEF) by 10 to 15 places; and by 7 to 10 places in 2019.
      e. Raise the rank of E-Government Development Index (of UN) by 10 to 15 places in 2020.
      Assessment of international organizations/Banks about Viet Nam investment environment

      		 Standard &Poor’s (S&P) Global Ratings has raised Vietnam’s sovereign rating to ‘BB’ from ‘BB-’ with a stable outlook. The upgrade is a reflection of the Vietnamese economy's rapid expansion and improvements in the government's "institutional settings".
      Moody's credit rating for Vietnam was last set at Ba3 with stable outlook. Fitch's credit rating for Vietnam was last reported at BB with positive outlook.
      Vietnam has risen three places to rank 42th out of the 129 nations and economies in the Global Innovation Index 2019 (GII 2019). Accordingly, Vietnam is ranked the first in the group of 26 low-to-average-income nations and the third in ASEAN, preceded by Singapore and Malaysia. This is a 17-spot increase compared to 2016. This shows the great efforts of all ministries, state units, and industries in the task of preparing and implementing synchronous practical solutions to improve the national business environment in order to boost competitiveness as well as innovation capability of the country.
      Policy, Regulatory or Institutional Reforms

      		 Law on Investment and Law on Enterprise

      		 Law on Investment and Law on Enterprise are in the process of being reviewed and will expectedly be submitted to the Government in Q4 for amendment next year.
      2020

      		 Overall Economic Policy Framework

      		 Gross domestic product (GDP) in the first six months of 2020

      		 GDP in the first six months of 2020 was estimated to increase by 1.81% over the same period last year, the lowest six-month growth rate in the period of 2011-2020[1] (the second quarter of 2020 recorded the estimated rise of 0.36%[2]). In the 1.81% growth rate of the whole economy in the first half of 2020, the sector of agriculture, forestry and fishery expanded by 1.19%, contributing 11.89% to the overall growth; the sector of industry and construction rose by 2.98%, contributing 73.14%; and the service sector climbed by 0.57%, contributing 14.97%. The driving force of economic growth in the first six months of the year was the manufacturing with an increase of 4.96% and the market services (Wholesale and retail saw a rise of 4.3%; financial, banking and insurance activities showed an expansion of 6.78%).
      Regarding the economic structure in the first quarter of 2020, the sector of agriculture, forestry and fishery accounted for 14.16% of GDP; the sector of industry and construction took 33.44%; the service sector represented 42.04%; the taxes less subsidies on production made up 10.36% (corresponding structure in the same period of 2019 was 13.54%; 34.20%; 42.03%; 10.23%, respectively).
      According to the GDP structure by expenditure category in the first half of 2020, final consumption jumped up by 0.69% compared to that in the same period in 2019; accumulated assets moved up by 1.93%; export of goods and services suffered a drop of 0.31%; import of goods and services recorded an 2.54% decrease.
      Foreign Investment in the first 7 months of 2020

      		 As of July, 2020, the total value of newly registered capital, adjusted capital and capital contribution or share purchase by foreign investors reached USD 18.82 billion, equaling 93.1% as compared to the same period in 2019. Implemented capital was estimated at USD 10.12 billion, equaling 95.9% as compared to the same period in 2019.
      Accumulated as of July, 2020, the whole country has 32,391 valid projects with total registered capital of USD 380.6 billion. The accumulated realized capital of FDI projects was estimated at USD 221.87 billion, equaling 58.3% of the total valid registered investment capital.
      By sector:
      Foreign investors have invested in 18 sectors, of which the processing and manufacturing led with total investment capital of over USD 8.96 billion, accounting for 47.6% of the total registered investment capital. Electricity production and distribution ranked second with investment capital of USD 3.95 billion, accounting for 21% of total registered investment capital. This is followed by real estate business, retail and wholesale sector with the total registered capital of USD 2.8 billion and nearly USD 1.1 billion respectively. The rest are other sectors.
      Policy, Regulatory or Institutional Reforms

      		 Law on Investment 2020

      		 The National Assembly of Vietnam enacted the Law on Investment 2020 on June 17, 2020 and it will come into force on 01 January 2021. The Investment Law 2020 was enacted with the overall goal of continuing to create a favorable, transparent, fair, safe, and friendly investment and business environment for all citizens and businesses while improving effectiveness and efficiency of state management of business investment activities.
      The Law has 07 Chapters, 77 Articles and 4 Annexes, including the following principal contents:
      The application principle of the Investment Law and related laws

      Article 4 of the Law clearly defines the scope of regulation, the principle of application of the Investment Law and the Laws related to business investment activities to ensure the consistency and uniformity of the legal system.
      Moreover, this Law has amended and supplemented 10 regulations groups in the 2014 Investment Law to ensure consistency with the Laws on land and taxes, and amended 06 other Laws to synchronize with the Law on Investment 2020 includes Law on Environmental Protection, Law on Housing, Law on Real Estate Trading, Law on Corporate Income Tax, and Law on Cinema.
      On branches and trades banned from business investment and sectors and trades subject to conditional business investment

      To further institutionalize the Constitutional Principle on ensuring the right of business freedom of people and enterprises in industries and trades not prohibited by law, and at the same time contributing to eliminating barriers in investment and business activities, this Law provides the following provisions:
      - Add "debt collection service business" to the list of industries and sectors banned from business investment.
      - Amend and supplement regulations in Annex I, II and III on banning investment and trading in narcotic substances; toxic chemicals and minerals; and wild plants and animals to suit the actual situation and State management requirements in accordance with relevant laws and international treaties.
      - Continue to cut some business lines with unnecessary and unreasonable conditions, obstructing the market entry process of people and enterprises (including 22 industries and trades defined in Annex IV).
      - The law stipulates that the Government will publish the list of industries and sectors with limited access to the market (in the guiding Decree), including industries and sectors that have not yet been able to access the market and industries and sectors subject to conditional market access.
      Regarding preferential policies and investment incentives (Articles 15 to 20):


      This Law has amended and supplemented investment incentive industries and sectors in order to ensure consistency in implementing investment incentive and support policies in accordance with the Investment Law, the Tax Laws and Relevant laws; detail:
      - Supplementing regulations to encourage research and development activities; manufacturing and trading products formed from scientific research results; innovation activities; production of goods or provision of services that create or join industry value chains and clusters; environmental industry development.
      - Supplementing provisions on principles, conditions for application of investment incentive policies to ensure the quality and effectiveness of the implementation of this policy (such as: application of incentives for a definite term, according to implementation results); the investor must meet the incentive conditions during the incentive period as prescribed by law).
      - Supplement regulations that allow the Government to apply special incentives to create mechanisms and policies that are attractive FDI capital (allowing the application of incentives up to 50% more than the highest level prescribed of the applicable law).
      Regarding procedures for approving investment policies and implementing investment projects:

      The Law provides the following provisions in order to reform administrative procedures and reduce unnecessary expenses in investment and business activities:
      - Clearly defining principles, conditions for applying each form of selecting investors to implement projects using land, including: (i) auction of land use rights; (ii) bidding for selecting investors; (iii) approval of investors and investment under the Investment Law (Article 29).
      - Consistently apply investment policy on approval procedures in accordance with the Law on Investment to housing and urban construction projects to avoid duplication of authority and procedures for investment decision/approval housing and urban projects according to the law on investment and the law on housing and urban areas (point g Paragraph 1 Article 31 and Point b Paragraph 1 Article 32).
      - Abolish provision on the Prime Minister's investment approval for projects valued more than VND 5,000 billion.
      - Decentralize to the provincial People's Committee the authority of investment approval of golf course investment (point c Paragraph 1 Article 32).
      - Expand the investor's right in the process of project implementation (such as the right to divide, separate, merge, transfer, and adjust the project...).
      - Adjust cases where foreign investors must register to contribute capital, purchase shares or buy capital contributions of enterprises (Paragraph 2 Article 26).
      In addition, the Law has supplemented the regulations on assigning the Government to specify new forms of investment in order to adapt to new models of business organizations that are developing rapidly under the impact of the 4th Industrial Revolution.
      Regarding state management and ensuring security and defense:

      The law has completed and supplemented necessary provisions to improve the effectiveness and efficiency of State management and ensure national security, including:
      - Considering national security conditions in case foreign investors involved in establishing enterprises, contributing capital, buying shares, buying capital contributions at enterprises in islands, coastal areas or areas sensitive to national security (Paragraph 2 Article 24, Paragraph 3 Article 47).
      - Supplementing regulations on inspection of investment capital to limit price transfer and tax evasion (Article 45).
      - Adding the provision on not to extend the duration of operation for projects using outdated technology, potentially causing environmental pollution, resource-intensive projects and projects subject to transfer without compensation refund (Paragraph 4 Article 44).
      Law on Enterprises 2020

      		 1. Viewpoint, objective and requirement for drafting Law on Enterprises 2020:
      The overall objective is to complete the legal framework of organizing corporate governance to reach the standards of good and popular practices regionally and internationally; promote to develop enterprises, attract capital and resources into production and business; contribute to improve the quality of the business environment according to the goals set by the Government in the group of ASEAN 4 countries.
      Specific goals include:
      - Creating the most favorable conditions for business establishment and registration; cutting cost and time in starting-up a business; contributing to improve the ranking of the business start-up index to at least 25 levels (according to the World Bank's ranking).
      - Improving mechanism to effectively protect legal rights and interests of investors, shareholders and members of the enterprise; to promote corporate governance to achieve standards of good and common practice in the region and international; to raise rate of investor protection index to at least 20 levels (according to the World Bank’s ranking).
      - Improving governance effectiveness, openness, transparency and accountability for businesses which the country has a dominant capital share.
      - To facilitate, reduce cost in business re-organization: merger, consolidation, division, split, and business type transformation.
      The Law on Public-Private Partnership Investment 2020

      		 Viewpoint, objective and necessity to promulgate the Law on Public-Private Partnership Investment (PPP Law):
      Firstly, the enactment of a separate law to ensure the specificity of PPP investment to create a more stable legal environment for businesses, avoiding the "borrowing" situation from provisions of other laws. Previously, detailed regulations for PPP activities were only at the decree level, is governed by many different Laws such as the State Budget Law, Investment Law, Public Investment Law, Environmental Protection Law, Enterprises Law, Land Law, Construction Law, Public Debt Management Law... The legal framework at the decree level will be unstable, continuously adjusted, causing many disadvantages for both the state and enterprises when implementing PPP projects with large-scale and long-term investment.
      Secondly, building a more effective and stable legal framework helps to avoid risks for investors in case of policy changes. PPP project contracts often last from 20 - 30 years. Investors as well as lenders often require the sustainability of the legal regulations governing contracts. The promulgated PPP Law is the basis for the improvement of the investment environment and sustainable and long-term infrastructure development.
      Thirdly, the PPP Law completes overall mechanisms including forms of support, incentives and guarantees for investment from the State to investors to increase the attractiveness of projects, to attract strong investment as well as ensuring a successful project implementation. This is a key policy of the PPP Law, which is interested and appreciated by many investors and international organizations as a step forward in the policy of attracting investment through PPP in Vietnam.
      PPP Law with inheritance of good and ongoing regulations; at the same time, adding new and important contents to ensure the specificity of PPP investment , creating a more stable legal environment for PPP projects in the next time.
      The basic contents of Law on Public-Private Partnership Investment (PPP Law)

      		 Investment sector, the PPP Law distinctive 5 essential fields for investment under PPP mode to concentrate resources, specifically include: (1) Transportation; (2) Power grids, power plants (except for hydroelectric plants and which the State monopoly under the provisions of the Electricity Law); (3) Irrigation, clean water supply, drainage, wastewater treatment, waste; (4) Health, education - training; (5) Information technology infrastructure.
      Investment scale, PPP Law stimulates the minimum total investment size under PPP mode is 200 billion. For some projects in difficult socio - economic conditions and particularly difficult areas, or in the field of health, education - training, this value is 100 billion.
      The classification of PPP projects and the competence to decide investment policy, the Law stipulates the classification of projects associated with the competence to decide investment policy, include the National Assembly; Prime Minister; Ministers, Heads of Central Agencies, Other Agencies and Provincial People's Councils. The competent level to decide investment policy is the level that decides to adjust investment policy.
      PPP Project Appraisal Council, PPP Law regulates PPP Project Appraisal Council include: (1) the State Appraisal Council; (2) Interdisciplinary Appraisal Council; (3) Grassroots Appraisal Council.
      State capital in PPP projects, the Law specifies the purpose of using, the method of state capital management in PPP projects. In which, the state capital used to support the construction of works, the infrastructure system and site clearance, the participation limit in a PPP project does not exceed 50% of the total investment level and is managed, used under 2 modes: (1) To split into sub-projects in PPP projects; (2) To arrange to specific items according to the rate and value, progress and condition specified in the contract.
      Investor Selection, regulation on investor selection of PPP projects for the first time has integrated in a legal document on PPP, to ensure consistency, integrity and continuity of the implementation process of a PPP project; at the same time, narrowing the case of appointing investors compared to the current regulations in the Law on Bidding 2013.
      The mechanism for sharing the increase and decrease revenue, the Law stipulates that the sharing mechanism is applicable to all PPP projects with a fixed rate of 50% -50% for both parties and on the basis of periodic control over annual revenue. The sharing of revenue reduction when the actual revenue only reaches 75% of the revenue in the financial plan that is only applied when all prices adjusted measures , fees for public products, services or contract term have been taken fully and must be audited by the State Audit of the revenue reduction.
      To supremacy capital from the project enterprises, besides the traditional capital mobilization channel from bank’s credit capital, the PPP Law allows PPP project enterprises to issue corporate bonds to mobilize capital for PPP project implementation.
      The State Audit for PPP projects, the Law specifies the scope, content of the State Audit to audit PPP projects, including the management and using of public finance and assets in PPP projects.
      BT projects, the institutional PPP Law advocates to stop implementing BT projects in the coming period. Accordingly, the transitional regulations for ongoing projects are specified in the Law. Especially, from August 15, 2020, BT projects that have not been approved investment policy must stop implementing.
      2021

      		 Overall Economic Policy Framework

      		 Gross domestic product (GDP) in the first six months of 2021

      		 GDP growth rate in the first six months of 2021 reached 5,64%, increased by 1.82% over the same period last year but lower than the growth rate of 7.05% and 6.77% of the same period in 2018 and 2019. In the general growth of the whole economy, the agriculture, forestry and fishery sector increased by 3.82%, contributing 8.17% to the overall growth; the industry and construction sector rose by 8.36%, contributing 59.05% and the service sector climbed by 3.96%, contributing 32.78%. The driving force of economic growth in the first six months of the year was manufacturing with an increase of 11.42% and the financial services grew positively (financial, banking and insurance activities showed an expansion of 9.27%).
      Regarding the structure of the economy in the first 6 months of 2021, the agriculture, forestry and fishery sector accounts for 12.15%; industry and construction accounted for 37.61%; service sector accounted for 41.13%; taxes less product subsidies accounted for 9.11%.
      According to the GDP structure by expenditure category in the first 6 months of 2021, final consumption increased by 3.56% over the same period in 2020; accumulated assets increased by 5.67%; exports of goods and services increased by 24.05%; imports of goods and services increased by 22.76%.
      Foreign Investment in the first 6 months of 2021

      		 As of June 2021, the total value of newly registered capital, adjusted capital and capital contribution or share purchase by foreign investors reached USD 15.27 billion, equaling 97.4% as compared to the same period in 2020. Implemented capital was estimated at USD 9.24 billion, increased by 6.8% over the same period in 2020.
      Accumulated as June 2021, Vietnam has 33,787 valid projects with total registered capital of USD 397.89 billion. The accumulated realized capital of FDI projects was estimated at USD 241.1 billion, equaling 60.6% of the total valid registered investment capital.
      By sector:
      Foreign investors have invested in 18 sectors, of which processing and manufacturing led with total investment capital of over USD 6.98 billion, accounting for 45.7% of the total registered investment capital. Electricity production and distribution ranked second with investment capital of USD 5.34 billion, accounting for 35% of total registered investment capital. This is followed by real estate business, retail and wholesale sector with the total registered capital of USD 1.15 billion and nearly USD 476 million respectively. The rest are other sectors.
      By counterpart:
      80 countries and territories are investing in Vietnam in the first 6 months of 2021. Investment in the number of major partners such as Singapore, Japan, and South Korea all increased over the same period. Singapore led with a total investment of USD 5.64 billion, accounting for 36.9 % of total investment in Vietnam, increased by 3.6% over the same period last year; Japan ranked second with a total investment of 2.44 billion USD, accounting for nearly 16% of total investment capital and up 66.8% over the same period. The investment capital of Singapore and Japan is mainly in the form of new investment, accounting for 84% and 67.8% of the total registered capital of these two countries, respectively. Korea ranked third with a total registered investment capital of 2.05 billion USD, accounting for 13.4% of total investment capital, up 43.6% over the same period. Followed by China, Hong Kong, Taiwan,
      Import and export performance

      		 Export: Export turnover of the foreign investment sector continued to increase strongly in the first 6 months of the year. Exports including crude oil were estimated at over USD 116 billion, up 32.2% over the same period, accounting for 74.1% of export turnover. Exports excluding crude oil were estimated at USD 115.3 billion, up 32.6% over the same period, accounting for 73.6% of the export turnover of Vietnam.
      Import: Import of the foreign investment sector was estimated at over USD 102.6 billion, up 38.7% over the same period and accounting for 64.9% of import turnover of the whole country.
      Generally, in the first 6 months of 2021, the foreign investment sector had a trade surplus of USD 13.4 billion including crude oil and a trade surplus of nearly 12.7 billion USD excluding crude oil. Meanwhile, the domestic business sector had a trade deficit of USD 14.9 billion.
      Investment Regime or Business Environment

      		 Cost-cutting for businesses affected by COVID-19
      - The Government has issued Decree No. 52/2021/ND-CP dated April 19, 2021, on extending the deadline for payment of value-added tax, corporate income tax, personal income tax and land rent in 2021. This is the third time the Government has extended tax and land rent to support businesses facing difficulties due to the epidemic.
      - In February 2021, the Ministry of Finance issued Circular No. 12/2021/TT-BTC stipulating the rate of collection, declaration and payment of fees for using railway infrastructure, reducing 50% of fees for using infrastructure railway compared to the current in order to support those affected by the COVID-19 epidemic.
      - The State Bank has directed credit institutions to implement online payment service fee exemption and reduction programs to meet the demand for online payment and support people and businesses in the context of the pandemic. COVID-19.
      - Some localities implement programs to support digital signatures and e-invoices for newly established businesses in 2021.
      - On July 1, 2021, the Government issued Resolution 68/NQ-CP on a number of policies to support employees and employers facing difficulties due to the COVID-19 pandemic.
      Promoting Cashless payment
       In order to promote non-cash payment activities, on March 9, 2021, the Prime Minister issued Decision No. 316/QD-TTg on approving the pilot implementation of using telecommunications accounts to pay for goods and services with low prices.
      - In order to implement Decision No. 316/QD-TTg, Ministry of Information and Communications, State Bank of Vietnam, and Ministry of Public Security have developed and issued Regulation No. 01/QCPH-NHNN-BTTTT-BCA dated April 20, 2021 on coordinated regulations among these three agencies on management of the pilot implementation of Mobile-Money service.
      Reforming administrative procedures and implementing online public service delivery
      - On March 27, 2021, the Prime Minister issued Decision No. 468/QD-TTg approving the Scheme on renewal of the implementation of the one-stop-shop mechanism in handling administrative procedures.
      - In the first 6 months of 2021, Government Office has been actively advised the Government on reduction and simplification of regulations related to business activities according to Resolution No. 68/NQ-CP dated May 12, 2020.
      - Currently, the National Public Service Portal has provided 2,890 online public services from 19 ministries, ministerial-level agencies, Vietnam Social Insurance and Vietnam Electricity. In the first 6 months of 2021, 390 more online public services at level 3 and 4 deployed on the National Public Service Portal.
      Policy, Regulatory or Institutional Reforms

      		 Decree 31/2021/ND-CP dated March 26, 2021, on detailing and guiding the implementation of a number of articles of the Law on Investment

      		 On January 1, 2021, Law on Investment No. 61/2020/QH14 was into effected the National Assembly with intensive reforms towards (i) creating an open mechanism, overcoming bottlenecks in investment and business activities; (ii) strengthening local decentralization; (iii) transparency, diversification of investment forms; (iv) additional investment incentives, special investment support. Following the Law on Investment, the Government issued Decree No.31/2021/ND-CP on detailing and guiding the implementation of a number of articles of the Law on Investment.
      Decree No.31/2021/ND-CP has 9 Chapters, 131 Articles, and 03 Appendixes with some key features as follows:
      1. Transition of the Positive List to the Negative List
      Decree No.31/2021/ND-CP announce the Negative List in Annex 1. The Negative List includes two sub-categories: (A) List of industries that have not been accessibly marketed for foreign investors: 25 industries and (B) List of industries with conditional market access for foreign investors: including 59 industries. At the same time, Decree No.31/2021/ND-CP also specifies principles in market access for foreign investors.
      The Negative List has contributed to improving the transparency and efficiency of foreign investors' access to the market, and at the same time, overcoming the inconsistency in market access commitments of Vietnam in various international agreements.
      2. List of industries eligible for investment incentives and List of geographical areas eligible for investment incentives
      Decree No.31/2021/ND-CP continues to announce (i) List of industries eligible for investment incentives and (ii) List of geographical areas eligible for investment incentives.
      While the List of geographical areas with investment incentives remains unchanged, the List of industries with investment incentives has been added a number of new industries towards high-tech development and environmental protection, falling under two categories:
      (i) Industries with special investment incentives: including 4 sectors, 32 industries, in which a number of new industries have been supplemented such as: research and production of biotechnological products used as food; producing wooden products; production of artificial boards, including: plywood, jointed boards, MDF board; development, operation and management of technical infrastructure works for industrial clusters; utilization of waste heat to generate electricity from facilities producing construction material, in order to save energy and protect the environment...; and
      Industries eligible for investment incentives: including 5 sectors, 67 industries, including a number of new industries: production of light unburnt building materials; investment in treatment and utilization of waste from thermal power plants electricity, production of environmentally friendly transports, etc.;
      3. Adding conditions for beneficiaries of investment incentives
      Investment projects, which employ a number of disabled employees equal to 30% or more of the annual average regular employees, are eligible for investment incentives.
      For product distribution chains of small and medium-sized enterprises, they are eligible for investment incentives when meeting the following conditions:
      - At least 80% of participating enterprises are small and medium enterprises;
      - Having at least 10 locations to distribute goods to consumers;
      - At least 50% of the chain's revenue is generated by the small and medium enterprises participating in the chain.
      4. Investment in innovation sector
      Add regulations on creating benefits for foreign investors in setting up innovation SMEs, or capital contributions, share purchases to these enterprises. Foreign investors merely carry out procedures as prescribed for domestic investors according to the provisions of the Law on Enterprises without having to carry out procedures to apply for an Investment Registration Certificate or register for capital contributions, in case they meet one of certain conditions of an innovative start-up.
      5. Online investment procedures
      For investment projects that are not subject to the approval of investment policies, investors are able to submit applications and/or make adjustments of the Investment Registration Certificate by online forms published on the National Information System on Investment with registered accounts or digital signatures. This regulation will facilitate the implementation of investment procedures, as well as save time and costs for foreign investors, thereby, in general, contributing to improving investment environment.
      6. Investment Promotion
      The previous governed regulations on investment promotion were stipulated in the Decisions of the Prime Minister. Decree No.31/2021/ND-CP has upgraded and supplemented regulations related to investment promotion towards enhancing the effectiveness of governed regulations of investment promotion activities. In which, specifically stipulates on (i) contents of investment promotion activities; (ii) methods of investment promotion; (iii) coordinating investment promotion programs (iii) developing national, ministerial and local investment promotion programs; (iv) improving association between investment promotion and trade promotion, tourism and economic diplomacy.
      7. Amendment of 08 Decrees related to business investment
      Decree No. 31/2021/ND-CP amended and supplemented 08 Decrees related to business, investment, including:
      - Decree 46/2014/ND-CP on collection of land rent and water surface rent;
      - Decree 52/2020/ND-CP on investment in construction and business of golf courses;
      - Decree 25/2020/ND-CP guiding the Bidding Law on contractor selection;
      - Decree 96/2016/ND-CP stipulating security and order conditions for a number of conditional investment and business lines;
      - Decree 82/2018/ND-CP on management of industrial parks and economic zones;
      - Decree No. 11/2013/ND-CP on urban development investment management;
      - Decree 99/2003/ND-CP promulgating regulations on high-tech zones;
      - Decree 94/2020/ND-CP stipulating preferential mechanisms and policies for the National Innovation Center.
      Decree No. 35/2021/ND-CP of March 29, 2021

      		 The Law on Public-Private Partnership Investment (PPP Law) which was enacted by the 14th National Assembly at the 9th session, has been effective from January 1, 2021. The Law is expected to create a common, highly effective, long-term and stable legal framework for the implementation of PPP projects in Vietnam. For detailed guidance and to ensure flexibility in operation, according to the provisions of the Law, the Government issued Decree No.35/2021/ND-CP dated March 29, 2021, on detailing and guiding the implementation of the PPP Law.
      Decree No.35/2021/ND-CP comprises 08 Chapters, 93 Articles and 06 Appendixes, including some notable new points as follows:
      1. Field and scale of investment
      Define the scale of the minimum total investment for a number of technical infrastructure fields (hard infrastructure) such as traffic, energy; social infrastructure (soft infrastructure) such as health care, education, information technology.
      2. Investor interest survey
      In addition to the objective of surveying the technical requirements as well as the feasibility and attractiveness of the project, the results of the survey of investor's interest are the basis for the competent authorities to determine the form of investor selection (domestic or international, pre-qualification or non-pre-qualification). The survey is carried out entirely on the National Bidding Network System.
      3. New modality of investor selection - Competitive negotiation
      Stipulate the steps of implementing this new modality and apply to 02 groups: (i) the project has no more than 03 investors meeting the requirements of project implementation invited to attend; (ii) high-tech applied projects prioritized for investments in accordance with the regulations on high technology and projects applying new technologies in accordance with the regulations on technology transfer.
      4. Transition for BT project
      Amend and supplement a number of articles of Decree No.69/2019/ND-CP and simultaneously, add regulations on the use of public property to pay for BT projects eligible for transition under the Law.
      5. Appendix detailing the implementation of a PPP project
      In order to create favourable conditions for enforcement agencies, the Decree has 06 Appendixes of detailed guidances on implementing a PPP project including: guidances on assessment planning; the form of reports; guidance on survey of investor interest; guidance on the form of PPP projects contract.
      2022

      		 Policy, Regulatory or Institutional Reforms

      		 Decision 29/2021/QD-TTg dated 06/10/2021

      		 stipulates the level, time and conditions for applying special investment incentives to investment projects specified in Clause 2, Article 20 of the Law on Investment 2020.
      Clause 2, Article 20 of the Law on Investment 2020 stipulates that subjects to apply special investment incentives and support include:
      (i) New investment projects (including the expansion of such newly established projects) of innovation centers, R&D centers with a total investment capital of at least 3,000 billion VND and disbursing at least 1,000 billion VND within 03 years from the date of issuance of the Investment Registration Certificate or approval of investment policies; national innovation center established under the Prime Minister's decision;
      (ii) Investment projects in industries with special investment incentives with an investment capital of at least 30,000 billion VND, disbursing at least 10,000 billion VND within 3 years from the date of issuance of the Investment Registration Certificate or approval of investment policy.
      Law No.03/2022/QH15 dated 11/01/2022

      		 on amending and supplementing a number of articles of 09 laws including Law on Investment. The Law has 11 articles. Regarding admendment of Law on Investment, Law No.03/2022/QH15 has increased the authority of the Provincial People's Committee in approving investment policies.
      Decision 667/QD-TTg 2022 dated 02/6/2022

      		 on approving Foreign investment cooperation strategy for the period 2021 – 2030. The Decision aims to:
      Attracting foreign investment projects with advanced, new and high technologies of the 4thIR; modern management, and high added value; having positive spillover effect, connecting global production and supply chains;
      Expanding the market, taking advantage of the FDI sector on capital, technology, management; improve the competitiveness of the economy, enterprises and domestic products; promote domestic industries, agriculture and services, establish and strengthen the role of Vietnamese enterprises in the international community;
      Improve the efficiency and comprehensive quality in attracting and using foreign investment capital, increase the contribution rate of the foreign investment sector in socio-economic development, commensurate with the incentives and supports granted;
      Building and developing innovation centers of regional and international stature to create a driving force for socio-economic development in the coming period.
      2023

      		 Policy, Regulatory or Institutional Reforms

      		 Decision 667/QD-TTg 2022 dated 02/6/2022

      		 To ensure the synchronous and effective implementation of solutions in Decision No. 667/QD-TTg dated June 2, 2022 of the Prime Minister approving the Strategy for Foreign Investment Cooperation in the 2021-2030 period, the Ministry Planning and Investment has advised the Prime Minister to issue Decision No. 308/QD-TTg dated March 28, 2023 approving the Action Program to implement the Foreign Investment Cooperation Strategy for the 2021-2030 period with 45 tasks assigned to 15 ministries, branches and provincial People’s Committees. The Decision aims to:
      (i) Attracting foreign investment projects with advanced, new and high technologies of the 4thIR; modern management, and high added value; having positive spillover effect, connecting global production and supply chains;
      (ii) Expanding the market, taking advantage of the FDI sector on capital, technology, management; improve the competitiveness of the economy, enterprises and domestic products; promote domestic industries, agriculture and services, establish and strengthen the role of Vietnamese enterprises in the international community;
      (iii) Improving the efficiency and comprehensive quality in attracting and using foreign investment capital, increase the contribution rate of the foreign investment sector in socio-economic development, commensurate with the incentives and supports granted;
      (iv) Building and developing innovation centers of regional and international stature to create a driving force for socio-economic development in the coming period.
      Directive No.14/CT-TTg dated 24/5/2023

      		 The Ministry of Planning and Investment has advised the Prime Minister to issue Directive No. 14/CT-TTg dated May 24, 2023 on a number of tasks and solutions to improve the efficiency of foreign investment in the new period.
      Accordingly, the Directive will focus on policy-reactive solutions in the context of complicated changes and unpredictable developments in the international situation; is expected to:
      (i) improve the efficiency of foreign investment in the new period to catch the wave of shifting investment;
      (ii) overcome shortcomings and limitations in foreign investment management;
      (iii) remove “bottlenecks” in the process of implementing policies and laws in localities;
      (iv) strengthen linkage and coordination among state management agencies in the process of reviewing, appraising, evaluating and screening foreign investment projects in order to limit.
      FDI Attraction in Science, Technology and Innovation

      		 Vietnam has established the National Innovation Center. Accordingly, NIC has the task of promoting the development of science, technology and innovation, including strengthening cooperation with foreign partners and FDI enterprises. Some goals of cooperation and attracting investment resources that NIC are focusing on are as follows:
      - NIC's innovation ecosystem is in need of investment partners to complete construction items, find suitable partners related to the industries and fields that are the focus of NIC (smart factory, smart cities, digital communication, environmental technology, cybersecurity, green hydrogen technology, semiconductor industry, healthcare), development of R&D, innovation centers, regional spaces at facilities NIC department.

      - Attracting semiconductor businesses, green hydrogen, developing incubators to develop innovative businesses and human resources at the premises of the National Innovation Center.

      - To strengthen foreign investment cooperation, Vietnam is considering cooperation with leading economies such as Japan and Australia to implement initiatives to promote innovation such as: Ecosystem building program Building Ecosystem of Co-Creation between ASEAN - Japan companies, cooperation programs chaired by Australia - ASEAN Council (Australia - ASEAN Council)…
      Many policies and legal corridors have been issued to create conditions for prioritizing investment and development in the fields of high technology with the highest incentives according to provisions of the current law, specifically:
      (1) The Investment Law 2020 and Decree No. 31/2021/ND-CP dated March 26, 2021 of the Government have specified the List of industries and professions eligible for investment incentives, including: (i) High-tech industries are given priority for development investment and hi-tech products are encouraged for development under the Prime Minister's Decision; (ii) High-tech activities, high-tech supporting industrial products, research and development activities, and production of products formed from scientific and technological results in accordance with the law on science and technology. science and technology.

      (2) The forms of investment incentives include: (i) CIT incentives (tax exemption, reduction, preferential tax rates); (ii) import tax exemption; (iii) exemption or reduction of land use fees and land rents; (iv) accelerated depreciation, increasing deductible expenses when calculating taxable income. Specific incentives for each type of investment incentive shall be applied in accordance with the provisions of the law on tax, accounting, and land. Investors determine investment incentives by themselves and carry out procedures for enjoying investment incentives at tax authorities, financial agencies, customs offices and other competent agencies corresponding to each type of investment incentives.

      (3) According to the law on high technology, projects in the field of scientific research and technological development; high-tech applications on the list of high-tech prioritized for development investment; High-tech incubation, high-tech enterprise incubation.

      (4) In order to attract large, high-tech projects with spillover effects and links with domestic enterprises, the Ministry of Planning and Investment has submitted to the Prime Minister for approval a set of criteria for selectively attracting foreign investment. including 07 criteria: investment rate; labor; technology; technology transfer; linkage and spillover effects; environment; defense and security) as a basis for ministries, branches and localities to study, institutionalized in the process of formulating laws and policies (the Prime Minister has agreed and assigned relevant ministries, branches and localities to implement it in Official Dispatch No. 1252/VPCP-QHQT dated February 26, 2022 of the Office of the Government).

      (6) Establish a special working group to review and remove difficulties and obstacles and promote the implementation of investment projects in ministries, branches and localities to proactively approach large corporations with source technology, Leading the value chain, the global supply chain to mobilize and call for investment in Vietnam.
      Attracting foreign investment for the implementation of the National Strategy on Green Growth.

      		 At the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26), Vietnam pledged to bring net emissions to "zero" by 2050. implement a series of specific policies and action plans to fulfill its commitments at COP26.
      In which, attracting resources to realize these goals is extremely important, deciding the ability, method and way of Vietnam in the implementation process.

      The national green growth strategy has also influenced Vietnam's foreign investment attraction policy. Accordingly, Vietnam is actively improving access to green finance, climate finance, and sustainable finance through the development and implementation of solutions to access and mobilize financial resources from established regulations. financial institutions, funds and international private investors.

      In the context that ASEAN is starting to develop ASEAN Sustainable Investment Guidelines. Vietnam wishes to contribute some experience in developing green economy, promoting green growth. At the same time, some solutions and recommendations are given to attract sustainable investment in the ASEAN region, especially in promoting the implementation of sustainable development goals.

       

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