Reviewing the implementation of large-scale FDI projects

The Ministry of Planning and Investment has just issued Official Letter No. 3409/BKHDT-ĐTNN dated May 25th, 2022, requesting the People’s Committees of provinces and central cities to direct investment registration agencies to review and evaluate the implementation of foreign investment (FDI) projects in the locality.

Accordingly, the subject of review belongs to FDI projects with registered capital of 100 million USD or more; projects with a land area of 50 hectares or more; projects in the field of real estate business in the following provinces and cities: Hanoi, Ho Chi Minh City, Da Nang, Hai Phong, Khanh Hoa, Ba Ria-Vung Tau with a usable land area of 2 hectares or more.

The Ministry of Planning and Investment requests investment registration agencies to report information related to capital contribution and disbursement; the implementation of the objectives specified in the investment license; investment certificates; investment registration certificate.

The implementation of commitments on the project implementation progress; the land use situation and the observance of the provisions of the law on land and construction; the observance of financial obligations to the state (taxes, fees, land rent, land use levy…; the situation of labor use and the observance of the Labor Law; and the observance of the environmental regulations, ensure environmental protection.

In case there is a delay or failure to fulfill the objectives in the investment license; investment certificates; investment registration certificate or the provisions of law, the Ministry of Planning and Investment requests the investment registration agencies to clearly state the actual situation and reasons.

Along with that, the Ministry of Planning and Investment also asked the People’s Committees of central cities and provinces to direct investment registration agencies to summarize difficulties and problems of foreign-invested projects in the area, thereby proposing solutions to remove difficulties and obstacles as well as proposing amendments to laws and policies to promote project implementation.

Accordingly, localities focus on 2 groups of projects.

Firstly, the project team encountered difficulties and obstacles in the process of implementing investment, such as implementing policies and procedures for investment, businesses, land, construction, labor, and financial obligations.

Second, the project team does not implement or is slow to implement, does not follow the committed schedule.

In Vietnam, due to the impact of the Covid-19 pandemic, some factories temporarily stopped or reduced capacity. However, the number of foreign direct investment (FDI) projects with a scale of over 50 million USD still maintained a strong increase.

Resolution 50-NQ/TW (August 20, 2019) of the Politburo sets out targets to attract FDI in the period 2021-2025 with a registered capital of 150-200 billion USD, implemented capital of 100-150 billion USD; respectively in the 2026-2030 period is 200-300 billion USD and 150-200 billion USD.

In terms of quality, the proportion of enterprises using advanced technology, modern management, environmental protection, aiming for high technology strives to increase by 50%, the proportion of trained workers increases by 70%, localization to increase 30% by 2025 and 100% respectively; 80% and 40% by 2030 (compared to 2018).

In addition, the Party and State advocate attracting FDI into the green economy as well as the transfer of green technology (in the National Strategy on Green Growth).

According to the report, Vietnam is the third largest recipient of FDI in the region and is one of the ASEAN countries that has maintained stable FDI inflow growth over the years. Specifically, in 2021, registered capital will reach 31 billion USD, up 9% and realized capital will reach nearly 20 billion USD, down slightly by 1% compared to 2020. Accumulated to December 20th, 2021, Vietnam has received 408 billion USD with over 35,500 valid FDI projects and disbursed capital reached 251 billion USD, accounting for 62% of total valid registered capital.

According to experts, although the opportunity to receive FDI is great, the competition to attract FDI is increasingly fierce, especially in the context of limited capital supply and the heavy impact of the Covid-19 pandemic. All countries are taking advantage of attracting external resources to maintain and restore the economy. Thus, competition to attract FDI among developing countries with similarities in market, development level, technology and labor is increasingly fierce. Therefore, in the coming time, Vietnam needs to focus on finding measures that can develop service industries in depth; creating a good impetus for increasing the productivity of the service sector as well as the production and business sector and many other sectors of the economy. In addition, Vietnam needs to prepare necessary conditions to attract investment such as reviewing and supplementing the clean land fund; review the electricity planning; training high-quality human resources; supplementing policies to develop supporting industries; develop regulations and standards as a new filter to select FDI investors with advanced technology, able to withstand external pressure for sustainable development and national security.

Source: Bo Cong Thuong Viet Nam