General provisions of Vietnamese law on state management of investment

Business investment activities play an important role in the economic development of each country. Well-implemented state management of investment will create a fair business investment environment for investors and ensure the overall development direction of the country. Vietnamese law already has regulations on state management of investment, which clearly define the responsibilities and authority of management among state agencies but still create the coordination and unity of the state bodies. Let’s join Lawyer X to find out about this issue through the following situation: “Hello, lawyer! I know that business investment activities are always managed and supervised by competent state agencies. I want to better understand how state management of investment is governed by Vietnamese law? Thanks for your advice! “

Legal grounds

2020 Viet Nam Law on Investment

What is state management of investment?

Business investment means the use of investment capital by investors to carry out business activities. Investor means an organization or individual carrying out business investment activities. Investors include domestic investors, foreign investors and foreign-invested economic organizations.

State management on investment can be understood as the operation of the competent state agencies, primarily through legislation, to adjust the objects of management in investment activities in order to ensure the order and efficiency of investment activities.

Responsibility for state management of investment

– The Government shall perform uniform state management of investment in Vietnam and outward investment.

– The Ministry of Planning and Investment shall assist the Government in performing uniform state management of investment in Vietnam and outward investment, and has the following tasks and rights:

+ Request the Government and the Prime Minister to consider approving strategies, plans and policies for investment in Vietnam and outward investment;

+ Promulgate or request competent authorities to promulgate legislative documents on investment in Vietnam and outward investment;

+ Promulgate forms of documents serving procedures for investment in Vietnam and outward investment;

+ Provide instructions, disseminate, organize, supervise, inspect and assess the implementation of legislative documents on investment;

+ Formulate and submit to competent authorities mechanisms for resolving difficulties faced by investors and for preventing disputes between the State and investors;

+ Assess and report developments of investment in Vietnam and outward investment;

+ Build, manage and operate the national investment information system and national investment database;

+ Issue, adjust and invalidate outward investment registration certificates;

+ Perform state management of industrial parks, export-processing zones and economic zones;

+ Perform state management of investment promotion and coordinate investment promotion activities in Vietnam and overseas;

+ Inspect, supervise and assess investment activities, manage and cooperate in managing investment activities within its power;

+ Negotiate and conclude international agreements on investment within its power;

+ Perform other tasks and exercise other rights regarding state management of investment as assigned by the Government and the Prime Minister.

– Ministries, ministerial agencies shall, within their jurisdiction, cooperate with the Ministry of Planning and Investment in performing the task of state management of investment in Vietnam and outward investment. To be specific:

+ Cooperate with the Ministry of Planning and Investment, Ministries and ministerial agencies in formulating laws and policies on investment;

+ Take charge and cooperate with other Ministries and ministerial agencies in formulating laws, policies, standards, technical regulations and instructions;

+ Request the Government to promulgate conditions for making business investment in the business lines mentioned in Article 7 of Law on Investment;

+ Take charge and cooperate with the Ministry of Planning and Investment in formulating planning and plans, and compiling a list of its projects attracting investment; organize campaigns and specialized investment promotion;

+ Participate in appraisal of projects subject to approval for their investment guidelines as prescribed in Law on Investment and take responsibility for the contents of the appraisal within their jurisdiction;

+ Carry out supervision, assessment, and specialized inspection of the fulfillment of investment conditions and state management of investment projects within their power;

+ Take charge and cooperate with People’s Committees of provinces, other Ministries and ministerial agencies in resolving difficulties of investment projects in state management; provide guidance on distribution of powers and authorize management boards of industrial parks, export-processing zones, hi-tech zones, and economic zones to perform state management tasks therein;

+ Carry out periodic assessment of socio – economic effects of investment projects under their management and send reports thereon to the Ministry of Planning and Investment;

+ Provide relevant information to establish a national investment database; maintain and update management information systems under their management and integrate them into the national investment information system.

– Provincial People’s Committees and investment registration authorities shall, within their jurisdiction, perform the task of state management of investment in Vietnam and outward investment. To be specific:

+ Cooperate with Ministries and ministerial agencies in compiling and issuing Lists of local projects attracting investment;

+ Preside over or participate in appraisal of projects subject to approval for their investment guidelines as prescribed in Law on Investment and take responsibility for the contents of the appraisal within their jurisdiction; preside over following procedures for issuance, adjustment and revocation of investment registration certificates;

+ Exercise the function of state management of investment projects within their provinces;

+ Resolve or request competent authorities to resolve difficulties faced by investors;

+ Carry out periodic assessments of efficiency of investment activities and submit reports thereon to the Ministry of Planning and Investment;

+ Provide relevant information to establish a national investment database; maintain and update the national investment information system;

+ Provide instructions on organization, supervision and assessment of implementation of investment reporting regulations.

– Vietnam’s overseas representative missions shall monitor and support investment activities, and protect the lawful rights and interests of Vietnamese investors in the host countries.

Supervision and assessment of investment

– Supervision and assessment of investment activities include:

+ Supervision and assessment of investment projects;

+ Overall investment supervision and assessment.

– Responsibility for supervision and assessment:

+ Investment authorities and specialized authorities conduct overall investment supervision and assessment and supervision and assessment of investment projects under their management;

+ Investment registration authorities shall supervise and assess the investment projects to which they grant investment registration certificates;

– Contents of supervision and assessment of investment projects:

+ With regard to projects funded by state capital, investment authorities and specialized authorities shall carry out supervision and assessment according to the contents and criteria approved in the investment decision;

+ With respect to investment projects funded by other sources of capital, investment authorities and specialized authorities shall supervise and assess the objectives and conformity of the investment projects with planning and investment guidelines approved by competent authorities, the investment schedule, fulfillment of environmental protection requirements, technologies, use of land and other resources as prescribed by law;

+ Investment registration authorities shall assess the adherence to investment registration certificates and written approval for investment guidelines.

– Contents of overall supervision and assessment of investment:

+ Promulgation of legislative documents elaborating and providing guidelines for implementation thereof; implementation of the law on investment;

+ Progress of execution of investment projects;

+ Assessment of investment results nationwide, of Ministries, ministerial agencies, local authorities, and investment projects under their management;

+ Suggest investment assessment results and solutions for resolving difficulties and actions against violations of the law on investment to regulatory agencies at the same level and superior investment authorities.

– Organizations and agencies shall carry out investment assessment themselves or hire capable experts or consultancies to do so.

National investment information system

– The national investment information system consists of:

+ National information system for Domestic Investment;

+ National information system for foreign investment in Vietnam;

+ National information system for outward investment from Vietnam;

+ National information system for investment promotion;

+ National information system for industrial parks and economic zones.

– The Ministry of Planning and Investment shall take charge and cooperate with relevant agencies in developing and operating the national investment information system; establish the national investment database; assess the operation of such system by central and local investment authorities.

– Investment authorities and investors shall sufficiently, promptly and accurately update information on the national investment information system.

– Information about investment projects in the national investment information system is considered original and lawful information.

Reports on investment activities in Vietnam

– Reporting entities:

+ Ministries, ministerial agencies and provincial People’s Committees;

+ Investment registration authorities;

+ Investors and business entities executing investment projects as prescribed in Law on Investment.

– Periodic reports:

+ Investors and business entities executing investment projects shall submit quarterly and annual reports to investment registration authorities and local statistical agencies on the investment project execution, which specify: investment capital, investment results, employees, payment to government budget, investment in R&D, environmental protection, and other professional indicators;

+ Investment shall submit quarterly and annual reports to the Ministry of Planning and Investment and provincial People’s Committees on receipt of applications, issuance, adjustment and revocation of investment registration certificates and the operation of investment projects under their management;

+ Provincial People’s Committees shall submit quarterly and annual consolidated reports on local investment to the Ministry of Planning and Investment;

+ Ministries and ministerial agencies shall submit quarterly and annual reports on issuance, adjustment and revocation of investment registration certificates and equivalent papers (if any) under their management; and on investment activities under their management to the Ministry of Planning and Investment, which submit a consolidated report to the Prime Minister;

+ The Ministry of Planning and Investment shall submit an annual report to the Prime Minister on investment nationwide and adherence to regulations on investment reporting by the entities mentioned in Clause 1 of Article 72 of Law on Investment

– Agencies, investors and business entities shall make reports in writing via the national investment information system.

– Agencies, investors and business entities mentioned in Clause 1 of Article 72 of Law on Investment shall make ad hoc reports at the request of competent authorities.

– If a project is exempt from the investment registration certificate, the investor shall submit a report to the investment registration authority before commencement of the project execution.

Reports on outward investment

– Reporting entities:

+ Ministries and ministerial agencies shall manage outward investment in accordance with law, and agencies representing the state capital in enterprises;

+ Investors executing outward investment projects as prescribed in Law on Investment.

– Regulations on reporting applied to the entities specified in Point a Clause 1 of Article 73 of Law on Investment

+ Such entities shall submit an annual report on management of outward investment within their jurisdiction to the Ministry of Planning and Investment, which will submit consolidated reports to the Prime Minister;

+ The Ministry of Planning and Investment shall submit an annual report on outward investment to the Prime Minister.

– Reporting regulations applied to investors:

+ Within 60 days from the day on which the project is approved or licensed as prescribed by law of the host country, the investor shall send a written notification of outward investment enclosed with a copy of the written approval for the investment project or a document proving the right to make investment in the host country to the Ministry of Planning and Investment, the State Bank of Vietnam, and a representative mission of Vietnam in the host country;

+ Investors shall submit quarterly and annual reports on operation of their investment projects to the Ministry of Planning and Investment, the State Bank of Vietnam, and a representative mission of Vietnam in the host country;

+ Within 06 months from the day on which the tax declaration or an equivalent document is available as prescribed by the host country’s law, the investor shall submit a report on the operation of the investment project enclosed with the financial statement, tax declaration, or an equivalent document prescribed by the host country’s law to the Ministry of Planning and Investment, the State Bank of Vietnam, the Ministry of Finance, a representative mission of Vietnam in the host country, and a competent authority prescribed in Law on Investment and relevant regulations of law;

+ If the outward investment project is funded by the state capital, apart from complying with the regulations in Points a, b and c of Clause 3, Article 73 of Law on Investment, the investor shall make reports in accordance with regulations of law on management and use of state capital invested in manufacturing and business activities of enterprises.

– The reports mentioned above shall be made in writing via the national investment information system.

– The agencies and investors in Clause 1 of Article 73 of Law on Investment shall make ad hoc reports at the request of competent authorities to meet state management requirements or settle issues arising in relation to investment projects.

Investment promotion activities

– The Government shall direct the formulation and organize the implementation of policies and orientations for investment promotion with a view to promoting and facilitating investment activities by sectors and regions and partners in conformity with strategies, planning, plans and objectives for socio-economic development in each period; and ensure implementation of inter-regional and cross-sectoral investment promotion programs and activities in association with trade promotion and tourism promotion.

– The Ministry of Planning and Investment shall formulate and organize the implementation of a national investment promotion plan or program; coordinate inter-regional and inter-provincial investment promotion activities; monitor, supervise and assesses the efficiency of investment promotion nationwide.

– Ministries, ministerial agencies and provincial People’s Committees shall, within their jurisdiction, formulate and organize implementation of investment promotion plans and programs in fields and areas under their management in conformity with strategies, planning and plans for socio-economic development and the national investment promotion program.

– Funding for formulating and organizing the implementation of the investment promotion program shall be covered by the state budget and other lawful sources.

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