Tom Tat Tieng Anh. Chính Sách Thu Hút Đầu Tư Trực Tiếp Nước Ngoài Ở Việt Nam.doc

supplement high-quality FDI capital flows, promote economic growth and development,associated with the current context of green growth and digital technology revolution.- Analyze and eva

MINISTRY OF

EDUCATION AND TRAINING

HO CHI MINH NATIONAL ACADEMY

OF POLITICS

ACADEMY OF PUBLIC ADMINISTRATION AND GOVERNANCE

NGUYEN XUAN KHOI

POLICIES TO ATTRACT FOREIGN DIRECT

THE PROJECT WAS COMPLETED AT ACADEMY OF PUBLIC ADMINISTRATION AND GOVERNANCE

Supervisors:

1 Associate Professor.Dr Trang Thi Tuyet

2 Associate Professor.Dr Le Xuan Ba

Reviewer 1:………

Reviewer 2:………

Reviewer 3:………

The dissertation will be evaluated by the Examination Council of the

Academy of Public Administration and Governance Location: Doctoral Dissertation Defense Hall room - Meeting room,……Floor, Building……… - Academy of Public Administration and Governance

Time: At…… hour, …… month…….year 2025

The dissertation can be accessed at:

- Academy of Public Administration and Governance Library

- National Library

1 Reasons for choosing the dissertation topic

The 1987 Foreign Investment Law was the first step in attracting foreign directinvestment (FDI) into Vietnam The turning point in attracting FDI in Vietnam wasconsidered to be the time when Vietnam joined the World Trade Organization (WTO) in

2007, because after this time, FDI inflows into Vietnam increased very quickly andstrongly, making Vietnam one of the countries attracting the largest FDI in the region

Besides the results achieved, in reality, there are still many limitations in attracting andabsorbing FDI capital in the Vietnamese economy The limitations in attracting FDI comefrom many causes, but the main reason is that FDI attraction policies in Vietnam are stillinadequate For example: (1) FDI attraction policies are not diverse, mainly depending ontax incentives, land rent exemptions, etc in a spread-out manner, lacking focus, leading toloss of state budget revenue, while not achieving the effectiveness of selecting clean, green,smart, environmentally friendly FDI projects, high-tech projects, etc.; (2) FDI attractionpolicies have not caught up with international practices when focusing on incentives based

on income without cost incentives for investors, not meeting the global minimum taxprinciple that will take effect from 2024; (3) Although some investment support policieshave been stipulated in the law, there are no specific instructions, so they have almost noeffect in practice; (4) A unified set of criteria has not been developed for local authorities toappraise, monitor, evaluate, and select FDI projects; (5) Although FDI promotion policieshave achieved certain results, but in some localities they are still monotonous in terms ofpromotion methods and forms

In the new context, the cost advantage in attracting FDI will gradually be lost,requiring a transformation of the economic growth model to depth, along with theemergence and strong development of the Industrial Revolution 4.0 Vietnam needs toimprove the mechanism and policies to attract "new generation" FDI, with higher qualitystandards, using advanced technology, new technology, high technology, modernmanagement, high added value, positive spillover effects, connecting global production andsupply chains

Faced with the urgent need to improve policies to attract FDI in the new context, the

author chose the topic “Policies to attract foreign direct investment in Vietnam” to do

the doctoral dissertation in Public Management at National Academy of PublicAdministration (now is Academy of Public Administration and Governance)

2 Purposes and tasks of dissertation research

2.1 Research purposes

On the basis of supplementing and completing the theoretical framework on FDIattraction policy in the new context, the dissertation aims to propose a system ofscientifically based solutions to improve FDI attraction policy in Vietnam in order to

supplement high-quality FDI capital flows, promote economic growth and development,associated with the current context of green growth and digital technology revolution.

- Analyze and evaluate the current status of FDI attraction policy in Vietnam according

to 03 policy contents (encouraging FDI investment, proactively attracting FDI investment;selecting FDI projects; ) Assess and point out the existing limitations in the practicalimplementation of FDI attraction policy and clearly identify the causes leading to thoselimitations

- Propose directions and a system of feasible and practical solutions to continueimproving FDI attraction policies in our country, effectively using new generation FDI in thecoming period, associated with the goal of selecting foreign investors suitable for Vietnam'seconomic development orientation

3 Subjects and scopes of dissertation research

3.1 Research subjects

Theoretical and practical issues on FDI attraction policies

3.2 Research scopes

- Content: (1) The dissertation researches FDI attraction policies, focusing on

analyzing the content of policies as well as policy implementation results; (2) The policysubjects identified in the dissertation include the Central Government and local authorities

at all levels; The subjects regulated by the policy are FDI investors and FDI enterprises; (3)The content of FDI attraction policies researched in the dissertation includes: (1)Encouraging FDI investment; (2) Proactively attracting FDI; (3) Selecting FDI investmentprojects

- In space: Within the territory of Vietnam

- In time: The dissertation collects data and research materials focusing on the period

from 2014 to 2022 and research orientation until 2030

4 Methodology and methods of the dissertation research

4.1 Methodology

The dissertation uses the dialectical materialism and historical materialism methods ofMarxist-Leninist philosophy, applying theories on state economic management science,macroeconomic and microeconomic theories, public management and public policy to

clarify theoretical issues on FDI attraction policies in the new context.

4.2 Research methods

To achieve the research purposes identified above, the dissertation applies acombination of the following methods:

- Statistical methods;

- Methods of analysis, comparison, induction, interpretation;

- Survey and investigation method: From February to June 2023, the dissertation

conducted a survey of 350 FDI enterprises of different sizes (small, medium, large), inmany different fields and industries (electronics, garment, food processing, services, etc.)and in some localities in all 3 regions: North, Central, South such as Hanoi, Hai Phong,Quang Nam, Nghe An, Ho Chi Minh City, Dong Nai, etc The reason why the dissertationchose these localities is because these are the leading localities in each region and thecountry in attracting FDI The purpose of this method is to collect FDI enterprises'assessments of the effectiveness of Vietnam's FDI policies as well as the impact of thepolicies on business performance The total number of votes collected is 306 Survey data isprocessed through Excel software application

5 Research questions and research hypotheses

5.1 Research questions

- In theory: What is the purpose of FDI attraction policy? What objective and subjectivefactors affect FDI attraction policy? What are the main contents of FDI attraction policy?

- In practice: What are the achievements, limitations and inadequacies in each content

of the current FDI attraction policy in Vietnam? Among those limitations, which is the mostfundamental limitation leading to weaknesses in FDI attraction in Vietnam in recent times?What are the main causes leading to those weaknesses? How are the domestic andinternational contexts affecting the implementation of FDI attraction policies in Vietnam inthe coming years? In what direction should Vietnam's FDI attraction policy be innovated tomeet new requirements?

5.2 Research hypodissertation

If the solutions proposed by the dissertation on improving FDI attraction policies such

as encouraging FDI investment; proactively attracting FDI investment; selecting quality FDI investment projects At the same time, organizing and implementing thesecontents well the results of attracting FDI as well as the spillover effects of FDI on thesocio-economic situation in our country will be increasingly higher, contributing to thedevelopment of the country to become a modern industrialized country with a high averageincome by 2030 in accordance with the goals set out in the National Socio-EconomicDevelopment Strategy for the period 2021-2030

high-6 New contributions of the dissertation

Firstly, the dissertation proposes a new concept of a “new generation” FDI attraction

policy That is calling for and cooperating in investment with foreign enterprises with hightechnology, focusing on research and development, modern management capacity, bringinghigh added value to the Vietnamese economy and linking and cooperating with domesticenterprises

Secondly, the dissertation has pointed out and analyzed factors related to the context

and trends that have both positive and negative impacts on the shift of FDI capital flows andthereby adjusted FDI attraction policies of countries, including Vietnam

Thirdly, the dissertation has collected data and evidence to prove the inadequacies that

still exist in attracting FDI in Vietnam after more than 35 years since the first capital flowsfrom abroad into Vietnam

Fourthly, the dissertation analyzes and evaluates the results of implementing FDI

attraction policies in Vietnam over the periods, mainly focusing on the period from

2014-2022 and pointing out the limitations of policy mechanisms that reduce the role andeffectiveness of foreign capital flows To prove these assessments, the dissertation uses theresults of investigations and surveys of FDI enterprises (about 200 enterprises) in differentfields and industries to clarify the practice of the above policies

Fifthly, from the inadequacies in the operations of FDI enterprises, from the limitations

pointed out in the current FDI attraction policy, the dissertation proposes viewpoints anddirections for adjusting FDI policy in the coming period At the same time, the dissertationoffers a system of specific solutions related to the design of a “new generation” FDI policy

as well as the effective implementation of FDI policy in Vietnam

7 Structure of the dissertation

In addition to the introduction and conclusion, there is also a list of references,appendices, diagrams, tables, and the content of the dissertation is structured in 4 chapters:

CHAPTER 1: Overview of the research situation related to the dissertation topic

CHAPTER 2: Theoretical basis and practical experience on FDI attraction policy

CHAPTER 3: Current status of FDI attraction policy in Vietnam

CHAPTER 4: Directions and solutions to improve FDI attraction policies in Vietnam

in the new context

CHAPTER 1 OVERVIEW OF THE RESEARCH SITUATION RELATED TO THE

DISSERTATION TOPIC

During the process of implementing the dissertation research, author has accessed alarge amount of documents in the form of: textbooks, doctoral theses, master's theses,papers, scientific research projects at all levels and many articles, magazine articles, withtopics related to foreign investment and the State's policies in attracting foreign investment.Basically, all the research works that the author has collected and learned related to thedissertation focus on 02 main research directions as follows:

- Research on FDI (investment theory, necessity, role, efficiency of FDI capital,practical operations of FDI enterprises and results )

- Research on foreign direct investment policy (policy types, policy content, policyevaluation criteria, influencing factors )

1.1 Overview of research works on the necessity and role of FDI

1.2 Overview of research works on FDI attraction policies

1.2.1 Research works on FDI attraction policies according to policy contents

1.2.2 Research works on factors affecting FDI policies

1.2.3 Research works on criteria for evaluating FDI attraction policies

1.3 General assessment of published works related to the dissertation topic

Firstly, forming a theoretical framework on FDI and FDI attraction including: concepts

and characteristics, roles, evaluation criteria, influencing factors Basically, research worksagree on the following contents: (1) FDI plays a very important role in the socio-economicdevelopment process of host countries (including Vietnam) in terms of promoting GDPgrowth, import and export, economic restructuring, job creation, improving technologylevel and innovating production methods (2) The viewpoint and policy of the Party andState of Vietnam on FDI capital flows is to encourage, promote and proactively attract FDI

Secondly, most domestic research projects have shown a picture of FDI in Vietnam

over the past three decades in terms of registered and implemented capital scale, investmentcapital is classified by industry and field, investment by partner and FDI investmentefficiency Some research documents associated with space are capital invested in eachlocality or industry and there are also many documents referring to the practical operations

of FDI enterprises, with positive results and inadequacies, limitations still exist Theinadequacies that the research has specifically pointed out are: Most transferredtechnologies only reach an average technological level; the situation of FDI enterprisesdeclaring and reporting losses is increasingly common; most investment projects have smallcapital scale, low ability to spread to the domestic area

Thirdly, some documents have presented some aspects related to FDI attraction

policies such as tax incentives, financial policies, land policies, investment environment

improvement policies, etc., accordingly analyzing and evaluating the implementation ofpolicies as well as pointing out the advantages and results achieved Some scientific workshave also outlined the picture of FDI attraction policies in some countries in the world suchas: China, India, Thailand, Malaysia, Singapore, etc Some domestic documents havepointed out the inadequacies in institutions and policies - bottlenecks in attracting thiscapital flow in Vietnam today.

Fourthly, many researches have proposed solutions to improve FDI attraction policies

in the direction of implementing institutional and legal reforms for foreign investment andharmonizing with the domestic private enterprise sector, regulating preferential policies forindustries with high intellectual content, strengthen promotion and support for industries,support to promote the development of supporting industries; promoting the interactionbetween FDI and domestic enterprises, helping domestic enterprises improve productivity,technology, management skills, etc

1.4 Research gaps on policies to attract foreign direct investment in Vietnam need to be further researched

Firstly, a few research works have mentioned the theory and practice of attracting FDI but

not from the perspective of public management and public policy, but mainly from theperspective of economics and economic theory Some documents use econometric statisticalmethods when referring to factors affecting FDI in the country Meanwhile, the author'sdissertation does not delve into the economic aspects related to foreign direct investment, butfocuses on the system of policies to attract FDI

Secondly, although a few research works have mentioned some component policies in

the State's FDI attraction policy system (financial policy, incentive policy, investmentpromotion, land policy) , in general, a systematic and comprehensive theoreticalframework on FDI attraction policy has not been built Existing works have only stopped atresearching each individual policy in the overall policy system such as tax policy orfinancial incentive policy or land rental price policy Existing documents have not beensystematic enough to build a theoretical framework on this issue

Thirdly, because most of the researches, both domestic and foreign, do not approach

FDI attraction policies from the perspective of public management; therefore, they havenot mentioned the subjective and objective factors affecting FDI attraction policies.Which are the apparatus, policy implementation team; assignment and decentralization

in FDI management, public resources, public funding, etc.; at the same time, thesefactors are considered as part of the system of criteria for evaluating FDI attractionpolicies

Fourthly, previous researches have not mentioned the new context, new viewpoints

and orientations for the process of designing and implementing FDI attraction policies in

Vietnam Therefore, some proposed solutions to improve and enhance the effectiveness ofFDI policies are not suitable for the current new context In addition, analyzing economic,social, political, administrative conditions, domestic and international contexts toeffectively implement policy solutions is very necessary, but unfortunately, there are onlyvery few research works addressing this issue.

Fifthly, from the above overview, the Ph.D student realized that there is a recently

published research work with a name similar to the author's dissertation That is the doctoraldissertation in economics “Vietnam's FDI attraction policy to 2030” by author Le NhuQuynh However, when comparing that dissertation with the Ph.D student's researchdirection, there are differences, not completely overlapping If the author Le Nhu Quynhapproaches FDI attraction policy from 3 aspects: (1) Group of policies related to creating aninvestment environment; (2) Group of policies related to increasing investmentattractiveness; and (3) Group of policies related to investment promotion Meanwhile, thePh.D student's dissertation approaches FDI attraction policy according to the following 3contents: (1) Encouraging FDI investment; (2) Proactively attracting FDI; (3) Selectingquality FDI investors Furthermore, while the research phase of author Le Nhu Quynh wasconducted during the outbreak of the Covid-19 pandemic, the dissertation of the Ph.Dstudent researches the period before, during and after the pandemic has been controlled, andmoving to the economic recovery phase Therefore, in the research of the Ph.D student, thenew context is not to deal with the pandemic but the trends of green growth, sustainablegrowth, advanced high technology, the 4th industrial revolution, etc

1.5 Research orientation of the dissertation

The above research gaps are the basis for setting out the research objectives that thedissertation needs to address Through the above research overview, the author identifies theresearch objectives of the dissertation as follows:

Firstly, completing a relatively complete theoretical framework on FDI attraction

policy including: concept; necessity; function; principles and contents of the policy In thetheoretical part, the dissertation attempts to build a system of criteria for measuring andevaluating the policy; as a basis for analyzing and evaluating the current status of policyimplementation in the following part

Secondly, analyze the practical basis to improve FDI attraction policy in Vietnam,

Select FDI.

Thirdly, identify viewpoints and directions to improve FDI attraction policies in

Vietnam in connection with the current new context On that basis, the dissertation proposesthe content and solutions to continue improving FDI attraction policies in Vietnam in thecoming time To successfully implement the solutions, the dissertation also analyzes anumber of factors and contexts that have a strong influence on policy implementationactivities in this field

Conclusion of chapter 1

CHAPTER 2 THEORETICAL BASIS AND PRACTICAL EXPERIENCE

ON FDI ATTRACTION POLICY

2.1 Overview of foreign direct investment

2.1.1 Concept, characteristics, and classification of foreign direct investment

Foreign direct investment is one of the basic forms of international investment Up tonow, many concepts of FDI have been proposed in different approaches From theresearched concepts, the dissertation approaches the concept of foreign direct investment asfollows: Foreign direct investment is the investment of capital by foreign investors toconduct business activities through the establishment of economic organizations; investment

in capital contribution, purchase of shares, capital contributions of economic organizationslarge enough to gain management rights over that economic organization; or investment inthe form of contracts or project implementation

The forms of FDI capital are relatively diverse according to different approaches Inwhich, some basic forms of FDI capital are proposed based on the following bases:

- Horizontal investment (horizontal FDI) & Vertical investment (vertical FDI)

- New investment; Mergers and acquisitions (M&A); Business cooperation based onbusiness cooperation contract;

- Joint venture enterprise; Enterprise with 100% foreign capital;

Besides the main forms above, FDI capital also has other forms such as investmentunder build-transfer-operate (BTO) contracts, build-transfer (BT) contracts Or import-substituting FDI (related to the production of products that previously had to be importedfrom the host country), export-increasing FDI (driven by the desire to find new sources ofinput for production such as raw materials and intermediate goods) and FDI under theGovernment's efforts (the Government of the host country encourages foreign investors in

an effort to balance the balance of payments deficit); FDI aims to seek resources (resourceseeking), FDI aims to seek markets (market-seeking), FDI aims to seek efficiency(efficiency-seeking), FDI aims to seek strategic assets (strategic-asset seeking), etc

* Characteristics of foreign direct investment:

Firstly, foreign direct investment uses long-term development investment capital,

associated with the construction of production and business facilities and branches

Secondly, the capital owner is also the person directly managing, operating and taking

responsibility for the production and business results

Thirdly, the division of Board of Directors members and management of the capital

use process are based on the capital contribution ratio of capital owners

Fourthly, FDI capital does not have to repay debt, does not create a national debt

burden and has no other political constraints in the host country

2.1.2 Criteria for evaluating the effectiveness of foreign direct investment

(1) Economic indicators(2) Social indicators(3) Environmental indicators

2.2 Theory on foreign direct investment attraction policy

2.2.1 Concept and characteristics of foreign direct investment attraction policy

From the perspective of research within the framework of doctoral research, the

dissertation approaches FDI attraction policy in the following way: Foreign direct investment attraction policy is the sum of ideas, viewpoints, measures and tools that the State uses to create a favorable environment to effectively attract FDI capital in a certain period of time, in order to achieve the goals according to the socio-economic development strategy of a country With the above general concept, within the scope of the dissertation,

Researched FDI attraction policies include the content of promulgation and organizing theimplementation of legal documents related to FDI attraction

* Characteristics of foreign direct investment attraction policy

Firstly, FDI attraction policy is an important part of a country's FDI policy, in which

FDI attraction is the initial stage, opening the entire process of foreign investment activities:attracting FDI, then using and absorbing FDI capital

Secondly, FDI attraction policy is a form of public policy, therefore, the subject that

promulgates and implements FDI attraction policy is the State, including central legislativeand executive agencies, local governments depending on the level of decentralization ineach country

Thirdly, because the FDI attraction policy is built, designed and issued by the State

therefore, the objectives, contents, measures of the FDI attraction policy are not fixed butcan change in each period depending on the viewpoints, policies and socio-economicdevelopment orientations of each country in each period

Fourthly, FDI attraction policy is mainly a policy of targeted promotion and

encouragement, so one of the typical tools of FDI attraction policy is incentives andinvestment support through tax and fee exemptions and incentives on land, administrativeprocedures, etc to create competitive advantages and reduce investment costs for foreigninvestors

2.2.2 Objectives of foreign direct investment attraction policy

The specific objectives of the new-generation FDI attraction policy associated with thecurrent context are:

(1) Switch from attracting FDI at all costs to selective attraction, from passiveattraction to active attraction, from attraction based on financial efficiency and project scale

to attraction based on economic - social - environmental efficiency

(2) Attracting FDI based on the concept of win-win investment cooperation;

(3) Attracting FDI aims to take quality, technological efficiency and environmentalprotection as the main selection criteria, prioritizing projects with advanced technology,new technology, clean technology, etc

2.2.3 Requirements of foreign direct investment attraction policy

- In accordance with the country's socio-political regime, guidelines and political viewpoints

- In accordance with current legal provisions

- Suitable for the country's economic conditions

- Taking advantage of achievements of science and technology, focusing on environmentalprotection

2.2.4 Contents of foreign direct investment attraction policy

The content of the FDI attraction policy depends on the policy objectives determined

in each period In general, the overarching objective of the FDI attraction policy is toincrease the attractiveness of the economy to FDI investors, create a competitive advantagefor the investment environment of the host country compared to other countries in order toproactively attract FDI capital flows into industries and fields that are consistent with thegrowth and socio-economic development goals of the country in each period Within theframework of the dissertation, the Ph.D student focuses on researching the following 3contents of the FDI attraction policy:

(1) Content on encouraging FDI investment includes tax incentives; fees, land andsome other specific incentives ;

(2) Content on proactively attracting FDI investment includes investment promotion;investment assurance; improving the investment environment

(3) Content on FDI investment selection includes developing and promulgatingconditions and criteria for selecting FDI projects to create a legal corridor for localities toproactively consider and approve investment policies before deciding to grant investmentregistration certificates to FDI investors

2.2.5 Criteria for evaluating foreign direct investment attraction policies

(i) Effectiveness; (ii) Efficiency; (iii) Systemicity; (iv) Transparency and stability;(v) Reasonableness and appropriateness

2.2.6 Factors affecting foreign direct investment attraction policies

2.2.6.1 Objective factors

Including: Trends in globalization and international economic integration; Movementtrends of FDI capital flows; Competition level to attract FDI among countries; Worldeconomic environment and policies of investing countries; Factors related to foreigninvestors, especially transational corporations

2.2.6.2 Subjective factors

Including: Viewpoints and orientations for socio-economic development of the countryattracting investment; Economic, political, social environment and legal system of the countryattracting investment; State apparatus, capacity of policy makers and policy implementationstaff; Available resources of the country attracting capital; Ability to integrate intointernational economy and advantages of the country in the international arena

2.3 International experience in policies to attract foreign direct investment and reference values for Vietnam

2.3.1 Experience in policies to attract foreign direct investment in some countries

2.3.1.1 China's foreign direct investment attraction policy

2.3.1.2 Singapore's foreign direct investment attraction policy

2.3.1.3 Thailand's foreign direct investment attraction policy

2.3.1.4 Malaysia's foreign direct investment attraction policy

2.3.2 Lessons learned about policies to attract foreign direct investment can be applied to Vietnam

Firstly, build appropriate FDI attraction policies for each development stage.

Secondly, focus on building a legal corridor to create an attractive investment environment.

Thirdly, appropriately use investment incentives through tax tools to attract FDI capital

Fourthly, continue to simplify investment procedures and increase the transition to online administrative procedures

Fifthly, prioritize quality, in-depth development, lower costs and higher profits in attracting FDI.

Sixthly, pioneering and creative in FDI attraction policy

Seventhly, create and maintain an open and favorable investment environment.

Conclusion of chapter 2