Hanoi (VNS/VNA) - The Department for Economic ZonesManagement (DEZM) of the Ministry of Planning and Investment is in theprocess of completing the draft Law on Special Administrative-Economic Units,with adjustments being made in terms of local operations, organisation,administration and foreign investment incentives and policies.

Tran HuyDong, Director General of the DEZM, said the draft law is an important legalframework for the establishment, development, management and operation of threespecial administrative units: Van Don in Quang Ninh province, Northern VanPhong in Khanh Hoa province and Phu Quoc in Kien Giang province.

Itspolicies will focus on building a particularly favourable business environmentby greater opening of the market in the special zones and regulating investmentconditions in attractive industries, especially for foreign investors.

The draftlaw also proposes regulations to renovate and simplify investment at aprovincial level in accordance with policies set by the Prime Minister,particularly when granting investment registration certificates forpublic-private partnership and offshore investment projects.

Access toland for domestic and foreign investors is also improved in the proposed draft.Accordingly, investment projects with significant innovation, mostly in thefields of research and development, health care, education, and projects ofstrategic importance would be granted a 99-year land lease.

Inaddition, the State budget will focus on targeted objectives for these specialunits in the next 10 years, allowing for local budget deficits in favour ofimportant technical, social and environmental infrastructures, and implementingspecific policies prescribed in the draft law.

The draftlaw gives priority to incentive policies on tax exemption, with the highestlevel of incentives applied to creative start-ups, research and development,healthcare, education and investment projects.

🐼[MPI proposes big breaks for special economic zones]

The lawalso regulates tourism and services development policies, such as raising thelevel of duty free sales value for Vietnamese tourists and foreigners innon-tariff areas, implementing a simplified and expanded visa policy, andapplying lower special consumption tax rates for casino businesses to competewith Singapore and Malaysia.

Morespecifically, there are differences in the level of competitiveness for eachnew administrative zone, which would affect their development pathways, said Dong.

Accordingto Dong, Van Don, which is only a three to four hours flight away from China,should plan to gradually construct and improve its airport for better access tothis market in terms of tourism and logistics.

Phu Quoc,with its 3,000 hectares of natural beauty, and the advantage of being easilyaccessible from other ASEAN countries, should attract investors in the tourismand services areas.

The VanPhong Special Zone, which can potentially house a number of deep sea ports, asit is just next to a junction of important international maritime routes in theEast Sea, should focus on strategic development for maritime transportationthrough the Kra Canal.

Preferentialinvestment incentives are only applied to industries with developmentpriorities in each special zone. For example, in Van Don, only tourism and hightechnological production projects will be given preferential treatment, and thesame applies for mechanical engineering, telecommunication or electronicsproduction projects in Van Phong.

The draftlaw includes changes in the administrative structure of these specialadministrative zones, placing personal rather than collective responsibility onlocal leadership for implementation of government policies.

Heads ofspecial economic administrative units will perform the function of Statemanagement, deciding and organizing the implementation of all administrativeand socio-economic activities in their respective units, while judicialadministration will be managed by a district level special court with thecompetency and responsibility of a provincial level court.

Dong alsomentioned other adjustments in these special economic units, such as thepossibility applying foreign laws for any foreign business investing in Vietnam,which should help solve business-related issues that might arise in foreigncourts.

Nevertheless,the DEZM considers the biggest obstacle in completing the draft law is whetherit can meet investors’ needs. As such, the Ministry of Planning and Investment(MPI) believes it should follow the Politburo’s direction and the PrimeMinister’s orientation to put emphasis on experimenting and adjusting policiesin a continuous and flexible manner through each economic development period.

Hoang NgocGiao, Director of the Institute for Policy, Law and Development Studiesand Tran Dinh Thien, Director of the Vietnam Institute of Economic and PolicyResearch, said that domestic investment must be treated the same as foreign oneto enable a competitive edge to Vietnam’s domestic economy.

The draftlaw is expected to be submitted by MPI to the 14th National Assembly forcomments during its fourth session in October, with hopes of getting itapproved by the fifth session in October 2018.-VNA