Politics & Law
Government and Political System
Thirty years after the launch of the economic reforms known as Doi Moi, with economic revolutions paving the way for the market economy have been rid of Vietnam’s significant potential. Vietnam government has changed considerable policies, such as doing away with the ration stamp, cutting price supports, mitigating two-price system, transforming to apply market price system, exchange rates. The combination between economic international revolutions and integration international economic, exceeding the economic blockade and embargo have offered valued processes in Economic aspects. Vietnam reached middle-income status in 2009, achieved most Millennium Development Goals (MDGs)—many of them ahead of time—and has adopted the Sustainable Development Goals (SDGs).
These days, the innovated Political Economy model of Vietnam is The Communist Party leading, the State managing and Vietnamese people owning. In term of political, the political regime has been founded on Democratic centralism in which political decisions reached by voting processes are binding upon all members of the party. In term of economic, Vietnam has centralized resources, given priority to invest for economic revolution on two primary terms. Firstly, transforming from the centrally-planned economy with a market-based mixed economy based on state-owned industry to the socialist-oriented market economy. Secondly, transforming from closed economy to integrated and connected to the global economy.
The political system
The political structure of Vietnam is represented by a single party republic framework, the President is the head of the state and the Prime Minister is the head of the government. Both the President and Prime Minister of Vietnam exercises the executive powers. The legislative power is exercised by the National Assembly of Vietnam. The Judiciary is independent of the executive.
The National Assembly shall decide the fundamental domestic and foreign policies, the socio-economic tasks, the country’s national – defenses and security issues, the essential principles governing the organization and activity of the State machinery, the social relations and the activities of the citizen.
The Government is the executive organ of the National Assembly, the highest organ of state administration of the Socialist Republic of Vietnam. It shall carry out overall management of the work for the fulfillment of the political, economic, cultural, social, national – defense, security and external duties of the State.
Ministries are responsible for the execution of state power in the certain industry or sector. People’s Committee (province, district, and commune) governs management affairs within its administrative location, manages, directs, operates daily activities of local state bodies and executes policies of the relevant People’s Council and higher state bodies.
The country goes through a political transition every five years. The 12th National Congress of the Communist Party, held in January 2016, defined the political and development orientations for Vietnam for 2016–20 and selected a new leadership for the party, state, and government. A general election took place in May 2016 and the new National Assembly reconfirmed the new state president, prime minister, and cabinet members in July 2016.
The legislative construction of Vietnam has considerable positive changes. The Vietnamese legal system has been basically synchronized, being gradually improved, creating an important legal corridor, and strong motivation to carry out the comprehensive reform of the country and international integration.
The economic law system of Vietnam has been highly sufficient. Despite shortcomings, it has positive contributed to transformation of the economic management mechanism, promotion of production progress, mobilization and efficient employment human and capital resources. The business and investing environment have been enhanced, be more equal and with ease, improved the role and competition of subjects and business types.
In 2018, the Authorities has accelerated the reform of administrative procedures, cut down and simplified business conditions to enhance national competitiveness. Moreover, improving the civil servants’ quality, revolution and reduction the clues of administrative apparatus of the legal bodies has been pushing up.
In 2014, The National Assembly issued Law on Investment (LOI) and Law on Enterprises (LOE).
LOI deals with business investments in Vietnam and outward business investments.
LOE deals with the establishment, organization, restructuring, dissolution, and relevant activities of enterprises.
The breakthrough changes of lOI and LOE have promoted strongly growth of FDI into Vietnam:
- Creating a transparent legal foundation to ensure the implementation of the investment and business freedom principles in industries not prohibited by law.
- Revising and mitigating the business sectors and conditions inappropriate.
- Reinforcement, amendment policies to ensure investing in accordance with terms in Constitution and International treaty in which Vietnam is a member.
- Simplifying documents, processes and procedures, and reducing time for granting the Certificate of investment registration from 45 days to 15 days.
- Perfecting investment incentive policies to enhance the quality and efficiency in investing attraction.
Nowadays, the foreign investor has been offered a significant incentive when investing in Vietnam, which are tax incentives, capital and investing procedures supporting. The Vietnam’s corporate income tax incentives is conducive for businesses with the lower tax rate than other countries. The tax incentives are toward the geographical areas incentives rather than economic sectors.