Dr. Phan Huu Thang, chairman of the Vietnam Industrial Park Finance Association

The Party leaders who devoted their lives to the liberation of the nation, achieving the remarkable success of the August 1945 Revolution, dedicated their intellect to rebuilding the country to be more prosperous and dignified, standing shoulder to shoulder with the world’s leading powers.

Reflecting on Vietnam’s 80-year journey of socioeconomic development reveals the symbolic connection between the August 1945 Revolution and the country’s foreign investment achievements. If the former secured Vietnam’s national sovereignty, the latter during the economic reforms of the 1980s and global integration era symbolises its assertion of economic sovereignty in a globalised world.

Immediately after reunifying the country, the Party and state leadership began considering the use of foreign capital in the post-war context: a constrained state budget, a heavily war-damaged economic infrastructure, and other challenges. Yet, through rational and creative approaches, they laid the groundwork for Vietnam’s socioeconomic development.

Dedicated legislation

In early 1977, during a meeting at the Office of the Chairman of the Council of Ministers, Vice Chairman Dang Viet Chau conveyed the directive to draft a legal document to facilitate and provide a legal basis for foreigners to invest and conduct business in Vietnam directly. Based on this, a drafting team was established, and within two months, they completed the draft of the regulations on foreign funding.

The same year, on behalf of the government, Chairman of the Council of Ministers Pham Van Dong promulgated the foreign investment regulations. This was the first legal document to institutionalise the Party’s economic policies after the country entered the phase of rebuilding an economy devastated by war.

The regulations outlined fundamental principles for foreign investment in Vietnam, covering sectors, partners, capital contributions, forms, duration, funding ratios, foreign exchange management, accounting and statistical systems, procedures, dissolution, and dispute resolution.

These 1977 rules marked the first legal framework for the country on foreign investment, opening a new chapter in the history of Vietnam’s economic development towards multilateralisation and diversification. However, due to unfavourable international conditions in the late 1970s and early 1980s, which limited the expansion of economic relations between Vietnam and non-socialist countries, the regulations did not achieve the desired results.

In 1984, the Politburo decided to supplement and refine the 1977 regulations, moving towards the development of a comprehensive investment law. Based on this, Chairman Pham Van Dong established a subcommittee to study legislation. The draft law was completed in early 1986 and approved by the Council of Ministers that March.

The draft was then sent to United Nations experts for review and feedback, while also soliciting opinions from businesspeople and journalists. The Politburo provided input on the draft Investment Law during its meeting in September 1987. Subsequently, the Committee for Economic Relations with Foreign Countries was tasked with finalising the draft for submission to the State Council.

The draft law was presented to the eighth National Assembly at its second session. After Minister Vo Dong Giang, Chairman of the Committee for Economic Relations with Foreign Countries, presented the draft on behalf of the government, the revised and supplemented draft law was passed on December 29, 1987. Thus, the 1987 Foreign Investment Law was officially enacted.

Since then, the law has been amended and supplemented to varying degrees in 1990, 1992, 1996, 2000, 2005, 2014, and 2020, and is widely regarded by the international community as increasingly open, attractive, and aligned with international standards. As a result, even in the early days when Vietnam’s market mechanisms were not fully developed, foreign investors could still conduct activities in the country with minimal differences compared to traditional market economies.

Socioeconomic alignment

Over nearly 40 years of foreign direct investment (FDI) attraction, efforts have focused on refining and expanding related objectives, such as attempting to focus on high-tech content, contributing to the transformation towards industrialisation and modernisation, addressing employment and improving living standards, and enhancing the economy’s independence and self-reliance.

The year 2005 marked a significant milestone in the legal framework for overseas funding with the issuance of the Investment Law, which applied uniformly to both domestic and foreign funding. This created a level playing field, eliminated discrimination between investors, simplified procedures, and facilitated the attraction and efficient use of capital to meet the demands of international economic integration.

Reviewing FDI attraction outcomes through key milestones of Investment Law amendments shows that, under the Party’s close guidance, each revision and supplementation has been tailored to domestic and global geopolitical and economic contexts.

FDI in subsequent phases has consistently surpassed previous ones in both quantity and quality, significantly contributing to socioeconomic development in each period.

The development and refinement of the legal framework for investment have also played a crucial role in Vietnam’s successful international economic integration, marked by its accession to the World Trade Organization in 2005 and participation in numerous free trade agreements with countries worldwide.

The Politburo then issued Resolution No.50-NQ/TW in 2019, outlining directions for improving institutions and policies to enhance the quality and efficiency of foreign investment cooperation by 2030.

Key contents include: developing highly competitive and globally integrated cooperation institutions, protecting the environment, addressing social issues effectively, improving productivity and quality, and much more.

By 2030, the 100th anniversary of the Party’s founding, Vietnam aims to be a developing country with modern industry and upper-middle income.

As the Party’s leader today, Party General Secretary To Lam has called for a new era of development - a period of national ascent.

Speaking in March, he stated, “Vietnam remains a reliable destination for investors, with many businesses and corporations choosing it as a strategic production hub connected to global supply chains. It is increasingly asserting its role as a key link in the new global value chain structure, particularly in electronics, science and technology, innovation, semiconductors, digital economy, and green economy.”

The dedication and precise guidance of Party General Secretary Lam, closely aligned with both domestic and international contexts, reflect the creative and insightful leadership of the Party’s top leaders across revolutionary periods before and after the August 1945 Revolution.

State agencies managing foreign investment at all levels, along with domestic and foreign businesses, will continue to recognise the importance of directives for FDI. These will guide implementation of the objectives, contributing to Vietnam’s success in socioeconomic development.