Ho Chi Minh City must become a leading, exceptionally smart urban center and the nation’s foremost financial and economic hub. This distinction signifies the Central Government’s dedication and unwavering belief in the city. Such commitment is specifically demonstrated through Resolution No. 98/2023/QH15 issued on June 24, 2023. This resolution introduces superior and unique policy mechanisms designated specifically for Ho Chi Minh City. It allows the city to pilot new structures to successfully achieve the development goals equivalent to major cities worldwide. Resolution 98 aims to alleviate various bottlenecks across different sectors within the city. Particularly, the unique mechanisms outlined in the resolution, stemming from the city’s stimulus programs, are anticipated to infuse new vitality into Ho Chi Minh City, presenting opportunities for businesses to contribute more significantly. Resolution 98 plays a role in spreading and catalyzing economic and social development for neighboring regions, the key economic zone in Vietnam’s southern region, the provinces in the Western region, and the nation at large, thereby creating substantial opportunities and breakthroughs for investors and businesses alike.

Key points in the content of Resolution 98

Resolution 98/2023/QH15 regarding the trial mechanisms and special policies for Ho Chi Minh City’s development consists of 12 Articles divided into 4 groups containing 44 items covering mechanisms and policies across 7 primary fields:

  • Investment management
  • State finances and budgets
  • Urban management, resources, environment
  • Priority sectors attracting strategic investors to Ho Chi Minh City
  • Science and technology management and innovation
  • Organizational structures of the city’s government apparatuses
  • Organizational structures of the Thu Duc City government apparatus

Unlocking and mobilizing resources, decentralizing authority, and allowing streamlined processes are the three main principles applied to actualize the trial objectives of the special mechanisms and policies for Ho Chi Minh City’s development.

Regarding investment management

Article 4 of Resolution 98/2023/QH15 on investment management grants the People’s Council of the City various rights:

  • Allocation of public investment funds to support poverty reduction and employment
  • Piloting urban development models focusing on public transportation development (TOD). Orienting the development of public transportation systems as the basis for urban planning, improving land utilization efficiency, public works, contributing to reducing traffic congestion and environmental pollution.
  • Use of local budgets for independent implementation of public investment projects.
  • Authority to organize bidding to select investors for project execution.
  • Expansion of investment areas through Public-Private Partnerships (PPP) for sports and cultural projects. The total minimum investment scale of PPP projects in healthcare, education and training, sports, and culture is stipulated by the City People’s Council.
  • Application of the Build-Operate-Transfer (BOT) contract type for upgrading, expanding, and modernizing existing road infrastructure projects.
  • Implementation of Build-Transfer (BT) investment projects as for projects using public investment capital. The total investment amount of BT projects is determined similarly to projects using public investment capital. The City People’s Committee will regulate the evaluation criteria regarding the capacities, experiences, and financial techniques of contractors executing projects and payments from the city budget.

Regarding state finance and state budgets

Policies, fees, and charges regulated in Article 5 of Resolution 98/2023/QH15 on state finance and state budgets grant the City People’s Council various rights:

  • The City People’s Council decides, adjusts fees and charges not yet stipulated in the List of Fees and Charges issued alongside the Law on Fees and Charges. They benefit from 100% of additional revenue generated from adjusting fee and charge policies.
  • Use of remaining funds from salary reform in the city’s budget for economic-social infrastructure development.
  • Issuance of local government bonds, borrowing from domestic financial institutions, other domestic institutions, and foreign loans from the Government, borrowing back to the City at a total debt level not exceeding 120% of the City’s budget revenue received through decentralization.
  • Annually, the central budget supplements a target amount for the city’s budget, not exceeding 70% of the increased revenue to the central budget from revenue sharing between the central budget and the city’s budget compared to the Prime Minister’s allocated estimate.
  • Budget allocations of district People’s Committees within the City reserve from 2% to 4% of the total district budget expenditure to respond to natural disasters, epidemics, incidents, catastrophes, famine relief, important defense and security tasks, and other necessary missions.

Using state budget resources for the development of a city’s economic-social infrastructure through public investment funds to support interest rates for HFIC-funded projects within priority economic-social development sectors within the city.

Regarding urban management, resources, and the environment

In the realm of urban management, resources, and the environment stipulated in Article 6 of Resolution 98/2023/QH15, the City People’s Council has the authority:

  • To change the land use purpose for paddy fields less than 500 hectares, complying with land use planning and regulations.
  • To approve partial adjustments to general construction planning for functional areas, urban areas, and technical infrastructure specialties.
  • To approve planning and allocate land funds for social housing within commercial housing projects or elsewhere.
  • To establish land price adjustment factors that accurately reflect current circumstances..
  • To decide on land recovery by the state for land rearrangement, processing of state assets as determined in the BOT contract.
  • To allow economic organizations leased state-owned land by the state to annually collect land rental fees as collateral, transfer, or sublease rights within land lease contracts.
  • To undertake land transfer, lease procedures according to land law regulations for newly formed land areas resulting from coastal land reclamation.
  • To review and decide on additional solid waste quantities by ordering investors implementing solid waste treatment projects.
  • To enact policies encouraging, supporting, and offering incentives for individuals, households, cooperatives, and enterprises in transitioning from fossil fuel vehicles to clean energy vehicles.

Regarding priority industries attracting strategic investors

The list of priority industries to attract strategic investors to the City under Article 7 of Resolution 98/2023/QH15 includes:

  • Investment in Establishing Innovation Centers. Focused on IT, biotechnology, automation, novel materials, and large-scale clean energy projects with a minimum investment capital of 3,000 billion VND.
  • Projects in the Integrated Semiconductor Industry. Covering design technology, component manufacturing, integrated circuitry, flexible electronics, new technology chips, and clean energy industrialization requiring an investment capital of at least 30,000 billion VND.
  • Development of Can Gio International Transfer Port. According to planned guidelines, with an investment capital of at least 50,000 billion VND.

Regarding Science, Technology Management, and Innovation

Article 8 of Resolution 98/2023/QH15 outlines support for innovative and startup activities in priority sectors through:

  • Exemption from corporate income tax and personal income tax in specific cases to support innovative startups.
  • Establishing criteria, conditions, and content for innovative startup activities and the criteria and fields for testing new technological solutions, along with specifying support and assistance levels.
  • The City’s People’s Council will regulate salaries, remuneration, welfare benefits, and other incentives for leadership positions in public science and technology organizations.

Regarding the City’s Governmental Apparatus

With various specialized policies allowing for experimental models and innovative methods, Article 9 of Resolution 98/2023/QH15 allows Ho Chi Minh City to:

  • Establish the Food Safety Department under the City’s People’s Committee, responsible for state management of food safety, inspection, examination, and handling of administrative violations in food safety.
  • Determine the number of Deputy Chairpersons for wards, communes, towns based on economic activities and local area characteristics.
  • Assess the sufficient number of officials, public employees necessary in wards, towns, and district People’s Committees under the City’s providence, and allocate additional budgetary income for officials, public servants, and non-professional activists in communes, wards, towns.
  • Decide on the establishment, reorganization, dissolution of public service units under the City’s People’s Committee to ensure compliance with regulations.
  • Transfer specific functions, tasks, and powers of specialized agencies under the City’s People’s Committee to other specialized agencies or administrative entities as stipulated by law.
  • Supervise and approve detailed construction planning tasks of 1/500 in the High-Tech Zone Management Board, Export Processing Zone Management Board, as delegated for management.

Regarding the Governmental Apparatus of Thu Duc City

Empowering Ho Chi Minh City further in organizational structure and power decentralization, Article 10 of Resolution 98/2023/QH15 allows Ho Chi Minh City to grant authority to the Thu Duc City People’s Committee to:

  • Delegate specialized agencies to evaluate investment proposals, review project approval decisions, contractor selection, and contract signing. Also, to undertake scientific research and technology tasks.
  • Delegate power and authorization to the Chairman of Thu Duc City People’s Committee, heads of its specialized agencies, the People’s Committee Chairs of wards, empowering them with specific duties and jurisdiction.
  • Determine the organizational structure, quantity, functions, tasks of departments, specialized boards, and dependent units. Additionally, decide on position-based allowances for leadership positions in Party organizations, associations, and city government.

Resolution 98/2023/QH15 is a comprehensive breakthrough, offering strong innovations in mechanisms and developmental policies for Ho Chi Minh City, which are expected to bring forth numerous opportunities for investors. For further in-depth insights, stay tuned for subsequent articles. Be sure to follow and discover more useful information on our website. For detailed guidance, feel free to contact us at letran@corporatecounsels.vn