Vietnam’s Ministry of Information and Communications Convenes Stakeholder Meeting to Finalize Draft Law on Information Technology Industry

On August 12th, the Ministry of Information and Communications (MIC) hosted a crucial working session with various ministries, sectors, and relevant entities to gather feedback and finalize the draft Law on the Information Technology Industry. This proactive step aims to ensure the legislation is robust and comprehensive before its submission to the Government and subsequently to the National Assembly for deliberation and approval.

The meeting, held at the MIC’s headquarters, was presided over by Minister of Information and Communications, Mr. Bùi Hoài Sơn. Key attendees included representatives from the Government Office, the Ministry of Planning and Investment (MPI), the Ministry of Finance, and other ministries and organizations with vested interests in the burgeoning IT sector. The presence of such a diverse group underscores the interdisciplinary nature of the proposed law and the government’s commitment to a collaborative legislative process.

Genesis and Objectives of the IT Industry Law

The initiative to draft the Law on the Information Technology Industry stems from a recognized need to address existing gaps and inconsistencies in the current legal framework governing the IT sector, particularly within the broader Information Technology Law. The existing regulations, while foundational, have proven insufficient in fully capturing the dynamic evolution and increasing complexity of IT operations. This new law is designed to create a clear, comprehensive, and supportive legal environment that will foster the growth and innovation of Vietnam’s IT industry.

A primary objective of the draft law is to establish a robust legal framework that stimulates the development of the IT industry, transforming it into a significant contributor to the national economy. This involves creating an enabling environment for IT enterprises, encouraging them to move beyond basic assembly and towards higher value-added activities such as design, integration, and manufacturing of core IT products. The law aims to cultivate a vibrant marketplace for IT products and services, driving the development of domestically designed and manufactured IT products.

Key Provisions and Scope of the Draft Law

The draft Law on the Information Technology Industry is poised to encompass a wide array of activities and stakeholders. Its scope is expected to include:

• IT Industry Operations: This will cover all activities related to the production, provision, and development of IT products, software, and services.
• IT Industry Development Assurance: The law will lay down mechanisms and policies to ensure the sustained and strategic growth of the IT sector.
• Rights and Responsibilities: It will clearly define the rights and responsibilities of state agencies, organizations, and individuals involved in or connected with the IT industry.

Furthermore, the legislation will specifically address the production and supply of IT products and services for national defense, security, and public health, acknowledging their critical importance. The draft law’s applicability is intended to extend to all agencies, organizations, and individuals participating in or having interests in the IT industry.

Driving Investment and Regulatory Framework

A central theme emerging from the discussions was the critical importance of investment in propelling the IT sector forward. Ms. Phạm Thuý Hạnh, Deputy Director of the Legal Department at the Government Office, emphasized that the draft law needs to focus on two major policy pillars: investment incentives and the establishment of a sound legal framework.

"To develop the IT industry, the most important aspect is the issue of investment attraction, investment efficiency, policies, and related incentives. The Ministry of Information and Communications has proposed the highest level of incentives, as these are the core elements for development and are crucial during this period," stated Ms. Hạnh. This highlights the government’s recognition that substantial and targeted investment is indispensable for fostering innovation and competitiveness within the IT sector.

Echoing this sentiment, Mr. Đỗ Văn Sỹ, Deputy Director-General of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI), suggested that the law should establish "IT industrial parks" within the draft Law on the Information Technology Industry, aligning with the provisions of the Law on Industrial Zones and Economic Zones, which is also overseen by the MPI. This proposal aims to create specialized zones that offer concentrated infrastructure, supportive services, and potentially streamlined administrative procedures, thereby attracting and nurturing IT enterprises.

MPI representatives also advocated for the inclusion of clear guidelines for investment incentives within IT industrial parks, proposing that the draft law be reviewed to ensure alignment with existing legal frameworks governing investment. This would likely involve a thorough examination of tax incentives, land use policies, and other financial or administrative benefits designed to encourage both domestic and foreign investment in Vietnam’s IT sector.

Addressing Specific Concerns and Future Outlook

The working session provided a platform for participants to raise and discuss numerous specific issues pertinent to the draft law. These included considerations for investment incentives for the "soldered electronics" industry, VAT refund policies, and the establishment of research and development (R&D) policies, among others. The discussions underscored the multifaceted nature of supporting a modern IT industry, which requires a holistic approach encompassing not only technological advancement but also fiscal, regulatory, and human resource development strategies.

One notable point raised by representatives from various ministries and sectors pertained to the development of policies for "soldered electronics" and the implementation of VAT refunds for IT products. This indicates a recognition of the need to support specific sub-sectors within the broader IT landscape that are crucial for national technological self-sufficiency and economic competitiveness. The inclusion of provisions related to R&D policies also signifies a forward-looking approach, emphasizing the importance of continuous innovation and the creation of intellectual property within Vietnam.

The dialogue also touched upon the establishment of policies for the semiconductor industry, a sector identified as critical for future technological development. The need for clear and attractive investment incentives in this high-tech field was stressed, alongside the importance of aligning these policies with existing legal frameworks governing industrial and economic zones. This suggests a strategic vision to position Vietnam as a significant player in the global semiconductor supply chain.

Chronology of Legislative Development

The journey towards the Law on the Information Technology Industry has been a gradual but determined one. While the specific timeline for the drafting process was not detailed in the original report, the current meeting signifies a crucial phase: the pre-submission consultation stage. This follows extensive preliminary work, including research, policy analysis, and initial drafting by the Ministry of Information and Communications.

• Initial Assessment and Need Identification: Recognizing the evolving landscape of the IT sector and the limitations of existing legislation, the MIC initiated the process of identifying the need for a dedicated law.
• Policy Formulation and Drafting: The MIC, in collaboration with relevant ministries and experts, undertook the complex task of drafting the initial version of the law, focusing on core objectives and scope.
• Inter-Ministerial Consultations: The current working session represents a key milestone in this phase, involving broader consultation with a wider array of government bodies and industry stakeholders.
• Feedback Integration and Refinement: Following this meeting, the draft law will undergo further refinement based on the feedback received, ensuring that diverse perspectives are considered.
• Submission to Government and National Assembly: The finalized draft will then be submitted to the Government for review and approval, before being presented to the National Assembly for legislative debate and enactment.

This structured approach ensures that the legislation is well-considered, addresses the practical needs of the industry, and aligns with national development goals.

Broader Implications and Future Impact

The successful enactment of the Law on the Information Technology Industry is expected to have far-reaching implications for Vietnam’s economic and technological trajectory. By providing a clear, supportive, and modern legal framework, the law aims to:

• Boost Investment: Attract both domestic and foreign direct investment into the IT sector, fostering a more dynamic and competitive market.
• Enhance Innovation: Encourage research and development, leading to the creation of novel IT products and services, and strengthening Vietnam’s position in the global technology landscape.
• Develop Human Capital: Drive the demand for skilled IT professionals, necessitating increased investment in education and training programs, and creating high-value employment opportunities.
• Strengthen Digital Economy: Lay the foundation for a more robust and resilient digital economy, essential for national development and competitiveness in the 21st century.
• Promote Digital Transformation: Facilitate the broader digital transformation across all sectors of the Vietnamese economy, improving efficiency, productivity, and public services.

The law’s focus on moving up the value chain, from assembly to design and manufacturing, is particularly significant. It reflects a strategic ambition to transition Vietnam from a manufacturing hub to a knowledge-based economy, leveraging its growing pool of talent and its increasing integration into global supply chains.

The inclusion of provisions related to cybersecurity and data protection, though not explicitly detailed in the initial report, is also anticipated, given the critical nature of these aspects in the modern digital age. A comprehensive IT law would naturally need to address these concerns to ensure the safety and integrity of the digital ecosystem.

The collaborative approach demonstrated by the Ministry of Information and Communications in organizing this working session is a positive indicator of the government’s commitment to creating legislation that is not only legally sound but also practical and effective in achieving its intended objectives. The continued engagement with stakeholders will be vital in shaping a law that truly empowers Vietnam’s IT industry and propels the nation towards its digital future.