The international community, as well as domestic and foreign companies, are pleased with the ongoing improvement of the business environment in Vietnam in recent years, especially the reduction of investment and business conditions and specialized inspection procedures.
The Vietnamese government has sought to create a stable business environment and encourage startups. Over the past five years (2014-2018), it promulgated Resolution 19/NQ-CP regarding measures to improve the business environment and enhance national competitiveness, and Resolution 35/NQ-CP pertaining to business support and development until 2020. These legal documents have contributed to facilitating business access to new development opportunities.
“The government’s efforts with active contributions by ministries and sectors have yielded significant results. By October 31, 2018, ministries and sectors had proposed plans to cut more than 50 percent of business conditions. This could be said Vietnam’s biggest effort to improve the business environment so far,” said Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI).
At the Annual Vietnam Business Forum (VBF) 2018 that took place recently in Hanoi, business representatives said they saw greater improvements in procedures for establishing a business and gaining access to electricity. However, they indicated slower progress in dealing with bankruptcy, import and export procedures, and investor protection. The forum is a platform for policy dialogue between the Vietnamese government and the private sector.
Currently, 13 percent of business registration procedures are implemented online. The application of information technology has also facilitated tax payments. However, a gap in understanding tax regulations still exists between businesses and tax authorities.
In the field of infrastructure development, Koji Ito, President of the Japan Chamber of Commerce and Industry in Vietnam, praised the Vietnamese government’s measures to encourage public-private partnership (PPP) projects, especially Decree 63 issued in May 2018, which has helped simplify investment procedures for PPP projects. Under this decree, PPP projects do not have to apply for investment registration certificates.
Representing the European Chamber of Commerce in Vietnam (Eurocham), Nicolas Audier said the Eurocham’s membership growth to over 1,000 in 2018 reflects the attraction of the Vietnamese business and investment environment for European companies.
Tomaso Andreatta, Co-Chairman of the VBF Consortium, said that Vietnam’s progress in improving the business environment has met the expectations of businesses and investors to some extent.
Reducing business costs
Economists believe there is still room for Vietnam to improve the investment and business environment. In 2018, 42 percent of companies applying for business licenses in conditional business lines said they encountered difficulties when applying for the licenses.
For five years (2014-2018), the government has renewed Resolution 19 on an annual basis, reflecting its continuous efforts to improve the business environment and enhance national competitiveness. Recently, the government promulgated Resolution 139 regarding an action plan to help businesses reduce costs by at least 10 percent.
The world economy is forecast to grow 3.7 percent in 2019 with major contributions from emerging economies, such as India and ASEAN countries. Domestic and foreign invested companies, as well as the government, need to intensify efforts to take advantage of opportunities presented by global economic growth. Domestic companies should take the initiative in these efforts rather than waiting for the government’s support, while foreign-invested companies need to facilitate Vietnamese companies’ involvement in value chains.
The Vietnamese government is determined to maintain political, social and macroeconomic stability in an effort to improve the investment and business environment further. The government is also committed to accelerating institutional reforms to enhance the state’s management capacity.
Prime Minister Nguyen Xuan Phuc: “Only the business community’s success can help the Vietnamese nation realize its aspiration for prosperity in coming decades.”