BUSINESS ENVIRONMENT IN VIETNAM - TriMinh Law

BUSINESS ENVIRONMENT IN VIETNAM

9:34:54 27/04/2016
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BUSINESS ENVIRONMENT IN VIETNAM

In recent years, business environment in Vietnam has gained a significant progress which is recognized by community of international sponsors. However, under the ranking of annual Doing Business Report by the World Bank, Vietnam’s business environment index is 78/189 in 2015, falling 6 ranks in comparison to the one of 2014, albeit the implementation of several reforms basing on this index. According to the assessment of World Bank, national data is aggregated from 2013 to the middle of 2014 for the performance of evaluation, ranking in 2015. Thus, the rank in 2015 shall not reflect the policy effort in 2014 and by the latency of 2 years, Vietnamese revolutionized reforms in the year 2014 will only be recorded in the rank of 2016. Nevertheless, these results also show that Vietnam Government shall continously and constantly improve quality, effectiveness of policies on business environment, simultaneously promote communications of Vietnam’s accomplishments to the international community.

Overview-about-Laws-in-Vietnam

The Government and synchronous solutions for improvement of business environment

In fact, Vietnam Government, in recent years, has made endless efforts to enhance the business environment of Vietnam, advance the competitive ability of Vietnamese enterprises. In March 2014, the Government enacted resolution No. 19/NQ-CP on missions, solutions for improvement of business environment, promotion of national competitive ability with specific measures in short and mid terms. Concurrently, the Government has also steered to perform drastically synchronous solutions, especially administrative procedure reforms on taxes, customs, social insurance, construction and land licenses, power access, establishment, dissolution of enterprises, investment procedures and so on. Some remarkable results achieved:

Promulgated and amended, supplemented many legal documents to revolutionize, simplify administrative procedures on tax and resolve difficulties for enterprises. In 2014, enterprises carrying out electronic tax declaration increased from 65% to 95%; time of tax payment reduced by 290 hours, from 537 hours to 247 hours per year. Besides, with the Law on taxes (amended) coming into force from 01 January 2015, time of tax declaration reduced by 80 hours, from 247 hours to 167 hours per year (less than the average 171 hours per year of ASEAN-6)

Reviewed, simplified administrative procedures and officially performed the one-stop shop mechanism in international seaport to decrease clearance time of imported, exported goods from 21 days in average to 13 days and 14 days respectively. Under reports of the Ministry of Finance, applying one-stop shop mechanism to national customs saved 10-20% of fees and 30% of clearance time of exported, imported goods.

Shortened procedures on social insurance, establishment and dissolution of enterprises, power access. Submission time of social insurance decreased by 100 hours, from 335 hours per year to 235 hours per year. Execution time of administrative procedures on establishing, dissolving, re-organizing enterprises are haft of those in former law. Time of enterprise dissolution decreased to 180 days. Time of power access is reduced from 115 days to 70 days.

Governmental determination to improve the business environment has clearly been recognized in provisions of the Law on Enterprises and the Law on Investment passed in the 8th session, Congress XIII.

In these two new laws, several regulations have been adapted and replaced to transform enterprises into cheaper and more secured business instruments. Enterprises, accordingly, may attract investments and mobilize social resources to serve their manufacture and business activities. The new Law on Enterprises countinues facilitating enterprise establishment procedures, eliminating requirements on business conditions at the moment of establishment registration; regulating that enterprises shall be dissolved automatically after 180 days from the date of dissolution decision; strengthening measures to protect shareholders of joint-stock companies; acknowledging social enterprises. The new Law on Investment has also possessed more “opened” and simplified provisions on investment procedures, , reduced licensing time, restructured the list of banned and conditional business lines to follow the spirit: “everything, which is not forbidden, is allowed”. These basic changes is the background to complete the free business right of enterprises in accordance with Constitution 2013.

Legal reforms stick to improvement of technological infrastructure

Beside the above-mentioned legal reforms, developing technological infrastructure for the transparency of market information is also carried out positively by the government. In recent years, the establishment of the National Enterprise Registration System is an outstanding point of the reformation. The Entire business registration process has been computerized, which reduces time of enterprise registration to three (03) working days. In conjunction with the System establishment, State’s management bodies have also finalized the National Enterprise Registration Database containing original legal information of 800,000 enterprises. Having a full database on enterprises is a substantial achievement of Vietnam. This is the initial stage in the process of publicity and transparency of enterprises’ information in the market, contributing to ensure the State’s management and facilitating the access of information by the community in a more updated way.

For better information approach by enterprises, the Ministry of Planning and Investment established National Business Registration Portal providing basic public services such as: online enterprise registration, electronic announcement, provision of information on enterprise registration. Besides, the Portal also posts documents supporting enterprise registration, updated legal documents on enterprise registration, systemizes the list of conditional business lines allowing users to refer to these business lines and their conditions. Users can also search names and other basic information of enterprises, as well as refer to frequent difficulties that enterprises may face in enterprise registration process. Hitherto, the Portal has got millions of accesses and hundreds of thousands of online service demands.

In brief, the effort of Vietnam Government in recent years is relatively comprehensive and some significant accomplishments, therefore, have been achieved. These results along with the attempt of enterprises shall create positive shifts in Vietnam business environment. The enterprise community shall always be the fundamental motivation to promote the economic growth and an active, developed business environment can only be constructed on the basis of an active community.

 

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