Apr 02, 2018 / 17:12

FDI firms remains concerned about administrative procedures

The Hanoitimes - There has been significant improvement in removing cumbersome procedures in the past year, however, foreign businesses are still concerned about legal provisions regulating operations of investors after having registered and receiving licenses.

Twenty nine percent of foreign firms said that customs are costly
Twenty nine percent of foreign firms said that customs are costly
According to the report on Provincial Competitiveness Index (PCI) released recently by the Vietnam Chamber of Commerce and Industry (VCCI), FDI firms supposed that administrative procedures are still the most cumbersome. Specifically, 28 percent of the surveyed firms said that tariffs are still troublesome and 29 percent of firms said that customs are costly to foreign investors, followed by social insurance.
According to FDI firms, legal provisions regulating the market penetration such as business registration and investment licensing was improved thanks to the Law on Businesses and the Law on Investment effectively from 2014.
The above mentioned results were thanks to the fact that Vietnamese government has continued carrying out many measures to reduce the burden of regulations on FDI firms. Specifically, in February 2017, the government issued Resolution No.19/2017/NQ-CP on continuous implementation of major tasks and measures to improve business environment and national competiveness in 2017 with orientation to 2020. The resolution outlined specific measures related to business environment, competiveness, renovation and e-government. 
In May 2017, the prime minister issued Directive No.20/CT-TTg on reorganization of inspection activities to avoid overlapping and unnecessary inspections which hinder the operation of businesses. 
With these new measures, the burden of provisions after entering the market has significantly reduced.
Accordingly, the proportion that FDI businesses had to spend more than five percent of their leaders’ time budget on studying and implementing administrative procedures decreased from 72 percent to 66 percent. 
In addition, firms that had to receive eight investigation delegations or more each year has fallen from 4.6 percent to 3.4 percent. 
According to VCCI, although it is still too early to come to a conclusion, measures to reduce administrative regulation burdens for businesses after entering the market is gradually showing effectiveness.
Most noticeably, improvements in regulations on market entry recorded in PCI report in 2016 continued to be maintained in 2017. The government’s efforts in the regulation of inspection activities in 2017 seemed to have immediate impacts.
To continue easing businesses, the Prime Minister’s working group will closely inspect ministries to find out cumbersome procedures and unnecessary business conditions hindered firms’ development, targeting to remove them before June 30 this year.
He said that monthly inspections with at least four administrative units from the central to local level are a must. Reports on ministries’ administrative reforms will be submitted to the Prime Minister, with the next minister-level inspection starting from March 15.
The government will sit with ministries to discuss the June 30 deadline, and will also invite businesses and industry associations to revise legal documents regarding business permits and inspection reductions beforehand, he said.
Representatives from ministries also reported their plans for the reduction of cumbersome specialized inspections and unnecessary business conditions. The Ministry of Transport, for example, announced that it would cut 282 business conditions regulated in 20 decrees under its authority next time.
According to the government, the ministries will have to cut 50 percent of goods subject to special inspections under their authority. Another 50 percent reduction in specialized inspection procedures must be also applied. 
Currently, the Ministry of Agriculture and Rural Development has the highest number of 7,698 goods subject to special inspections under its authority. The numbers for the ministries of Health, Information and Communications, Natural Resources and Environment, and Transport are 802, 143, 110 and 128, respectively.