Vietnam needs reform 3.0 to further improve business environment

Following the two waves of reform in 2016 and 2018 to ensure no addition of business conditions and removal of obsolete ones, the business community now needs a third wave to get rid of overlapping regulations, according to Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI).

Overview of the workshop. Photo: Hai Yen.

“The expectation is that this could happen right in this government tenure [2006-2021],” Loc said at a workshop on the country's business environment on June 24.

According to Loc, there is a ministry reporting inaccurately that it has cut 60% of business conditions, but in fact, the number figure is only 30 – 40%. 

In the process of reviewing existing legislation related to business/investment activities, VCCI is advising the government to remove 25 overlapping provisions in legal documents, Loc said, but admitted only some of them would be removed.

Nguyen Thi Dieu Hong from VCCI’s Legal Department said the agency has conducted a survey to seek opinions from the business community regarding current regulations for business activities.

From this process, VCCI has recommended ministries and government agencies to revise 93 legal documents, 32 laws, 51 decrees and 10 circulars to address the issue of overlapping regulations that have been restricting businesses activities, Hong said.

“While it is necessary for some business activities to be licensed before operation, a major part of current business conditions empowers state agencies to interfere deeply in enterprises’ rights to freedom of doing businesses,” Hong added. This could be the case of enterprises being required to set up a distribution network or to submit business methods.

Meanwhile, some requirements for market entry remains complicated and need further simplification, as they are major obstacles for small and medium enterprises, Hong stated.

Nguyen Hoai Nam, vice general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said ministries and agencies have been slow in realizing the government’s resolutions to improve the business and investment environment.

Nam referred to the fact that in the field of seafood processing and export, some Vietnamese criteria are even more difficult to comply with compared to that of the US, indicating that government agencies are making it harder for local enterprises.

During the 2020–2025 period, the government targets to trim off and simplify at least 20% of existing business conditions as well as 20% of compliance costs from current legislation until May 31, 2020.

Ministries and ministerial-level agencies are requested to reduce as many as possible the number of legal documents setting new business conditions.

Since the beginning of this government tenure in 2016, over 3,800 out of a total of 6,191 business conditions have been simplified or removed. In addition, 6,776 out of 9,926 categories of goods subject to specialized inspection have been abolished.

The move helps save 18 million working days per year, equivalent to over VND6.3 trillion (US$270.24 million) annually.