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Enterprises feel ‘insecure’ about business conditions

Reform has not pursued the wishes of enterprises and the actual situation. This is why businesses feel insecure.

A report, "Business Law Flow 2021", published by the Vietnam Chamber of Commerce and Industry (VCCI) in late March, shows that in 2020-2021 all ministries and sectors made plans to reduce necessary procedures for enterprises. 

However, these plans mainly focused on removing business registration certificates, identity cards, citizen identification or requirement to provide personal papers and documents; changing the method of carrying out procedures on the online public service portal, or by electronic means; and simplifying administrative procedures to reduce the number of documents, shorten implementation time. 

Most of the plans did not mention the amendment and abolition of conditional business investment lines.

Meanwhile, according to the "Provincial Competitiveness Index (PCI) 2021" report, released by VCCI in late April, the percentage of businesses that agreed with the advantages during the conditional business license granting process did not exceed 60%. That means there was a high rate of businesses that were not satisfied with these licensing administrative procedures. 

Difficulties in granting conditional business licenses are why 21.7% of businesses had to delay or cancel their business plans in 2021, VCCI said.

Dau Anh Tuan, Head of VCCI's Legal Department, said there is a worrying trend as many draft legal documents are revised in the direction of tightening business conditions. For example, the amended decree on rice exports proposed by the Ministry of Industry and Trade includes regulations on the scale of warehouses. The revised Decree 15 on food safety guidelines of the Ministry of Health gives more power to the management agency, moving many processes from post-inspection to pre-inspection.

Many circulars issued by ministries are flooded with regulations on business conditions. According to the Law on Enterprises, circulars are not allowed to issue business conditions. However, it is not difficult to find circulars that still regulate business conditions. The rampant promulgation of business conditions in circulars creates a less favorable investment and business environment.


VCCI has asked the Ministry of Planning and Investment, which is assigned by the Government to review the law and policies on business, to pay special attention to the task of perfecting consistent mechanisms and policies, creating a favorable business and investment environment for private development. 

According to VCCI, it is necessary to review, supplement and improve legal provisions that are no longer appropriate, are overlapping, or are incomplete to remove bottlenecks in the development of the private economy. There must be a mechanism to more effectively control the quality of draft legal documents on investment and business and current policies.

Regarding regulations on business conditions, during the process of compilation, it is necessary to have comments of the Ministry of Planning and Investment and relevant agencies.

Ms. Nguyen Minh Thao, from the Central Institute for Economic Management (CIEM) under the Ministry of Planning and Investment, said that conditional business lines have been reduced in number but actual effectiveness has been modest. 

Reform has not pursued the wishes of enterprises and the actual situation. This is why businesses feel insecure.

According to experts, to become a developed and high-income country by 2045, Vietnam must rely on the private economy. To have a powerful private sector, Vietnam must have a good business environment. 

However, the mindset of prioritizing state management by setting "business conditions" has created barriers, leaving a less open business environment. This affects business activities and the goals of restructuring the economy towards a more modern and dynamic direction.

Tran Thuy


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