Business confidence has increased among foreign direct investment (FDI) companies in Vietnam, according to a survey conducted by the Vietnam Chamber of Commerce and Industry (VCCI).

LG Innotek Vietnam Hai Phong Co., Ltd  at Trang Due industrial park (Photo: baodautu.vn)

The survey, which involved the participation of 1,765 FDI enterprises in 21 cities and provinces nationwide, showed that 13.2 percent of the firms increased their investment capital and 60 percent of them plan to scale up their business operation in Vietnam, which are much higher than the 2016’s figures of 11 percent and 50 percent.

Prof. Dr. Edmund Malesky from the US-based Duke University affirmed that this is the greatest optimism in the FDI sector since 2011, attributing the results to the Vietnamese Government’s policies to reduce the burden on  FDI companies, including Decree 78/2015/ND-CP and the Investment Law 2014.

Online registration to set up business has been put forth while required documents have been slashed down. In addition, initial investment certificates were issued to FDI companies within 37 working days in 2017, as compared to 47 working days in the previous year.

Procedures for tax code registration and adjustment of investment registration certificates have been simplified as well, according to the survey.

The results of the survey also revealed that 45 percent of businesses said that they had to paid “unofficial” costs for inspectors as well as customs clearance and land-related procedures, which is lower than the rate of 50 percent in 2016.

However, Malesky said that Vietnam should make more efforts to streamline administrative procedures for foreign investors. Tax and customs procedures remain great troubles for FDI companies. Furthermore, relevant authorities should work for a long-term and sustainable improvement in the reduction of “unofficial” costs.

Dau Anh Tuan, Director of the VCCI’s Legal Department, said that “unofficial” costs may hamper new investment flows from foreign countries, particularly those who are members of the Organisation for Economic Cooperation and Development (OECD). 

Improvement in labour productivity and human resources will be among key factors for Vietnam to escape middle-income trap and capitalize on foreign investments, he added.-VNA