VietNamNet Bridge - Half of total business and investment necessary preconditions have been eliminated under a Ministry of Industry and Trade (MOIT) decision, praised as a historic move that aims to create favorable conditions for businesses.

MOIT eliminated 675 business and investment requirements, or 55.5 percent of the total preconditions for 27 business areas. With the move, the number of remaining conditions is 541 instead of the expected 752.

Economists and the business circle applauded the decision, saying this is good news for Vietnam’s business environment reform.

“Anh (MOIT’s Minister) was very decisive in this issue. I believe that if other ministries follow the same approach, Vietnam will be able to make big leaps in reforming its business environment,” VCCI’s legal department director Dau Anh Tuan said.

MOIT eliminated 675 business and investment requirements, or 55.5 percent of the total preconditions for 27 business areas. With the move, the number of remaining conditions is 541 instead of the expected 752.

After CIEM (the Central Institute for Economic Management) and VCCI (Vietnam Chamber of Commerce and Industry) announced survey results which showed that businesses complained about too many required business conditions, MOIT analysed the results and accelerated reform.

Nguyen Dinh Cung from CIEM called this a ‘historic decision’, which had never occurred because no ministry and watchdog agency has proposed removing business licenses. 

He said that MOIT’s decision will be both pressure and encouragement for other ministries to take the same action.

“As MOIT has cut a high number of 675 business preconditions, the removal of 10 or 15 more won’t matter,” Cung said.

In an interview given to a local newspaper, he said Vietnam has no other choice except the reforming of the business environment in order to mobilize more resources from society.

Cung is well known in Vietnam as one of the compilers of the Enterprise Law which pursues the principle that ‘businesses can do what is not prohibited by law’.

Pham Chi Lan, a respected economist, said that business conditions and the ask-and-grant mechanism have been ‘eroding the strength and enthusiasm’ of businesses for  years’.

However, many things will need to be done to implement the MOIT’s plan.

Nguyen Quang Dong, an independent expert on public policy, said it is necessary to continue the reform to maintain the achievements. If there is no institutional reform associated with the elimination, business conditions will be re-established in the future.

Meanwhile, Lan noted that though MOIT has cut a high number of business preconditions, it still maintains over 500 others. She believes the ministry should consider removing more conditions which are unreasonable and unnecessary.

In related news, the Ministry of Planning & Investment (MPI) has submitted to the government a plan to remove more than 2,000 business conditions.

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