New laws to improve business environment
The National Assembly passed amended Law on Enterprise and Law on Investment in 2014. This amendment and other related laws are anticipated to have a major influence on the country's business environment.
According to Pham Dinh Thuy, Director of the Industrial Statistics Department under the General Statistics Office (GSO), the business community struggled with difficulties in the past years. This situation allowed only firms with good health to exist as well as to develop and seek new business opportunities.
Statistics showed that more than 67,820 firms were dissolved, closed down or halted operations due to the difficulties encountered last year. Approximately 58,320 stopped operation among these firms, which was 14.5 percent higher compared with the previous year.
He pointed out that the Vietnamese firms were largely affected by the global economic recession due to significant dependence on exports, low competitiveness, small business scale and the lack of human resources and technologies.
Statistics showed that up to 93.7 percent of firms dissolved were of a small scale or had capital below 10 billion VND (471,500 USD). Meanwhile, 70 percent of these firms operated in fields with low technology application.
According to GSO Director Nguyen Bich Lam, the number of dissolved firms is not alarming compared to other countries. The percentage of firms that managed to survive in Vietnam is currently at 60 percent, while that in Europe is 46 percent and the United States is 50 percent after five years of operation.
Lam said that dissolution or bankruptcy was unavoidable amidst the global economic recession, which contributed to the economic restructuring and improvement of the health of the business community.
The office's statistics also showed that more than 74,840 firms were established last year with a combined registered capital of 432.2 trillion VND (20.38 billion USD). This is 2.7 percent lower in the number of firms but 8.4 percent higher in the registered capital value compared to 2013.
The average registered capital also increased by 11.5 percent to reach 5.8 billion VND (273,500 USD) per firm.
In addition, some 15,400 firms were reported to have resumed operations this year. This number is 7.1 percent higher than the same period last year.
More than 1,027.9 trillion VND (48.48 billion USD) in total was poured into the economy in 2014.
Experts disclosed that the new regulations together with tax, customs and administrative reforms will help ensure fair competition among businesses.