Enterprise, Investment Laws breathe new life into business environment

Hanoi (VNA) – With an extensive reform spirit, the Law on Enterprises and the Investment Law, which took effect on July 1, 2015, have breathed new life into the country’s business environment, as seen in the remarkably increase in the number of enterprises and investment.

According to the Department of Business Registration Management under the Ministry of Planning and Investment, during one year after the launch of the two laws, nearly 106,000 new firms were established with total capital of nearly 768 trillion VND (36.5 billion USD) or an average 7.25 billion VND each company.

The figures represented increases of 27.8 percent in the number of enterprises, over 42 percent in total registered capital, and 11 percent in the average capital per one enterprise.

At the same time, 23,950 companies injected more capital with total additional investment of 690 trillion VND.

Bui Anh Tuan, head of the department, said that the sharp increase in the number of new enterprises showed positive impacts of the two laws thanks to their strong renovation regulations, which he described as a “liberation of the right to business freedom”.

He pointed out that one of the considerable changes brought about by the laws is the shorter time taken for receiving and processing business registration in localities. In Ha Tinh, the duration was cut down to one day, while that in Tien Giang is 1.3 day, Hau Giang 1.32 day and Da Nang 2.52 days, compared to the national average of 2.9 days.

According to Le Xuan Hien, head of the Business Registration Management office under the Department of Planning and Investment of northern Hai Duong province, the laws pushed local officials to change their mindset from managing to serving enterprises, while encouraging and facilitate startups.

The Department of Business Registration Management held that along with better attitude of officials, the laws have also helped enhance the transparency of the process for establishing enterprises.

However, the department also pointed out a number of problems during the implementation of the Investment Law, particularly the inconsistency between the law and legal documents issued before it.

Vu Ngoc Diep, Director of the Vietnam Price JSC, said that his firm has faced many problems in cooperating with foreign partners as the investment licence granting procedures for foreign companies remain complicated and time-consuming.

Head of the Central Institute for Economic Management (CIEM) Nguyen Dinh Cung also asserted that the big gap between policies and enforcement of laws on business and investment has resulted in below-expectation effectiveness of the laws.

Phan Duc Hieu, CIEM Vice Director was of the opinion that the contradiction and overlap among legal documents delay law enforcement and worry enterprises.

He suggested that the process of granting business licence should be aligned with the Law on Enterprises regardless of types of business areas and investors, citing a problem that in certain business areas such as the stock market, insurance, judicial verification, legal services and notary, companies operate under the Law on Enterprises while applying for business registration under separate regulations and at other agencies than those stipulated in the Law.

Meanwhile, Deputy Minister of Planning and Investment Dang Huy Dong remarked that the surge in the number of newly-established enterprises does not reflect the quality and efficiency of the firms in the market. Stronger competition is an obvious trend, he said, adding that business opportunities will continuously appear and change, creating challenges for businesses and requiring them to improve their adaptability, flexibility and renovation capacity.

This is also the reason why laws and legal documents must be refined to suit reality, he stressed.-VNA