Hanoi has shortened the processing time for establishing an enterprise from five to three days as of January 1.

The city is Vietnam's first locality to implement this reduction. However, other localities are also required to do so under the new Law on Enterprise adopted by the National Assembly in 2014.

"The city has taken the initiative in implementing this regulation. This will help attract more investors as they will find it more convenient to establish enterprises," Deputy Minister of Planning and Investment Dang Huy Dong said.

"I am sure that the city's competitiveness index will improve remarkably thanks to this move. Enterprises are the economy's backbone and they have the right to enjoy the best business conditions," Vietnam Investment Review reported.

Trinh Thi Ngan, head of the Hanoi Small and Medium-sized Enterprises Association's Consultancy Board, expected the move to "greatly benefit enterprises," especially as they continued to face "increasing difficulties."

However, she said the department needed to "clarify procedures and business incentives" to make it easier for companies to complete the procedures.

More than 13,400 enterprises were established in the capital in 2014, equal to 96.5 percent of the 2013 figure. Charter capital totaled 98.43 trillion VND (4.7 billion USD), down 11.4 percent on the year.

Meanwhile, 735 enterprises went bankrupt, up 1.5 percent, and more than 2,400 enterprises registered to suspend operations, down 11.5 percent.

The number of enterprises changing their business type was nearly 32,300, up 28 percent. Two enterprises had their business licences revoked for submitting fake business registration dossiers.

In 2014, the city attracted 418 new foreign invested projects with a total registered capital of nearly 1.4 billion USD, up 26 percent on the year and 7.4 percent more than the target of 1.3 billion USD.-VNA