Localities Tasked with Creating Favourable Business Environment

However, to further support business, positive changes and reforms need to be more drastic. In addition to commitments based on tasks in Resolution 35, provinces and cities made quantitative commitments such as business development targets to 2020, public administration reform targets for specific fields like business establishment registration, investment procedure settlement time, construction permit granting, land-use certification, tax and customs procedures, information technology, provincial competitiveness index (PCI) improvement. Time duration will reduce by 30 - 50 per cent from the current.

Particularly, on the business development goal, 63 provinces and cities registered to have 1,469,070 enterprises by 2020.

According to observations and reports from provincial/municipal People's Committees, the enforcement of Resolution 35 has produced positive changes in thinking and perception of local civil servants. Business support activities such as training, trade promotion, credit guarantee and business incubation were launched and positively appreciated by the business community.

Notably, administrative procedure reform in many localities has achieved good results. Some administrative procedures even exceeded their targets stipulated in Resolution 19/NQ-CP and commitments signed with VCCI. For example, a majority of provinces and cities reported the time required for business establishment at 2 days (1 day fewer than commitments). Some provinces even had better results with only 1.5 - 1.84 days, e.g. Dong Nai (1.84 days), Lai Chau (1.5), Hau Giang (1.5) and Ha Tinh (1.66). The time for commodity clearance in most provinces and cities met with the target set in Resolution 19 and commitments with VCCI, e.g. less than 10 days for cross-border exports and less than 12 days for cross-border imports. Some localities reported stunning outcomes like Quang Ninh (21 hours 34 minutes 12 seconds for exports and 39 hours 45 minutes 12 seconds for imports) and Ha Tinh (4 days 12 hours for imports and 1 day 12 hours 52 minutes for exports).

The public administrative centre model was replicated by many provinces and cities to reduce travel time and inconveniences for people and businesses. Quang Ninh province established public administrative centres to the district level. In addition, all localities applied the single-window and one-stop single-window mechanism for settling administrative procedures for people and enterprises.

Provinces and cities actively launched electronic tax payment declaration (mostly from 96 - 100 per cent), particularly Dong Nai, Quang Tri and Gia Lai provinces (100 per cent), Binh Thuan (99.84 per cent), Ho Chi Minh City (99.37 per cent), Can Tho (99.51 per cent), Hung Yen (99.6 per cent) and Ha Tinh (99 per cent).

Organising business - government dialogues was of great concern to many localities. They were very creative to organise dialogues with businesses such as organising dialogues for specific business types (SMEs, FDI companies by country) and opening televised dialogues. Specially, the "Coffee Business" was held in many provinces and cities to create a friendly dialogue atmosphere between the government and local enterprises to solve hard matters for enterprises.

However, according to VCCI, administrative procedure reform has yet to meet requirements and expectations of businesses and investors in spite of being well implemented. Business support, strengthened though, is yet to come up with demands of businesses. Many complained about sluggish and inconvenient administrative procedures. Many failed to abide by the request of having no more than one inspection a year as stated in the Resolution 35. Some companies reported that they had to receive 6-7 inspection visits a year, even over 10 visits, without counting informal visits. Other complained about tax software errors.

Information technology application to administrative procedure settlement in some business-related areas was still slow. A very few of online administrative procedures were categorised in Level 3 and Level 4.

Local authorities such as provincial departments and all-tier people's committees were not active enough to review and understand difficulties and obstacles to introduce concrete solutions.

According to VCCI, to make the business environment more favourable, localities must seriously respect and effectively carry out business start-up programmes.

In addition, it is necessary to diversify and create start-up support services and business development; quickly plan and build small-scale industrial clusters; promote the operation of the National Fund for Science and Technology Development; and incentivise individual business households to transform into a formal entity.

(Source: VCCI)