The facts that business environment will be more favorable, the pandemic will be well-controlled, and demand will be more enormous are the basis for start-ups and business expansion to boom in 2021.
According to Dr. Vu Tien Loc - Chairman of Vietnam Chamber of Commerce and Industry (VCCI), in 2020, the Government's support policies for enterprises were designed to effectively support economic growth. On the one hand, the policies quickly and promptly supported enterprises and people to overcome the difficulties caused by the Covid-19 epidemic. On the other hand, these policies persistently improved the business environment to facilitate and enhance competitiveness of businesses and the economy.
However, despite making great efforts and achieving many positive results compared to other economies in the region and the world, it must still be acknowledged that 2020 is a difficult year for the Vietnamese economy. According to data from the National Enterprise Registration Information System (Department of Business Registration Management, Ministry of Planning and Investment), in 2020, there were only 134.9 thousand newly established enterprises, which is a 2.3% decrease compared to 2019, although the registered capital increased sharply by 29.2%. Meanwhile, there were 101.7 thousand enterprises suspending business temporarily, stopping operation, waiting for dissolution procedures and completing dissolution procedures – an increase of 13.9%. Such figures would be of concern in normal circumstances (without Covid-19).
In addition, even if there were no Covid-19 pandemic, most experts and organizations believe that Vietnam needs to do more to facilitate businesses in terms of starting a business, expanding a business or attracting investment. For example, according to Doing Business 2020 of WB, the index for starting a business of Vietnam ranked 115 out of 190 economies in 2020. The cause has been mentioned a lot, and it mainly lies in the procedures and interoperability of the management agencies. That creates a burden of time and cost for businesses, organizations and individuals who want to start a business. According to Doing Business 2020, to start a business in Vietnam, one may have to go through a total of 8 procedures with a period of 16 days.
In fact, there have been many positive changes in the past year. For example, Decree No. 122/2020 / ND-CP issued on October 15, 2020 clearly stipulates the coordination and continuity of business registration procedures, thereby creating favorable conditions for businesses to enter the market. This Decree has integrated many previous processes into a single process, and businesses only have to prepare a set of documents, declare a form, and perform procedures at an agency (business registration office), then wait for the results. Regulators will share information with each other on a digital platform.
According to Mr. Bui Anh Tuan - Director of the Department of Business Registration (Ministry of Planning and Investment), after implementing such reforms, the process of starting a business in Vietnam decreased from 8 procedures with 16 days to only 3 procedures with 6 days, helping to make a breakthrough in starting a business. Unfortunately, the World Bank has not published the Doing Business 2021, therefore, such reforms in starting a business have not been updated.
Narrowing the gap
What mentioned above might only be one of the positive changes showing that Vietnam’s business environment is getting more and more favorable. It is believed that there will be more improvement this year when many important laws and regulations take effect. In particular, the Law on Enterprises 2020 was passed by the 14th National Assembly at the 9th session and effective from 01/01/2021. On January 4, the Government issued Decree No. 01/2021 / ND-CP to concretize the amendments and innovations of the Law on Enterprises, thereby helping to overcome outstanding shortcomings and problems. For example, some unnecessary administrative procedures such as the announcement of the seal, notice of information change in enterprise managers, etc. will be abolished.
Resolution 02 in 2021 of the Government also emphasized on the main tasks and solutions to improve the business environment and competitiveness. Such determination and solutions will certainly have a positive impact on entrepreneurship and entrepreneurial confidence. Besides, with the not-so-good economic results in 2020 (especially the number of newly established enterprises), that Vietnam successfully controlled the Covid-19 epidemic is expected to make a boom in both production and business activities of existing enterprises, as well as increase the need to start a business.
Experts said that the proposed guidelines, policies, commitments and solutions are very appropriate, but they need to be closely linked with implementation. In other words, the elimination of the gap between undertakings, policies, solutions and actual actions is still the issue that businesses and entrepreneurs are most expecting.