People apply for business licenses at Ho Chi Minh City's Department of Planning and Investment. Photo credit: Tuoi Tre
It will become a lot easier to start a company in Vietnam when new law amendments take effect next month, abolishing thousands of business requirements.
The amendments to the Law on Business and the Law on Investment are set to remove 3,299 legal requirements for businesses, or around half of all existing prerequisites, local media quoted the Minister of Planning and Investment's announcement at a government meeting on Monday.
The requirements to be rid of have been found in decisions issued by ministries and local governments.
Under a new rule, only the central government can decide on which conditions businesses have to meet, Minister Bui Quang Vinh said.
Vinh however noted that it may take agencies one year to review all the regulations before the unnecessary business requirements are removed in practice.
He said simplifying business and investment rules are "vital to improving Vietnam's business environment," the minister commented on the government's latest move.
Vietnam has achieved "encouraging" results in improving business environment and national competitiveness since March last year, thanks to two decrees issued by the government, Vinh reported.
For instance, it now takes 17 days to start a business in Vietnam, compared to 34 days before.
During the start-up process, the time to acquire a business license has also been reduced by half to three days.
Meanwhile, businesses spent 335 hours a year paying taxes, instead of 537 hours like before, according to the minister.
Vietnam ranked 68th out of 144 economies on a global competitiveness index released by the World Economic Forum in September last year.
Although it was two places up from its position in 2013, the country still performed poorly, when it came to the burden of government regulation and transparency of government policymaking, for which it ranked 101st and 116th, respectively.
In fact, policy instability and inefficient government bureaucracy were among top 10 problematic factors for doing business in Vietnam, according to the report.