Complicated administrative procedures causes many difficulties for investors
Vietnam's administrative reforms through 2015 will focus on developing coherent and consistent procedures for investment licensing, according to the government portal.
It referred to a conference held on August 23 by the Vietnam Chamber of Commerce and Industry (VCCI) and the Ministry of Justice's Managing Bureau for Administrative Procedures where many businesses complained about administrative procedures, saying they are too complicated and inefficient.
The VCCI has said based on a poll of around 8,000 companies that procedures related to land, construction, and investment are the most tortuous.
Tran Thi Bach Van, director of the Ho Chi Minh City-based Tri Tue Tourism Trading & Advertising Services Co. Ltd, said at the conference that 10 years ago her company asked to develop a tenement project in the city’s Binh Thanh District, but has yet to be done with the formalities.
“Enterprises are treated like beggars.
"If the authorities want to deal with the [papers] they will, but if they do not they just keep them there, causing us losses.”
Pham Hoang, deputy chairman of the small and medium-sized enterprises association in the Central Highlands province of Lam Dong, said in 2010 six companies invested in a 54-hectare (133-acre) ecotourism project in Lam Dong's Da Lat Town.
In 2011 they got an investment certificate and began work, but a year later authorities decided to take back part of the land to afforest it, and told them to continue their project on just eight hectares, he said.
The six investors had to give up on the project after putting in much effort, including years spending on completing paperwork, he said.
“The country's administrative procedures are getting more and more complicated.
"Public servants have taken advantage of that to cause difficulties for enterprises.
"Many foreign investors don’t want to invest in Vietnam because of such shortcomings.”
The director of a company said for a project it takes around four years from the time it is approved until it gets a license.
“If a company borrows VND40 billion (US$1.9 million) to buy a piece of land for its project and pays interest of 12 percent a year, it will lose more than VND20 billion ($945,800) in those four years of waiting,” he said.
Five years ago the Ministry of Construction studied nine real estate projects in Hanoi, HCMC, and some other cities and provinces and found that each had to go complete 33 different procedures that took an average of three years.
The ministry then said it would try to reduce the number to eight and the time frame to one year.
Recently it scrapped seven of them, and 26 remain now.
But Le Hoang Chau, chairman of the HCMC Real Estate Association (HoREA), said the seven have not actually been scrapped, merely tagged on to others.
Nguyen Van Duc, deputy chairman of HoREA, said there are around 400 guiding documents for real-estate procedures.
He blamed this on lawmakers, saying whenever there is a problem they create a new regulation to resolve it.
Pham Tuan Khai, deputy chairman of the Advisory Council for Administrative Procedure Reform, said the problem lies with officials, asking how some projects only need a few months while others have to wait for years.
The question of whether investors can go to court when an investment procedure is inappropriate and causes them difficulties should also be considered, he said.