Hanoi Pioneers Improving Business Environment

5:10:35 PM | 5/12/2016

The Hanoi People’s Committee hosted the Business Dialogue Conference 2016 on November 28 to seek solutions to deal with difficulties facing businesses and shape directions for bettering the investment and business climate, and supporting business development in 2017.
Mr Nguyen Doan Toan, Vice Chairman of the Hanoi People's Committee, said, Hanoi achieved encouraging socioeconomic development results in various aspects like economic stability and development balance. The city’s gross domestic product (GDP) was estimated to expand 8.03 per cent this year, the highest growth since 2011. The State budget revenue was projected at VND173.84 trillion, 2.6 per cent higher than the estimation. Inflation was controlled and consumer price index was estimated to stay in the range of 3.01 - 3.07 per cent in 2016.
Businesses have played a decisive role to the city’s development. The capital will have 22,900 new companies in 2016, up 19 per cent from last year. For the first time, it has more than 200,000 active companies.
Nevertheless, Hanoi also met with difficulties. Corporate bankruptcies/operational suspensions reached 13,165 companies as of November 9. Export grew slowly. The city faced certain difficulties in applying advanced technologies and techniques to agricultural production, while its production link chains were weak. Quality-guaranteed agricultural, forestry and seafood production have not met consumer demands. Industrial growth slowed down.
In the spirit of accompanying and supporting the business in every circumstance, Hanoi resolutely directed relevant bodies to improve the investment and business environment, tackle emerging issues, and expanding production and business operations. Specifically, the city has adopted several measures to raise the provincial competitiveness index (PCI) by bettering the investment and business climate and supporting corporate start-ups. The city established a steering committee with the function of assisting local businesses to have stable, effective and continuous operations. Hanoi requested all administrative units to make public all administrative decisions, policies and procedures as well as planning like sectoral development planning and land-use planning. Hanoi has built a scheme to support the development of business start-up and business innovation with the aim of having 200,000 more companies in the 2016-2020 period.
Applying information technology and building e-government is seen as a breakthrough stage for development. Business-related works like business registration, tax registration, customs and social insurance are top priorities for change. The time for online business registration has been reduced from three days to two days since June 1 to enable companies to quicken their market entry. To date, up to 54 per cent of the business registrations have been settled online and over 98 per cent of companies declare and pay taxes online.
Hanoi has carried out many mechanisms, policies and methods to deal with difficulties emerging from site clearance and land compensation; build resettlement areas, socialise water supply in rural areas and environmental treatment, and socialise underground power grid and telecom line construction.
The city has also widened access to credits for enterprises as up to 80 per cent of active companies are disqualified for credit loans. Hanoi has actively deployed the bank - business connection programme for this purpose. The outstanding loan of the programme is expected to reach VND225.1 trillion as of December 31, 2016, up 3.69 times over the end of 2015. Preferential interest rate was 4-4.5 per cent per annum.
Hanoi has focused on supporting businesses to deal with their problems emerging from tax, customs, and social insurance, which are closely linked to their operations. The Provincial People’s Committee has directed the simplification of 61 administrative procedures on land to shorten the required time by 30-50 per cent (compared with regulation), provided legal advice and information in addition to training high quality human resources and facilitating international economic integration. In 2016, more than 70,000 people got consultancies concerning business start-up, project establishment, business registration, corporate dissolution and economic integration.
Hanoi has also provided investment and trade promotion support. As a centre of education and training, Hanoi is able to supply world-class personnel for enterprises, thus helping them reduce training and recruitment expenses and enhance business satisfaction with labour quality.
Bao Chau