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Dinh Vu

Local Economy

Last updated: Monday, May 21, 2018


HCM City Accompanying and Serving Businesses

Posted: Saturday, April 15, 2017

With the standpoint that “The government facilitates and serves businesses", Ho Chi Minh City has made a lot of positive improvements in investment and business environment. Vietnam Business Forum Magazine has an exclusive interview with Mr Nguyen Thanh Phong, Chairman of the People's Committee of Ho Chi Minh City, on this topic, marking one year since the city government signed an agreement with the Vietnam Chamber of Commerce and Industry (VCCI) on creating a favourable business and investment environment for businesses at the Prime Minister's Meeting with Enterprises in 2016. My Chau reports.
Could you please introduce new points in the Commitment on formation of a favourable business and investment environment for enterprises signed by Ho Chi Minh City and VCCI?
Creating a favourable investment and business environment for enterprises has been a policy of Ho Chi Minh City for many years. Its commitment to VCCI aimed to better carry out its policies and reconfirm its goal of “placing businesses at the heart of development, with business and for business.” The commitment includes a number of breakthrough solutions from tax, customs, land, administrative procedure, trade promotion and investment stimulus. It particularly stresses State roles in facilitating and serving enterprises, ensures equal rights to access to resources for all enterprises irrespective of their ownership forms and sectors. They have the right to freely do business in areas not prohibited by the law, and economic and civil relations are not criminalised. A very important point of this commitment is the focus on building and developing a powerful Ho Chi Minh City business community towards the world class and promoting entrepreneurs’ roles in the period of accelerating industrialisation, modernisation and international integration.
So, after a year of great efforts in carrying out the commitment, what results has Ho Chi Minh City achieved?
Arguably, the commitment has inspired each and every local agency and unit and penetrated more deeply into every cadre and civil servant, particularly those with direct exposure to business. With enabling policies “for business and with business”, the city’s investment environment is more open than ever and engages all economic sectors to do business. The clearest result is the record number of new business start-ups in 2016 - 36,500 companies founded, accounting for 34 per cent of new companies in the country and 30 per cent of registered capital. Ho Chi Minh City was ranked second in the CMI rankings on 10 most dynamic cities in the world recently announced at the World Economic Forum 2017 in Davos, Switzerland. The dynamism of Ho Chi Minh City exceeded Silicon Valley, the United States (the third in the rankings). In addition, among the 100 best places of work in Vietnam in 2016 according to Anphabe Career Network, most of them are Ho Chi Minh City-based businesses.
However, from a different perspective, the city is also facing huge challenges of development process: Most are small businesses (98 per cent have business capital of less than VND100 billion); investment and business operations are unsustainable; and the rate of bankruptcy is still high (10 per cent companies dissolved). The implementation of the commitment is yet to come up with expectations because what businesses are more than the scope of commitment.
The Prime Minister has issued Resolution 35/NQ-CP dated May 16, 2016 on business support and development to 2020. What do you think about this resolution?
Resolution 35 states that Vietnam will have one million operating enterprises by 2020, including many powerful, influential entities. The private sector will contribute about 48 - 49 per cent to the GDP and 49 per cent of total social investment. This is considered a “new blow of wind” in policymaking in support of comprehensive business development.
The resolution is highly appreciated by the business community for the content that the State enables, serves and facilitates enterprises to make investment and do business. Notably, the ruling provides that authorities shall not inspect businesses more than once a year. In my opinion, this is the most important highlight of Resolution 35.
 What will Ho Chi Minh City focus in the coming time to carry out Resolution 35 of the Government and the commitments with VCCI and further improve the investment and business environment to stimulate business development?
Business community is the heart of the economy and business growth is a driving force of development. Therefore, no matter how hard it is, Ho Chi Minh City will also create favourable conditions for businesses to grow in the home market. The city will urgently form a start-up eco-system and establish a one-stop single-window working group responsible for reviewing domestic and foreign investment projects. The inter-agency working group is responsible for completing all procedures until a project is executed and the business only needs to file applications and wait for results at the working group instead of going to any other unit and agency. The city will be the bridge for enterprises to connect with central authorities and other provinces/cities throughout the country (even overseas investment); create a 1,000 ha of clean land fund for domestic and foreign investors; and arrange State-funded capital and interest rate to repay credit institutions. In addition, Ho Chi Minh City will focus on reviewing, shortening processing time and reducing unnecessary processes; applying information technology to administrative bodies from municipal to grassroots levels; and build e-government and smart city.
We believe that, with its dynamic and creative tradition and approach for the people, “with business and for business”, Ho Chi Minh City will be increasingly attractive to all economic sectors. This will be an ideal and successful place for start-up.

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