Vietnam’s Economic Hub Boosting Businesses

As the most important task in 2009, Ho Chi Minh City authorities will focus on assistance to help businesses overcome current difficulties and impacts from the global economic downturn..

 

Unlike previous years, the slow growth started in September decreasing from 12.8 percent to 10.4 percent in the fourth quarter and concluding by 12.1 percent for the whole year. The industrial value in 2008 was VND410,270 billion, 12.1 percent more than 2007. Meanwhile 2007 as the lowest in five years could maintain a growth rate of 14.1 percent.

 

Consequently, without new orders, certain enterprises have cut down their workforce. While continuing to look for new markets, Vietnamese enterprises return to domestic market. However, they have to compete in their home court with foreign products of lower prices and better quality such as plastic products, garment, footwear.

 

Likewise, tourism is also affected by the world economic crisis. In the second half of 2008, many tourists cancelled their registration and the number of tourists decreased by 15-20 percent compared to the same period last year.

 

The world economic crisis and the inflation at home have strong impact on monetary policy and banking activities, reducing growth in capital mobilization and credits.      

 

HCMC authorities have met regularly and discussed with businesses on specific topic to remove their constraints. “Officials-Businesses Dialogue” has been operated efficiently at 42 offices with 164,000 loggings. Customs and Taxation Offices have also joined the dialogue in their areas. In the programme of Productivity and Quality and Plan of Action for International Economic Integration, 35 businesses have assisted in ISO 9001:2000. 5S. ISO/IEC 17025:2005, SA 8000. 131 standards and 39 certificates have been granted to such sectors as electricity, electronics, textile, leather, garment. 27 enterprises have applied quality management system. 11 businesses have registered for Vietnamese quality products award. Those activities have helped businesses to continue their performance in difficult time.

 

Foreseeing difficulties in 2009, HCMC authorities continue to give full support to businesses.

 

According to Ms Nguyen Thi Huu Hoa, Deputy Head of HCMC Planning and Investment Department, business registration will be improved in 2009, facilitating the birth of businesses. It will be “one-stop shop” with a single file for business registration including taxation and police formalities (business and tax registrations and seal) completed in five days.

 

In 2008, 19,552 new businesses have been registered, 9 percent more than 2007 while 1,554 businesses have closed down mostly small and medium sized enterprises. Many export garment and footwear enterprises have stopped their production. Therefore, the mobilization of local investments is an important task in 2009 and improvement of business registration is the starting point.

 

Together with assistance in business registration, local businesses also receive support in technology forecast, training, consultancy to increase productivity and quality. Mr. Nguyen Van Lai, Director of Trade and Industry Department added that his office will promote linkage to expand domestic market and increase efficiency of local investment projects.

 

Related authorities of the city will apply reduction and postponement of income taxes. Accordingly, income tax will be reduced by 30 percent in the fourth quarter of 2008 and in 2009 and postponed for the rest of 70 percent. It will help businesses get rid of complicated and time-consuming formalities.