Stepping up Administrative Procedure Reform

4:51:26 PM | 9/19/2014

Prime Minister Nguyen Tan Dung recently worked with the Ministry of Planning and Investment to address pressing issues in the reform of administrative procedures in business establishment, dissolution and investing.
Report to Prime Minister Dung, Minister of Planning and Investment Bui Quang Vinh said Vietnam has set up a single-window mechanism in receiving and resolving business establishment documents. The single-window mechanism has helped significantly reduce the time for completing three basic market entry procedures form 32 working days (before 2005) to a maximum of 5 working days (from 2008 to present). Particularly, the time for tax code granting is two working days and the time for business registration is three working days. Besides, scientific, technological and information technology application has improved the efficiency of business establishment procedures and State management over business registration. In 2010, the national business registration information system was established to electronically connect business registration and tax code registration. Besides, according to a new provincial competitiveness index (PCI) survey by the Vietnam Chamber of Commerce and Industry (VCCI), the satisfaction of the Vietnamese business community in business registration ranked first. This index kept rising since 2006 and reached 8.59 points on a 10-point scale in 2013.
But, Minister Vinh also reported existing shortcomings in business service from start-up to bankruptcy to Prime Minister Dung. At present, enterprises are allowed to do business in the scope written in their investment registration certificates but this regulation tramples on the principle “Enterprises are allowed to do all business that the laws do not prohibit.” Other existing shortcomings included late reply to registration results, poor responsibility and ethics of civil servants at the service.
Hence, to enhance performance and efficiency of businesses, Minister Vinh put forth some measures like abolishing procedures for granting investment certification for all domestic investment projects, simplifying investment certification procedures for foreign investors, simplifying land-lease procedures, and completing investment management decentralisation. The Ministry of Planning and Investment also suggested measures to reduce the time for start-up procedures with employment, social insurance and seal granting procedures from 16 days to five days, equivalent to OECD countries (5 days) and shorter than Asia - Pacific countries (7 days), ASEAN plus China and Timor Leste (9 days).
Also at the meeting, opinions from the Ministry of Finance, the Ministry of Natural Resources and Environment, the Ministry of Industry and Trade, the Ministry of Construction, the Ministry of Justice and the Ministry of Public Security showed that more procedures relating to business may be reduced or abolished if the further review is performed. Their suggestions include using company codes as unique codes for enterprises; using digital signatures in lieu of seals (410,000 digital signatures have been granted, compared with 485,000 businesses in operation); purchasing invoices in one day as stipulated in the Decree 51; abolishing excise tax; removing the regulation on invoice purchase and tax payment on house lessors (the country has 85,000-90,000 house lessors); reducing land-related procedures and processes; reducing the time for electricity access and connectivity (down from 132 days to 37 days), shorting the time for construction license (from 190 days to 45 days).
After listening to opinions from relevant authorities, Prime Minister Nguyen Tan Dung appreciated the Ministry of Planning and Investment for the strong progress in administrative procedure reform in business start-up, registration for changes in business certificate, corporate dissolution, investment certification, and investing activities. He also commended proposals from relevant ministries for the reform of administrative procedures to better serve businesses. He noted that reform does not mean to remove State management roles but to facilitate businesses and citizens to invest and do business. Reform is to realise the ideas of the Constitution that people are allowed to do everything that is not prohibited by laws, he emphasised.
He asked the Ministry of Planning and Investment, as a lead coordinator in business affairs, to work with relevant ministries and branches to review all institutions related to registration business, business certificate change registration and corporate dissolution to reduce the time required for these procedures by a half within 2014, specifically from four days to two days. He also requested other ministries and branches to simplify administrative procedures within their authority like trade union establishment and invoice procedures at the Ministry of Finance; seal carving, seal registration and fire prevention procedures at the Ministry of Public Security; electricity connection procedures at the Ministry of Industry and Trade; environmental impact assessment procedures and land registration procedures at the Ministry of Natural Resources and Environment. Unnecessary procedures will be removed. In case, procedures cannot be abolished or simplified, the time for doing them must be shortened.
Prime Minister Nguyen Tan Dung affirmed that if Vietnam wants to accelerate national industrialisation and modernisation, it must integrate into the world economy and improve the investment environment to attract businesses and enhance competitiveness. Specifically, we need to focus on three breakthrough stages: Improving socialist-oriented market economy, with the focus given to creating an equal competition environment and reforming administration; developing human resources; and; building synchronous infrastructure.
Anh Phuong