SME Assistance Law Needed

At the meeting of SME Promotion Council 2015 held recently in Hanoi, Deputy Minister of Planning and Investment Dang Huy Dong said that 2015 is an eventful year, year of enterprises, year of several free trade agreements, and also a banner year to review both achievements and shortfalls in 2011-2015 so as to map out socio-economic development plan for 2016-2020.

 

Also in this pivotal year, the government’s plan of action will focus on main objectives to stabilise macro-economy, dismantle constraints and improve business environment so as to increase growth and ensure social welfare. A series of vigorous policies by the government in 2014-2015 have improved business environment and removed constraints. For instances, solutions on taxation have facilitated the development of businesses. Those strategic moves showed the determination of the government and concerned authorities to boost confidence among business community in their endeavours.

 

According to Ministry of Planning and Investment (MPI), in 2014, as many as 74,800 new enterprises registered with total capital of some VND432 trillion (on average of VND5.8 billion/enterprise), 2.7 percent less in number of enterprises but 8.4 percent more in registered capital compared to previous year. In the first 8 months of 2015, there were 61,300 newly established enterprises with registered capital of VND376,400 billion (average registered capital increased by VND6.2 billion/enterprise), 29.2 percent more in number of enterprises and 29.9 percent more in registered capital compared to previous year. Those figures show the joint efforts of businesses and government to increase the prosperity and competitiveness in the context of globalisation.

 

According to Deputy Minister Dang Huy Dong, among others, Resolution 19/NQ-CP of March 18, 2014 of the government is the main improvement of business environment and national competitiveness. In addition, in March 12, 2015, the government issued Resolution 19/NQ-CP on main tasks to continue the improvement of business environment and national competitiveness in 2015-2016 with the objectives of improving business environment, acceleratingadministrative reform, shortening processing time and minimizing documents, saving time and money. Comprehensive reform on business activities and management includes import-export of goods and services by post check.

 

In addition to Resolutions, with recommendations by related authorities, the government also issued several new laws improving the legal framework and business environment, increasing competitiveness and reducing discrimination among business sectors. For examples, the Enterprise Law enforced on July 1, 2015 has streamlined from 10 to 5 formalities for new start-off businesses, reducing processing time from 34 to 17 days and registration to 3 days instead of 6 days.

Regarding conditions required for business activities, MPI in conjunction with related authorities have reviewed and recommended the Prime Minister to terminate all previous regulations issued by ministries and local authorities. Consequently 3,200 out of 6,475 conditions imposed on 267 businesses activities will be abolished by July 1, 2016.

 

However, according to Mr Dang Huy Dong, in spite of positive development at local level, nation-wide support for SMEs remains unrealistic and disconnected in many localities, and most importantly failing to keep in steps with the development of SMEs. For its part, MPI has recommended the government to promulgate a SME assistance law with cohesive and feasible clauses to develop SMEs. Besides, support should be extended to SMEs having potentials for export, innovation and value chains, assisting them with start-off, promoting products as well as funds to develop SMEs.