Lao Cai: Efforts for Better Investment Environment

4:31:30 PM | 7/8/2014

Lao Cai province has always regarded investment attraction as an important task and achieved many positive results. The business environment is highly appreciated by the business community, evidenced by its top national rankings on the provincial competitiveness index (PCI) since 2006. To achieve this result, Lao Cai has endeavoured to ensure favourable conditions for enterprises to do business.
Focus on investment attraction
In the first six months of 2014, Lao Cai province issued new business registration certificates to 182 enterprises which registered to invest VND1,387 billion. As of June 30, 2014, the province granted business registration certificates to 2,460 enterprises with a total registered capital of VND15,992 billion, an average of VND6.5 billion per project. Structurally, construction companies accounted for 27.1 percent; companies engaged in trade, hotel, restaurant, tourism, consultancy, transport and services activity made up 56.2 percent of the business community; industrial companies accounted for 15.6 percent, and companies engaged in agriculture, forestry and fisheries were 1.2 percent.
The impressive growth in investment attraction is partially attributed to its favourable location. Lao Cai is an important component of the Kunming - Lao Cai - Hanoi - Haiphong Economic Corridor. Lao Cai International Border Gate is the gateway not only of Vietnam but also of all ASEAN countries with trade ties with Yunnan Province, China and the Greater Mekong Sub-region (GMS). Needless to say, Lao Cai province has made a lot of effort to improve its business environment for enterprises, as evidenced by its high provincial competitiveness index (PCI) ranking. In 2011, Lao Cai's PCI ranking reached the first in the nation.
The province is now attracting investment capital for downstream processing of minerals (apatite, iron, copper, etc.), trade and service, packaging, assembly and export-oriented production in Lao Cai Border Gate Economic Zone, particularly Kim Thanh and Dong Pho Moi industrial zones. The province is also alluring investment capital for hotel and resort projects in Sapa, new urban zones, commercial housing projects and agro-processing processing projects.
Conducive conditions created for businesses
Regarding business support mechanisms and policies, in addition to centrally stipulated regulations, Lao Cai province also has its own preferential mechanisms and policies for investors, including the agricultural production development encouragement policy, the forestry economic development encouragement policy, the industrial promotion policy, and the policy on investment incentives in Lao Cai Border Gate Economic Zone. The province also applies preferential treatments for specific projects like land rent and site clearance support and corporate income tax reduction to encourage investors to keep track of registered investment progress and enhance the capital-use efficiency.
Every year, the province reviews, modifies and supplements regulatory provisions concerning investment and business climate to facilitate enterprises and citizens to do business, effectively applies the single-window and one-stop source mechanisms and information technology to administrative procedures, publicises administrative procedures, reviews and remove cumbersome administrative procedures causing inconvenience for businesses and citizens. Specially, the province established a division responsible for receiving information from businesses, supporting them with investment procedures and advising the provincial government on solutions to investment, production and business issues facing organisations, businesses and individuals in the province.
Raising PCI
Lao Cai province’s PCI always stands in the top group. However, in 2013, the ranking fell significantly. The province’s PCI dropped 14 places to 17th out of 63 provinces and cities nationwide. Therefore, to improve the investment environment, support businesses and raise PCI next year, the Department of Planning and Investment has advised the Lao Cai Provincial People's Committee to issue the following solutions.
Regarding planning: Reviewing existing plans to propose adjustments in needed, building new plans to meet development requirements. The province will pay special attention to planning socioeconomic development, land use, resource exploitation, industrial park development, economic zone development and sector development.
Regarding organisation: Strengthening discipline in State administrative apparatus; listening to feedbacks on civil servants on duty from businesses to identify and settle bureaucratic and harassing officials; streamlining the administrative apparatus; taking employee performances and the satisfaction of partners, businesses and citizens as the measure to assess civil servants and officials; establishing business support units from provincial to local levels.
Enhancing the effectiveness of direct dialogues between the provincial government and the business community, including regular meetings between the leaders of the Provincial People's Committee with local business associations like Lao Cai Young Business Association to have optimal solutions to problems facing enterprises; carrying out the pilot district competitiveness index (DCI) project.
Lao Cai accelerates infrastructure improvement. The province continues to mobilise and allocate adequate resources for constant hard and soft infrastructure improvement to create breakthroughs in perfecting the investment environment and supporting business operations of enterprises. The province will give priority to completing transport, electricity, water and works and infrastructure systems in industrial and economic zones; and enhance human resource quality.
To cut the time required for administrative procedures, the province will review and remove troublesome, unnecessary procedures and propose the central government to amend inappropriate regulations to create the most favourable conditions and environment for enterprises to carry out their projects and do business. It will also seek solutions to reduce the time enterprises have to spend on administrative procedures, particularly those relating to business registration, land, tax, the customs and construction.

The province will ensure equal competition for businesses from all economic sectors. The province will have no discrimination to the size, ownership or source of investment capital. All companies are equally treated in all circumstances, including troubleshooting, credit access, land lease, resource access and administrative procedure.

Duy Binh