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Tuesday, 12 Dec 2017

20/11 NEWS: Vietnam business environment

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Generally speaking, Vietnam is considered a politically and socially stable country. Vietnam seldom faces religious issues and race conflict in comparison with other ASEAN countries such as Indonesia, Philippines and China.Vietnam has achieved high GDP growth rate and has maintained political and macro-economic stability thanks to renovation policies. The successful governance of the Vietnam Communist Party over decades has been widely acknowledged. Renewal policies have gained enormous support and the transition to a market economy is still underway. In the context of recent terrorism-related events, Vietnam is regarded a safe investment destination.

 

Recently, great efforts have been made by the Vietnam government to develop private enterprises and speed up equitization of state enterprise. Private sector has been treated important and considered the driving force of the economy. The private sector gained high growth rate with increasingly large share of contribution to the state budget in the five-year plan 2001-2005. Statistics showed that non-state sector (including private sector) enjoyed the highest growth rate despite being the smallest sector. It accounted for 24,6% of the total industry production volume in year 2000, and this figure rose to 27.5% in 2003, 28.5% in 2004 and hit above 37% in 2005. In agriculture sector only, there are millions of individual enterprises, more than 120000 private enterprises and more than 71000 farms. Non-state sector’s contribution to the GDP in 2006 was estimated at 47%. State enterprises reduced from 12000 in early 1990 to about 2000 recently which means that an approximate amount of 40% state capital was equitized facilitating business operation.

Vietnams steady steps forward in international integration include expanding markets, developing trade relation with almost all countries in the world, becoming an important ASEAN member, participating in AFTA and APEC, signing bilateral and multilateral agreements and finally becoming an official member WTO. Business environment has been greatly improved to be more transparent and trade barriers have been removed for effective mobilization of internal and external resources.

Vietnam has witnessed positive change in legal environment over recent years facilitating business operations and narrowing the gap between Vietnam and other leading Asia Pacific economies. The 2005 Law on Investment which replaces the Law on Foreign Investment and the Law on Promotion of Domestic Investment is believed to unify all legal documents on investment, reduce discrimination between domestic and foreign investors, simplify investment procedures, and create favorable conditions for fund attraction and effective use of capital. This newly issued Law focuses on decentralization of granting investment license to locals for simply procedures as well as for more efficient management of the central authorities. Vietnam has also support enterprises in accessing credit for investment by expanding types of assets for mortgage. The 2005 Civil Law and the 163/2006 Decision on guaranteed transactions enables enterprises to use moveable estates – present and potential, tangible and intangible – as mortgage for loans. The Law on Securities was also issued regulating operations of securities market and the stock exchange market. In addition, investors are more protected with the issuance of new Enterprises Law which requires participation of investors in main activities of a company and public information release in related transactions.


What is more, may efforts have been made to improve the administrative procedures such as enterprises establishment, investment license granting, tax registration and settlement, legal dispute settlement, employment, etc. in order to facilitate investment.

( Source: VietnamBusiness )