AsemconnectVietnam - For foreign investors as well as foreign businesses doing business in Vietnam, the business environment and administrative procedure reform are important factors in deciding to continue investing and expanding scale.

The latest survey on the Business Confidence Index (BCI) of the European Chamber of Commerce in Vietnam (EuroCham) showed that the level of satisfaction of European businesses in Vietnam has increased significantly with a a high percentage of businesses rated the prospects as "excellent" or "good" for the business situation in the first quarter of 2024; 31% of businesses plan to expand their workforce and 34% intend to increase investment.
Through many quarters of EuroCham's BCI index survey, Vietnam has always been rated as one of the top global investment destinations, with a fairly high percentage of businesses even rating Vietnam in the highest position.
Fitch Ratings - an international credit rating organization, has upgraded Vietnam's national credit rating to BB+ with a stable outlook, and emphasized that Vietnam has an advantage in attracting FDI thanks to its economic positive outlook.
Recently, Nestlé Vietnam (a 100% FDI enterprise, part of Nestlé S.A. Group headquartered in Switzerland) announced an additional investment of 100 million USD to double the processing capacity of coffee lines with high quality to mêt domestic consumer demand and effectively exploit export potential, making Vietnam a center for supplying high-value coffee to the world.
However, European businesses also pointed out challenges and barriers to administrative procedures in the business environment in Vietnam. In particular, more than half of the businesses surveyed said that administrative burden and ineffectiveness of the apparatus were one of the top three barriers. Along with that, businesses also point out limitations from unclear and differently interpreted rules and regulations, emphasizing the need for clarity and consistency in the legal framework.
Previously, from the end of 2023, the Japan International Cooperation Agency (JETRO) also conducted a survey of the current situation of Japanese businesses abroad, in which many Japanese businesses expressed confidence in the development of Japanese businesses abroad as well as business prospects in Vietnam in the near future. Forecasting business profits in 2024, more than 50.4% of Japanese businesses expect to "improve". However, JETRO's leadership representative still recommends that Vietnam needs to gradually improve the investment environment, in which the Government needs to improve the efficiency and transparency of administrative procedures and infrastructure development, as well as training human resources.
In fact, the issue of administrative procedures or business environment barriers has been mentioned many times by businesses and business associations in the FDI sector in Vietnam. For example, some administrative procedures related to fire prevention and fighting still have problems, and there are differences in understanding and implementation, affecting the time it takes to bring completed FDI projects into operation work. In addition, many foreign businesses still encounter problems with licensing procedures for workers, land, resources, renewable energy, environment, etc.
Increase attractiveness by strengthening the business environment
Not long ago, commenting on attracting opportunities from Vietnam and the United States upgrading their relationship to a comprehensive strategic partnership, Dr. Burkhard Schrage, Faculty of Business, RMIT University Vietnam, said that Vietnam needs to continue to improve the business environment to become more attractive to foreign investors, including reducing administrative procedures, ensuring uphold the rule of law and protect property rights.
Similarly, according to experts from the World Bank (WB), Vietnam is considered an attractive destination for international investors thanks to its economic and political stability and ability to integrate the global economy. But it is important for Vietnam to continue to strengthen its business environment and attract the interest of private investors to make the most of opportunities.
This is also an issue recognized by the Government and has given directions to promote improvement of the investment and business environment. As usual, in the first days of the year, the Government issued Resolution No. 02/NQ-CP on main tasks and solutions to improve the business environment and enhance national competitiveness in 2024. In particular, the Resolution sets out the requirement to create a favorable business environment for investment, business activities and the development of new and creative business ideas; reform in the direction of reducing the number of procedures, time, costs and risks for businesses.
Notably, after only 1 year of being included in Resolution 01 on socio-economic management, this year, the Resolution on improving the business environment was again separated. According to the explanation from the drafting agency, Resolution 02 was "returned" to affirm the Government's determination to improve the business environment. Therefore, the business community in general and the foreign business community in Vietnam have high expectations, especially when each specific task for each ministry and branch has been clearly specified by the Government.
For example, in the past, many foreign businesses encountered problems in implementing extended producer responsibility (EPR). With this problem, Resolution 02 of 2024 clearly stated the responsibility of the Ministry of Natural Resources and Environment in presiding and coordinating to remove contents related to ERP. In addition, the Resolution also requires ministries and agencies to continue to review and reduce the list of import and export goods subject to specialized management and inspection. The Ministry of Public Security is assigned the task of presiding and coordinating to review shortcomings and difficulties in the process of implementing legal documents on fire prevention and fighting, amending technical regulations in a direction consistent with the law and actual conditions.
According to experts and businesses, promoting the improvement of the investment and business environment and simplifying administrative procedures is necessary, not only to attract more FDI but also to create more trust and motivation for foreign enterprises to continue expanding production and business. According to EuroCham President Gabor Fluit, in the face of increasing economic competition in the region, Vietnam must continue to improve policies and strategies to attract and maintain European foreign direct investment. An important area to focus on is simplifying administrative procedures and, at the same time, investing in infrastructure to reduce logistics costs and improve the qualifications of the workforce.
CK
Source: VITIC/congthuong.vn