Streamlining business essential

June, 30/2016 - 09:00

Nguyễn Minh Đức, of the Legal Department of the Việt Nam Chamber of Commerce and Industry (VCCI), mentioned three business conditions that should be eliminated during his talk on the Việt Nam Government Portal.

Nguyễn Minh Đức.
Viet Nam News

Nguyễn Minh Đức, of the Legal Department of the Việt Nam Chamber of Commerce and Industry (VCCI), mentioned three business conditions that should be eliminated during his talk on the Việt Nam Government Portal.

From the enterprises’ perspective, what business conditions are very popular but should be eliminated?

There are three conditions that should be eliminated immediately:

First, murky criteria should be eliminated.

This ranks first among all violations. According to my estimation, thousands of conditions have been described as violations of murky criteria. For example: “the enterprise must have suitable equipment”, “the operator must have professional skill and knowledge”, “having personnel meeting the requirement”, etc.

Such definitions are too general, qualitative, and unclear. Such murky criteria are the root causes of corruption and passivity. I still remember one enterprise telling me: “A heavy envelope means your enterprise’s equipment is suitable - and vice versa!”

If the law states clearly what conditions enterprises must meet - in terms of labour force and equipment - enterprises will do their best to meet requirements for business licences.

If murky criteria are eliminated, the business community will express its sincere thanks and appreciation of government efforts.

Second, many conditions for doing business are unnecessary and unreasonable.

Under Article 7.1 of the 2014 Investment Law or Article 14.2 of the 2013 Constitution, there are only four essential conditions for a Vietnamese enterprise to operate. Enterprises must not violate: national defence or national security, law and order, social ethics, and the community’s wellbeing.

Any extra business conditions added by authorities are unnecessary and unreasonable.

Third, there are many irrational business conditions.

For example, a gas sales agent must use at least 100,000 Lpg cylinders. Or a rice export business must have at least 5,000 tonnes of storage capacity and a rice thresher with a capacity of 10 tonnes per hour.

Such conditions are unreasonable for Vietnamese conditions. The majority of Vietnamese enterprises are small- to medium-sized.

What do you think of the Government’s resolve to eliminate murky criteria to help enterprises do business more easily?

The 2013 Constitution reiterated citizen rights, including the right to do business. The newly elected government has committed to reform the country’s institutions and improve the business environment, while launching a war against special interest groups.

It is high time for Việt Nam to change its management ideology. The country should eliminate all government-regulated preconditions for doing business. Instead, it should switch to verifying that legal requirments are met in the normal course of business. For example, the government should check business licences at the time of importing or exporting goods - rather than checking to see if businesses have licences before allowing enterprises to conduct business transactions.

Việt Nam also needs to change its management ideology by switching from its government-controlled command economy to a true supply-and-demand market economy.

I’m confident that under the clear leadership of the new government, a brand-new and positive business environment will help our enterprises to develop in healthy and positive ways.

What is VCCI’s role in the ongoing process of reviewing business conditions written in draft decrees?

Before the Enterprises Law and the 2015 Investment Law, the drafting committee reviewed and listed some 6,000 business conditions. More than half of these conditions will become obsolete on July 1st.

The Circulars will then be upgraded into government Decrees.  To do this, the government has instructed all ministries to carefully review business conditions written in the Circulars - and to decide which conditions should be maintained and which should be eliminated. This task is very complicated.

The VCCI is involved in reviewing the Circulars and upgrading them into Decrees. The task is demanding. But we, at the VCCI, try to do our best.­ — VNS