Gov’t Office chief wants business costs lowered
Gov’t Office chief wants business costs lowered
Minister and Chairman of the Government Office Mai Tien Dung has called on ministries and agencies to help investors cut the cost of starting a business.
The meeting was aimed at seeking ways to improve quantitative indicators on regulations for starting a business and getting electricity under the World Bank Group’s Doing Business 2020 study, reported the Vietnam News Agency.
According to the report, Vietnam ranked 115th out of the 190 economies in terms of starting a business, down 11 notches from 2018.
Local startups are required to go through eight procedures. The first procedure is to check the proposed company name, obtain certificates of business and tax registration and publish the registration contents on the National Business Registration Portal.
Other procedures include making a company seal; submitting an online notification of the seal sample; opening a bank account; approving preprinted value-added tax invoices with a municipal taxation department; paying the business license tax; registering with the local labor office to declare the use of labor; and registering employees with the Social Insurance Fund for the payment of health insurance and social insurance.
The report indicates it is possible for startup entrepreneurs to apply for registration online, but a follow-up with hard copies is required in this case. Also, online applications may take longer in practice, especially if there were any issues with documentation. Therefore, most founders prefer to apply for registration in person.
The 2014 Business Law allows businesses to decide on the number, form and content of their seals. However, entrepreneurs must submit an online notification of the seal sample to their business registration offices.
A copy of the notification on the use of the seal and an enterprise registration certificate have become a compulsory part of the application as commercial banks ask startups to open their accounts.
National databases on enterprises, social insurance and labor have yet to be integrated. The situation caused overlaps in information provision requirements among regulatory agencies, making it difficult to reduce the number of business procedures.
Minister Dung told the meeting that Prime Minister Nguyen Xuan Phuc had called for measures to enhance the national business climate and competitiveness.
He cited the latest edition of Doing Business as saying that among the 190 economies, Vietnam secured the 70th spot on the Ease of Doing Business ranking, dropping one notch compared with a year ago. In this regard, the country was ranked first in the Association of Southeast Asian nations.
However, Vietnam’s indicator on starting a business was down 11 places against 2018. The Government’s second resolution for 2020 targets improving the indicator by 10-15 places this year, he continued.
He remarked that a single ministry could make good reforms in its field, but collaboration with other ministries has yet to meet expectations. He demanded a rapid transformation from paper-based procedures to electronic ones.
Also, he called for improved progress on electronic invoices, epayments and single sign-on practices. Authorities should work together to reduce the number of business registration procedures from the current eight to four, which will help reduce time and costs for businesses.
Lan Anh, a representative of the World Bank in Vietnam, said that a major recommendation of the global lender in its Doing Business 2020 study is to integrate procedures onto a single portal, which would help entrepreneurs avoid travelling to and working with regulatory agencies separately.
She added that merging steps for labor and social insurance registration with the portals on tax code provisions and business registration would mean significant reform progress.
