Business registration reform key for growth
A bureaucratic business registration process has long been a headache for enterprises in Viet Nam. How will the project help solve the problem?
Viet Nam-UNIDO co-operation on business registration reform aims to improve the business climate for private sector development and to enhance the competitiveness of Vietnamese enterprises by lowering the cost of doing business. Business registration reform will drastically decrease the time and out-of-pocket costs of market entry. At the same time, reform will significantly increase the information available on the business sector to enterprises and policymakers.
In the first phase of the project, which was funded by the Government of Norway, three main results were achieved. First, a detailed design and a plan for reform were prepared. The design process was highly participatory and involved the close co-operation among the Ministry of Planning and Investment, the Ministry of Finance, and Ministry of Public Security, as well as the business registration offices of a number of provinces and business organisations such as the Viet Nam Chamber of Commerce and Industry, the SME Association, banks, business and legal consulting firms and enterprises.
Second, based on the detailed design, competent Government agencies have already made important policy decisions. For example, the tax and business registration codes for enterprises were combined through inter-ministerial Circular No 05 in July 2008. The requirement for obtaining seal engraving permits was abolished and the statutory time limit for completion of registration was decreased from 10 days to five. Third, funds were raised for nationwide implementation of the main phases of the reform.
What’s the top priority in the next phase?
In the next phase of business registration reform, one of the main activities will consist of revision of the legal framework to simplify registration procedures. This will ensure that enterprises will register their business and obtain a unique business, tax and statistics code and send necessary seal registration information to MPS using a single, consolidated application form that they submit through a single point, the business registration office.
Next, all 63 registration offices will be linked to each other and to a national business registry database, to be called the National Business Registration System, or NBRS. Electronic data sharing between the ministries of Planning and Investment, Finance, and Public Security, as well as the General Statistics Office, will be established; and the reliability and availability of legally valid enterprise information will be improved drastically.
The capacity of the business registration offices will be enhanced to provide a standardised, high-quality service to enterprises through investment in human resource development and a fully computerised, nationwide operation system. The NBRS will then enable the electronic filing of audited financial statements of public companies, a requirement by the Law on Enterprises that is only partially enforced now.
The most important result will concern the business community. All businesses in Viet Nam and their partners abroad will be able to access legally valid and up-to-date information about their business partners, wherever they may be located, very rapidly through the internet and at a reasonable cost. Access to reliable, on-line enterprise information will also help banks, credit institutions, courts and any other organisations that need or use information about the business sector as well as improve the transparency of the business environment. The NBRS will also support the effective implementation of the laws on enterprises and investment, all of which will improve the competitiveness of the Vietnamese business sector.
What should Viet Nam do to further the goal of business registration reform?
The Government of Viet Nam, by launching this large-scale reform programme with technical and financial assistance from the Government of Norway and UNIDO, has given it a very high priority. Central-level authorities are fully engaged in the process. This reform programme is expected to demonstrate the best practice of marrying public administration reform with an e-government initiative to further improve the business climate. All stakeholders, particularly the business sector, should closely follow, support and participate in the reform process to ensure its successful implementation.
How will the registration reform affect the business performance of small – and medium-sized enterprises?
Vietnamese SMEs are a vibrant and important sector of the economy. SMEs transform the human and financial resources of society into productive investments that create goods and services traded domestically and internationally. SMEs are flexible and adapt quickly to changing conditions, including to challenges in difficult times. They create jobs and are the breeding ground for a skilled labour force. Business registration reform will contribute to the competitiveness of SMEs a great deal because it will save them time and money as they establish and maintain business relations with their partners at home and abroad.
