Dr. Tran Thi Hong Minh
Director General of Agency for Business Registration
Following the successful results of the 2017 start-up Nation with all 13 socio-economic development targets reached, in the first three months of 2018, the business environment in Vietnam continue to get positive and remarkable indicators through the data on the market entry of enterprises. To get this initial insight, the article provides some relevant information that has marked a positive impact on the business environment in the first quarter of 2018.
- The number of registered enterprises has increased continuously
According to statistics from the National Business Registration Database, in the first quarter of 2018, there were 26,785 newly established enterprises with a registered capital of VND 278,489 billion, which reflected an increase of 1.2% in number of new enterprises and 2.7% in the amount of registered capital in the comparison with the same period of 2017. The average registered capital per enterprise in the first quarter of 2018 was VND10.4 billion, up 1.5% against the same period last year.
The total registered capital added to the economy in the first quarter of 2018 was VND 763,964 billion, including the registered capital of the newly registered enterprises (VND 278,489 billion) and the increased registered capital amount (VND485.475 billion) with 7,893 turns of enterprises registering to increase capital. Compared to the first quarter of 2017, the total registered capital increased by 28% in the first quarter of 2018, showing that the level of private sector contribution to the economy continued to increase. The average registered capital per enterprise at the first quarter of 2018 was VND10.4 billion/enterprise, nearly doubling that of VND5.5 billion/enterprise in the first quarter of 2015.
The above chart shows that the enterprises registered in the first quarter of the last four years tends to increase in terms of number of enterprises, registered capital amount and average registered capital. Compared to the first quarter of 2015, the average registered capital per enterprise in the first quarter of 2018 nearly doubled, from VND5.8 billion per enterprise to VND10.4 billion per enterprise.
- The rate of online business registration exceeds the set target of the Government
According to statistics from the National Business Registration System, in the first quarter of 2018, the rate of online business registration in the whole country was 58.01% (which was 31.7% in Q1/2017), in Ho Chi Minh City, the percentage was 64.84% (which was 42.29% in Q1/2017) and 99.62% in Hanoi (which was 62.03% in Q1/2017). The rate of online business registration exceeded the target set by the Government in Resolution 36ª / NQ-CP on e-government.
Table 1: The percentage of online business registration in the whole country and in Hanoi and HCMC (Unit: %)
The data in the Table above shows that people and enterprises are now more and more accessible with technology and public services on the National Business Registration Portal when deciding to use online channel instead of having to go to the place of registration as the tradition way. This is an advantage for enterprises to easily access, capture information and receive online results quickly, while minimizing negative effects that may arise from the intervention of humans. In addition, the information on business registration posted on the Portal has made it easy for agencies, enterprises and citizens to have access to specific information about the business, creating transparency and strengthen the supervision of the society. The number of access counted through the first quarter of 2018 reached nearly 210 million. In 2017, there was more than 105 million visits (which was 2.5 times more than in 2016).
- The cost of entering the market continues to be reduced
To further implement the tasks and solutions to improve the business environment and reduce costs of starting the business and other input costs for enterprises as stated in the resolutions of the Government (Resolution No.19-2017/NQ-CP dated 02/06/2017 and Resolution No.75-CP dated 08/09/2017), on 12/04/2017, the Ministry of Finance issued Circular No.130/2017/TT-BTC supplementing Circular No.215/2016/TT-BTC on the rates of collection, payment, management and use of enterprise information supply and enterprise registration fees. Under the provisions of Circular No.130/2017/TT-BTC, the enterprise registration fee has been reduced by 50% compared with the previous regulations and 100% exemption if the enterprise registers online. The above legal regulations have come into effect since January 20, 2818, and have partly showed positive impacts expressed by the increased number of newly registered enterprises and the number of online application in the first 3 months of 2018 compared with the same period last year.
- Market Entry Index reaches the top within 12 consecutive years
According to the results of the 2017 Provincial Competitiveness Index (PCI 2017) survey released by the Vietnam Chamber of Commerce and Industry (VCCI) on March 22, 2017, the Market Entry Index 2017 that is one of the 10 constituents of the PCI 2017 has consistently been ranked the highest in the past 12 years (7.84 points out of 10 points). This shows that local authorities have made many efforts to improve administrative reform, remove barriers to market entry for businesses to improve the business environment at the local level. According to the results of PCI 2017 assessment, after the Market Entry Index, there are 5 components of the index have reached over 6/10 points, namely: Business Support Services (6.61), Time Cost (6.48), Labor Training (6.45), Transparency (6.34), Land Access (6.33) and 4 indicators reached over 5/10, including: Legislation & Order (5.94), Mobility (5.44), Informal Payments (5.31), Fair Competition (5.14).
Based on the data and analysis on the market entry of enterprises in the first quarter of 2018, along with other positive macroeconomic signals (GDP is expected to grow by over 7%, prices and inflation have been in control, monetary and financial indicators have been positive, monetary and foreign exchange market, interest rates, stock market have been stable, FDI disbursement, production and business sectors, consumption, import and export have seen positive changes, etc.), which is a demonstration of the effectiveness of macro-economic management policies and administrative reform efforts of the entire political system to create a more favorable business environment for investors and businesses. These factors have, increasingly, reinforced the entrepreneurial start-up of individuals entering the market and unfolded a promising 2018 for the socio-economic development of country.