A survey by the Vietnamese Chamber of Commerce and Industry of foreign-invested companies confirms the need for further reforms to attract more foreign direct investment.
Despite the many improvements, Vietnam still needs to focus on reforming cumbersome administrative procedures, creating more favorable conditions for companies to carry out procedures for carrying out investment projects involving construction work, and promoting the fight against corruption.
The data showed that foreign companies appreciate positive improvements in the investment climate, such as easing the burden of inspections and investigations and positive changes in the reform of administrative procedures.
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However, Vietnam must continue its efforts to improve its investment climate for businesses to remain an attractive destination for FDI.
As for the cost of following government guidelines, according to the survey, the burden of inspections and investigations for FIEs decreased in 2021, with the median number dropping to zero, up from one in 2020 and two in 2019. But the government applying pandemic response measures, for example, impacted business operations, which comes at a cost.
In addition to the many areas of administrative procedures that have been improved, the proportion of affected companies has increased in a number of others, showing that many problems remain, in particular with regard to building permits, the assessment and approval of fire-fighting and prevention measures. efforts, environmental impact assessments or confirmation of environmental protection plans, and investment policy decisions.
However, the burden of informal costs has decreased, with 1.7 percent of enterprises spending more than 10 percent of their revenues on such costs, compared to 1.2 percent in 2020. The report found that the most common informal costs of foreign enterprises cover import and export procedures, at 38.9 percent, and inspections, at 25.4 percent. Notably, 21.1 percent of FIUs have had to pay informal costs when conducting procedures on land; a sharp increase from 10.3 percent in 2020. Another problem facing foreign companies is that the quality of the employees is still low.
Vietnam needs more effective policies to help domestic companies integrate into the global value chain and take advantage of opportunities to connect with FDI companies to take advantage of modern technology and governance measures, the GBS quoted a report from Vietnam Economic News.
