Today (March 29), the Vietnam Federation of Commerce and Industry held a conference to announce the Report on Business Law Flow 2021.

The Chairman of the Vietnam Federation of Commerce and Industry Pham Tan Cong said that in 2021, Vietnam's economy will continue to be heavily affected by the COVID-19 epidemic. For the first time since Vietnam calculated GDP on a quarterly basis, in the third quarter - the time when the epidemic broke out most strongly, GDP grew negative. The COVID-19 epidemic affected most industries in the economy, business registration decreased in both the number of businesses, capital and registered employees. The number of enterprises suspending business for a definite time, ceased operation, and dissolved all increased.

Photo 1: The Chairman of VCCI Pham Tan Cong spoke at the conference.

The survey results conducted by VCCI from the beginning of July to the middle of September 2021 with nearly 3,000 responding businesses operating in 63 provinces and cities showed that 93.9% of businesses said the impact of the epidemic was “totally negative” and “mostly negative”, increased in comparison with 87.2% of the survey in 2020. It can be said that 2021 is a challenging year for our economy.

According to the Chairman of VCCI, until the end of the year, when our country changes its direction in the epidemic prevention policy from "zero COVID" to "safely adapting, flexibly, effectively controlling the COVID-19 epidemic"; business activities has gradually improved, starting to have growth in most economic sectors. This is possible thanks to the timely direction of the Party and State; the close attention of the heads of the Party and State.

Therefore, with the goal of identifying business legal issues that impact the business community every year, the Business Law Flow Report 2021 continues to review outstanding policies as well as legislation issues to be discussed in 2021.

Photo 2: The Business Law Flow 2021 Conference organized by VCCI attracts great attention from the business community.

In the special context of 2021, the VCCI President emphasized that VCCI realizes that policy-making activities still follow two main "flows", similar to 2020, but somewhat stronger, namely: (i) flow of policies to support and restore production and business for the business community; and (ii) flow of policies to improve the business investment environment.

With the "flow" of policies to support and restore production and business: strong, fast and timely, the VCCI Chairman said that in 2021, the 4th outbreak in our country caused heavy damage for the entire economy. Support policies for businesses; removing the "bottlenecks" to open the way for businesses to recover is one of the prominent of this year.

The State continues to have financial support policies for affected subjects such as: continuing to reduce fees and charges when businesses carry out administrative procedures; exemption and reduction of corporate income tax, personal income, value-added tax and other taxes for groups of subjects seriously affected by the epidemic; financial obligations exemption and reduction in a number of heavily damaged industries such as tourism, aviation, etc.

“In general, the support policies were issued in a timely manner, with a "focus" and "right" view of the subjects that needed support. This showed the companionship and concern of the Party and State to the business community,” commented the VCCI Chairman.

Photo 3: The Business Law Flow 2021 Conference is held in hybrid format

Apart from financial support, according to the Chairman of VCCI, clearing the "bottlenecks" and ensuring the circulation of economic activities is a policy highly appreciated by the business community. Resolution 128/NQ-CP of the Government redirecting the epidemic prevention and control policy to "safely adapting, flexibly and effectively controlling the COVID-19 epidemic" has created great conditions for businesses to recover and develop economy.  The statistics of the last three months of the year with growth figures of many industries and fields show the positive impact of this Resolution.

With the "flow" of policies to improve the business environment, the VCCI Chairman said that this flow is still being promoted, but there are still many challenges in terms of effectiveness.

According to the Chairman of VCCI, in recent years, the State has always focused on institutional reform activities. Many rounds of review and reduction of business conditions and administrative procedures have been conducted.

“This year, cost reduction activities in compliance with the direction of Resolution 60/NQ-CP were strongly promoted. Most ministries have introduced compliance cost reduction options with the goal of reducing compliance costs by at least 20% in the current documents. The business investment environment will be somewhat more favorable from these reduction proposals”, emphasized the VCCI Chairman Pham Tan Cong.

However, from experience with businesses, the VCCI Chairman said that besides recognizing the efforts of state agencies in improving the business environment, businesses still have many doubts about the practicality and quality of review and reducing compliance costs activities. Because, in the reduction proposals, businesses still see a lot of regulations that make it difficult for businesses have not been handled.

Along with that, the Chairman of VCCI also said that there is currently a trend of tightening management in a number of industries and fields - a paradox that exists in policy making activities.

“On the other hand, in policy making this year, we see a trend of tightening management in a number of industries and fields. It is worth noting that in some industries and professions that were previously appreciated for reforming business conditions, now it is proposed to re-apply the previous business conditions that have been removed. Or some of the policies we've found still impose a burden on business compliance costs.

This shows a paradox: while the Government is having many rounds of review to cut compliance costs for businesses, newly drafted policies are creating new barriers and burdens for businesses. The question of the uniformity in institutional reform as well as the effectiveness in monitoring business policies has been raised. This will become a challenge for policy making to improve the business environment,” said the VCCI Chairman.

In addition, according to the Chairman of VCCI, the quality of circulars and official documents – there are still many concerns.

“This year, we have conducted a preliminary assessment of the quality of circulars and official documents – two types of documents related to closely related to investment and business activities of enterprises. The policies of openness and reform in legal documents, decrees and decisions of the Prime Minister will be difficult to come true, if the provisions in the circulars and practical guidelines in the official dispatch do not convey the spirit of progress. above", the VCCI Chairman added.

Through reflections from the business community, VCCI leaders realized that the quality of circulars and official documents still has many issues.

“For example, there are many circulars still promulgating business conditions – which are prohibited under the Investment Law 2014, 2020; the provisions in the circular are not transparent, unreasonable, overlapping, contradictory, or the official documents promulgating legal regulations, the content of the instructions in the official letter is not appropriate... All these issues will be is a hindrance, causing great difficulties for enterprises when implementing business investment activities.

It is not exaggerated to think that the quality of circulars and official documents will partly affect the effectiveness of the institutional reform activities that the State is carrying out", emphasized the VCCI Chairman.

With the issue of which management mechanism for new economic activities, the VCCI Chairman said that we are living in a rapidly developing digital age. Digital technology has formed and promoted the development of new business models such as the sharing economy, new products and services such as self-driving cars, technology (medtech), financial technology (fintech). …

“The emergence of new products, services, and new business models has posed challenges for legislators in determining appropriate management policies. In the past time, there has been confusion from the management agency, causing many difficulties and mixed reactions from the business community.

Resolution 52-NQ/TW of the Politburo in 2019 had the policy of "early promulgating an institutional framework for controlled testing for new technologies, products, services and business models formed from the fourth industrial revolution,” said the VCCI Chairman.

Stemming from reality and policy of the Party and State, in this Business Law Flow Report, VCCI posed a number of issues related to the "regulatory sandbox". This could be the key to solving management problems for new business models/activities in the economy.

“Through the Report, we want to provide policy information to businesses and associations, and at the same time convey the perspective of the business community to policy makers. With the hope, the Report will be useful information for legislators to refer to when formulating legal regulations”, emphasized the VCCI Chairman.