“We are supposed to make people and businesses the center of every decision,” stressed National Assembly Chairman Vuong Dinh Hue at the working visit to VCCI and the meeting with the business community on October 7 at VCCI Headquarters, Hanoi, right before the celebration of Vietnam Entrepreneurs’ Day, October 13.

VCCI President Pham Tan Cong presents Chairman of the National Assembly
Vuong Dinh Hue with a picture of Uncle Ho with the Vietnamese entrepreneurs

Vanguards in national development

National Assembly Chairman Hue said, 17 years ago, Prime Minister Phan Van Khai decided to adopt October 13 as the Vietnamese Entrepreneurs’ Day. “In fact, the Vietnamese entrepreneur force has always been a vanguard in national development, an important task of entrepreneurs. 10 years ago, the Politburo issued Resolution 09 dated December 9, 2011 on building and fostering entrepreneurial roles in the course of national industrialization and modernization,” said National Assembly Chairman Hue.

In the important upcoming sessions, the National Assembly will discuss major socioeconomic decisions, including the assessment of COVID-19 impacts on people's livelihoods and operations of the business community, he added.

“Those important issues need the voice and input of the Vietnamese business community. In fact, when revising important laws, we listen to a lot of business opinions and in every decision it makes, the National Assembly always puts people and businesses at the center,” the NA Chairman stressed.

In the current difficult context, we must review and reassess the governance capacity of every enterprise. Besides, they must get stronger and realize their weaknesses and strengths that they know better than anyone else. Large enterprises must be ambitious, while small and medium-sized enterprises (SMEs) need to get even bigger to compete with larger ones.

COVID-19 as a driving force for a breakthrough
in institutional construction and improvement

Mr. Pham Tan Cong, President of the Vietnam Chamber of Commerce and Industry (VCCI), said that Vietnamese entrepreneurs and enterprises have grown rapidly in both quantity and quality over the past time. Up to now, Vietnam has more than 800,000 active enterprises, more than 25,000 cooperatives and about 5.2 million non-agricultural business households. In combination, the country has about 7-8 million entrepreneurs. Characteristics of Vietnamese entrepreneurs and enterprises are national spirit, patriotism, and sense of social responsibility, which are especially evident as they donate money and gifts and launch a series of charity programs in the fight against the COVID-19 pandemic. After 35 years of reform, thanks to the bravery, intelligence and creativity of Vietnamese entrepreneurs, many businesses have strongly expanded in scale and technology to catch up with peers in the region and in the world. Outstanding Vietnamese names include Vietcombank, Viettel, Vingroup, Truong Hai Auto, FPT and Vinamilk. Vietnam has six billionaires in 2021, according to Forbes. In 2020, Vietnam’s trade value reached US$544 billion, ranking 26th in the world.

However, compared with developed countries, Vietnamese enterprises are quite small and weak. Micro and small entities account for over 95% of total enterprises. Their competitiveness, profitability, governance and performance are still low, while their connectivity is not high.

In addition, the fight against COVID-19 has exhausted many Vietnamese businesses. In the first nine months of this year, more than 90,000 businesses were dissolved and suspended. On average, more than 10,000 companies withdrew from the market a month, 24% more than that in 2020. The overall picture of the business community shows a very sharp decline in operating scale and increased adverse impact on all business fields.

At the meeting on business support solutions amid the COVID-19 pandemic with the Prime Minister on September 26, VCCI represented the business community to put forth two new policies: Businesses are actors in the fight against COVID-19, thus they must be empowered and equipped with improved medical capacity; and a solid economic front is a foundation for victory on the health front, thus there is a need for a firm policy to protect and support safe business activity and livelihoods when we accept to live with the pandemic.

Addressing the meeting with NA Chairman Vuong Dinh Hue, VCCI President Pham Tan Cong proposed the third policy: Taking COVID-19 as a driving force to make a breakthrough in institutional construction and improvement, with a special focus to actively review, promptly revise, supplement and perfect the regulatory framework to match the so-called new normal.

National Assembly Chairman Vuong Dinh Hue and VCCI President Pham Tan Cong
chair the meeting with business representatives on the occasion of Vietnam
Entrepreneurs' Day (October 13)

Necessarily amending and supplementing legal regulations that are barriers to business

To facilitate businesses to "safely, flexibly adapt to, effectively control the pandemic", and quickly restore operations, VCCI proposed urgent and innovative solutions.

Accordingly, there is a need to actively review, amend and supplement legal regulations and policies on business that are hindering investment and business activities of enterprises, especially overlapping, conflicting, inconsistent or unpractical provisions in the Law on Public Investment, the Law on Investment, the Law on Enterprises, the Law on Land, the Law on SME Support, the Law on Public-Private Partnership (PPP) Investment and the Law on Bankruptcy, to actively avoid the risk that outdated policies become a bottleneck for business operations in the new normal. Moreover, it is necessary to quickly build and complete legal institutions and corridors for the management and development of the digital economy, digital society and digital government.

Furthermore, it is important to consider raising the country’s public debt limit to expand the size of the COVID-19 response support package. Vietnam’s total public debt to GDP is currently low and raising the limit is, therefore, a reasonable solution to create a budget source for economic growth, recovery and expansion. With Vietnam's estimated GDP of nearly VND6,300 trillion, support packages can be expanded to 4% of GDP, or VND250 trillion.

Additionally, it is necessary to study and issue some breakthrough fiscal and monetary policies. Currently, the government-backed support mechanisms and policies are mainly indirect, typically in the form of tax breaks. It is necessary to speed up the construction and implementation of an overall economic recovery program, which is phased out and selective.

“'Fire proves gold, adversity proves men,' with the pride of Vietnam Entrepreneurs’ Day, with the spirit of solidarity, bravery and creativity in addition to the judicious and timely leadership, direction and encouragement of the National Assembly, its Chairman and central authorities, Vietnamese businesspeople believe and affirm that they will overcome all difficulties and challenges, maintain stability and expand business operations to play a greater role in the fight against the COVID-19 pandemic as well as successfully carry out socioeconomic development goals stated in the Resolution of the 13th Party Congress,” VCCI President Pham Tan Cong asserted.

Business support is key
Mr. Pham Dinh Doan, Chairman of Phu Thai Group

In drafting and issuing business-related documents, it is necessary to take business support into account. Simple expressions should be used to avoid being misinterpreted or distorted to erect barriers to enterprises.

In addition, there is a need for assessment and selection as well as assessment scoring, for assessing documents and developing business support documents. Documents lack business opinions, especially those in relation with business in the course of recovering business operations during the pandemic time. Some have only full text, no summary, comparison and contrast with others, resulting in difficulties in implementation for businesses. Before being promulgated, documents need to undergo consultation with VCCI, business associations and large corporations, which must be carefully prepared, compared and explained simply.

Every time a law is passed, the National Assembly should check consistency with decrees and circulars to achieve the highest effect as soon as it is enforced. In the coming time, policies should be helpful for businesses in trouble caused by the COVID-19 pandemic in an accessible, practical, and suitable way.

Up to now, legal support is inconsistent and varies from locality to locality. So, it is necessary to synchronously provide appropriate support under current laws.

Legal policy corridor needs revising to match reality
Ms. Nguyen Thi Nga, Chairwoman of BRG Group, Standing Vice Chairwoman of Board of Directors of SeABank

During the post-COVID-19 recovery, regulatory policies will need to be revised to match the actual situation. For the finance and banking sector, there is a need for studying and speeding up the construction of the Law on Electronic Transactions to replace or amend the Law on Electronic Transactions of 2025 to lay the ground for competent bodies to complete legal regulations. The State Bank of Vietnam is expected to review, amend and supplement the acceptance of electronic transaction methods in circulars on banking operations, and build an important legal framework for banks to complete their digital transformation goals towards 2030.

Regarding foreign exchange management, it is necessary to study and adjust the ordinance on foreign exchange in relation to foreign investment, which will not distinguish indirect and direct investment as stipulated in the Law on Investment. At the same time, it is important to manage forex transactions in Vietnam.

With respect to the operating scope of credit institutions, I suggest adding content to laws on credit institutions or detailed instructions to expand activities such as banking agencies, asset management agencies and corporate bond advisories.

Regarding real estate business, it is necessary to have a legal corridor for real estate management from project investors. Therefore, credit institutions can have credit facilities for these projects. In addition, there is a basis for receiving assets as collateral.

Inconsistence in pandemic prevention regulations upsets businesses
Ms. Ha Thu Thanh, Chairwoman of Deloitte Vietnam

The National Assembly and the Government adopted the approach of living safely, adaptively and effectively with COVID-19, and the mechanism must be open to doing this. However, pandemic prevention regulations and policies are not consistent from locality to locality, making it difficult for businesses.

For businesses that have ceased operations, it is recommended that localities carry out dissolution and bankruptcy procedures via the Department of Planning and Investment in a clear and complete way, with a focus on settlement of debt and social responsibility, to classify the status of bank loans.

Currently, more than 80% of Vietnamese companies are small and medium in size and they will certainly need financial support for reopening. Soft loans are recommended for small business entities to restart business operations.

Currently, many workers are stuck in their homelands and cannot return to factories in other localities because they must be vaccinated. Many southern businesses reflected this reality and proposed vaccinations for workers seeking to return to factories.

Independent agency, not administering agency, grants licenses
Mr. Dau Anh Tuan, Director of Legal Department - VCCI

Currently, companies are confronting overlapping, conflicting regulations. For example, an investment project or an operating business is subject to regulation of many different legal systems. It remains a big issue to know what regulations are complied with, how regulations are enforced in the order of time and what agencies govern. Therefore, it takes much time for enterprises to complete procedures for their projects.

Besides, some laws are giving too much power to some ministries. According to existing laws, ministerial circulars cannot regulate administrative procedures or set business conditions, but laws adopted by the National Assembly empowers ministries to decide on administrative procedures and business conditions.

Therefore, in the coming time, the National Assembly needs to have an overall review program on administrative procedures and fees. The Economic Committee is currently drafting a very elaborate monitoring report, which will consult enterprises and investors.

We believe that there is a need for a mechanism to assess the cost of creating a government apparatus and ensure national interests and avoid industry-specific interests. Therefore, the drafting agency should assign policymaking to independent agencies instead of licensing agencies. It is necessary to make the law-making process more transparent, substantive and report it to the National Assembly.

Solutions to facilitate connectivity
Mr. Vu Van Tien, Chairman of Geleximco Group

The Ministry of Transport needs to work with local authorities to find solutions to facilitate connectivity, widen spacious traffic, and prevent supply chain disruptions. The ministry needs to reconsider logistics and seaport costs to avoid excessive price increases that increase burdens on businesses.

In the long term, labor resources need to be focused more than ever. The National Assembly and the Government should direct localities to have plans to welcome and support workers returning to their homeland to have a better livelihood or return to industrial zones to work. 

In particular, the ministry will review overlapping, troublesome legal regulations for businesses. Mechanisms and policies must be built for both short-term and long-term purposes and matched with common international practices.

Empowerment needed to stay safe with COVID-19
Mr. Chu Tien Dung, Chairman of Ho Chi Minh City Business Association

When shifting to the so-called new normal and restoring production, businesses in Ho Chi Minh City faced supply chain disruptions. Shortages of human resources, production materials and skyrocketing prices, and exhausted cash flows have driven many to the risk of bankruptcy. The economic recovery of Ho Chi Minh City is threatened.

Therefore, the National Assembly should consider building the Law on Fiscal Policy to facilitate enterprises to access capital, and extend and defer tax payment to two years. This is a national credit guarantee for businesses to borrow money and they must responsibly ensure the feasibility and transparency of their business plans.

On the other hand, a lot of overlapping regulations are affecting the resources of enterprises. Therefore, the Ho Chi Minh City Business Association proposed the National Assembly quickly remove overlapping legal regulations to facilitate enterprises to continue their business operations.