Quang Ninh has low costs for them to enter the market, land access is easy

and local workers are well trained. Photo by VnExpress/Minh Phuong

Quang Ninh was the most competitive province in Vietnam for the second time in a row.

The northern province scored 70.36 points in the Provincial Competitive Index (PCI) 2018 survey released Thursday by the Vietnam Chamber of Commerce and Industry (VCCI) and the U.S. Agency for International Development (USAID).

Businesses surveyed said that Quang Ninh has low costs for them to enter the market, land access is easy and local workers are well trained.

The southern province of Dong Thap came second with 70.19 points, followed by Long An and Ben Tre provinces, all in the Mekong Delta region.

The central city of Da Nang, which dominated the ranking from 2013 to 2016, came in fifth place at 67.65 points. Surveyed businesses gave the city low scores in policy bias and proactive leadership.

Hanoi was ranked 9th with 65.40 points, the first time that the city made to the top ten; as also the first time it outranked Ho Chi Minh City, which fell from 8th place in 2017 to 10th last year with a score of 65.34.

The survey found noticeable improvement in some aspects of business environment in the localities, including less bias and encouraging progress in administrative reforms.

49 percent of surveyed private firms and 56 of foreign invested enterprises said they plan to expand their operations in the following two years.

However, domestic businesses wanted to see more improvement in transparency. The majority of businesses, 55 percent, said they still had to pay informal charges to complete their administration procedures.

Over a third of business, 34 percent, said they faced difficulties in acquiring business certificates. Sixteen percent of respondents said they had to wait over a month to receive all necessary documents to enter the market.

Seven out of ten respondents said that they needed to maintain relationships with government officials to access documents relating to their businesses that should normally be made public.

Speaking at a press conference on releasing the survey report, Dau Anh Tuan, director general of VCCI’s legal department, said that the lack of transparency was preventing local companies from thriving.

"Businesses that want to have advantages in the market have to rely on their relations with provincial officials, not their capabilities," he said.

There is an increase in the percentage of firms, most of which are small and micro enterprises, facing difficulties in their business activities, the survey found.

Foreign direct investment (FDI) firms covered by the survey said several areas required the government’s immediate attention, such as customs clearance, social insurance, taxes and inspections.

Labor quality, especially high-skilled labor supply, remains a bottleneck in Vietnam’s investment environment, they said.

The 2018 PCI report, the 14th iteration, is based on responses from over 12,000 enterprises, including nearly 11,000 domestic private enterprises from 63 provinces and cities and more than 1,500 foreign invested enterprises in 20 provinces in Vietnam.