Business climate and competitiveness to be improved by new law
The National Assembly passed amended Law on Enterprise and Law on Investment in 2014. This amendment and other related laws are anticipated to have a major influence on the country's business environment.
The health of the business community is expected to show progress next year along with institutional reforms that should improve the business climate and competitiveness.
According to Pham Dinh Thuy, director of the Industrial Statistics Department under the General Statistics Office, the business community struggled with difficulties in the past years. This situation allowed only firms with good health to exist as well as to develop and seek new business opportunities.
He pointed out that the Vietnamese firms were largely affected by the global economic recession due to significant dependence on exports, low competitiveness, small business scale and the lack of human resources and technologies.
Statistics showed that more than 67,820 firms had been dissolved, closed down or halted operations due to the difficulties encountered this year. Approximately 58,320 stopped operation among these firms, which was 14.5 per cent higher compared with the previous year.
Statistics showed that up to 93.7 per cent of firms dissolved were of a small scale or had capital below VND10 billion (USD471,500). Meanwhile, 70 per cent of these firms operated in fields with low technology application.
According to General Statistics Office Director Nguyen Bich Lam, the number of dissolved firms is not alarming compared with other countries.
The percentage of firms that managed to survive in Viet Nam is currently at 60 per cent, while that in Europe is 46 per cent and the United States is 50 per cent after five years of operations, shared the director.
Lam said that dissolution or bankruptcy was unavoidable amidst the global economic recession, which contributed to the economic restructuring and improvement of the health of the business community.
The office's statistics also showed that more than 74,840 firms were established this year with combined registered capital of VND432.2 trillion (USD20.38 billion). This is 2.7 per cent lower in the number of firms but 8.4 per cent higher in the registered capital value compared with last year.
The average registered capital also increased by 11.5 per cent to reach VND5.8 billion (USD273,500) per firm.
In addition, some 15,400 firms were reported to have resumed operations this year. This number is 7.1 per cent higher than the same period last year.
More than VNN1,027.9 trillion (USD48.48 billion) in total was poured into the economy in 2014.
Experts disclosed that the new regulations together with tax, customs and administrative reforms would help ensure fair competition among businesses./.