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Vietnam Today

65% of local enterprises profitable last year

Released at: 14:20, 16/03/2017

65% of local enterprises profitable last year

Photo:enternews.vn

Provincial Competitiveness Index gleans host of information from local and foreign enterprises.

by Hai Van

Sixty-five per cent of Vietnamese enterprises recorded profits in 2016; the highest rate for the last five years, the Vietnam Chamber of Commerce and Industry (VCCI) announced on March 14 at the release of the Provincial Competitiveness Index (PCI) for 2016.  

“The PCI is a collection of ‘voices’ from Vietnam’s private enterprises,” said Mr. Vu Tien Loc, Chairman of VCCI. “Promoting the development of private enterprises, especially micro, small and medium-sized enterprises, is the mission and responsibility of VCCI.”

He added that job creation is the responsibility of the private sector, which is also the driving force of the country’s economic development.

2016 was the first time in 12 years that average capital per enterprise reached VND18.1 billion ($794,930), double the 2006 figure of VND7.5 billion ($329,800). Thirteen per cent of Vietnamese enterprises increased their employee numbers last year.

Enterprises remain optimistic about their potential, with 48 per cent of the 1,550 foreign direct investment (FDI) enterprises surveyed expecting to expand their business scale over the next two years.

Eleven per cent increased investment capital in 2016 and 63 per cent recruited new workers, the highest increase in the last five years.

While registering a business took 20 days in 2006, it now takes just seven days, the lowest in the 12 years the PCI has been compiled. The rate of businesses waiting more than one month to officially go into operations has been halved, from 26 per cent to 13 per cent.

However, the PCI 2016 also found that 66 per cent of enterprises in provinces must use informal relationships to access information, which is higher than the rate in 2008.

Enterprises also claimed that harassment remains widespread, and while the response rate has improved in the last two years (down from 65 per cent of respondents noting the issue in 2013-2014 to 58 per cent in 2016), it is still high compared to results in 2006-2012.

Forty per cent of FDI enterprises come into operations after one month of obtaining a license.

According to FDI enterprises, the leading problems they face are taxes, fees, social insurance, and customs clearance procedures. Nevertheless, the percentage of enterprises selecting all of these procedures as problems has fallen compared to 2015. This is partly due to efforts to implement Resolution No. 19/NQCP/2015 on simplifying administrative procedures. This is especially true in the field of customs; one of the focal points of the resolution.

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