Vietnam's business climate improvements have won plaudits from Japanese investors and the World Bank.
According to a Japan External Trade Organisation (JETRO) survey on 458 Japanese enterprises in Vietnam last week submitted to the Ministry of Planning and Investment, 66.1 per cent of Japanese enterprises plan to expand investments in Vietnam. This rate is lower than Indonesia (67.3 per cent), but higher than Thailand (60.9 per cent), the Philippines (58.7 per cent), China (46.5 per cent) and Malaysia (46.2 per cent).
Some 32.4 per cent would maintain their existing investments. Generally, Japanese enterprises continue to view Vietnam as one of their most important investment destinations.
Some 84 per cent said the reason behind their plan to expand investments was an increase in their revenues in Vietnam, while 70 per cent said they saw Vietnam's high growth and big potential.
Japanese enterprises also pinned their expectations on Vietnam's international integration. Some 70 per cent hoped that Vietnam would continue simplifying customs clearance procedures.
"Japanese enterprises respect Vietnam's laws and want an open and fair business climate, and want to contribute more to Vietnam's socio-economic development," said the survey conducted late last year.
According to a recent PricewaterhouseCoopers survey conducted over 1,322 interviews with CEOs at 77 nations in the fourth quarter of last year, Vietnam ranked among the top emerging markets with high growth.
Under the World Bank's Doing Business 2015 survey released late January, Vietnam was ranked 78th in the ease of doing business category out of 189 surveyed economies. This rank was up on the 99th place in the same survey released by the bank last year. In Southeast Asia, Vietnam was ranked fourth, after Singapore, Malaysia and Thailand.
Vietnam's effective corporate income tax rate (CIT) is 15.7 per cent, lower than 17 per cent in Singapore, 16.7 per cent in Indonesia, 17.9 per cent in Thailand and 21 per cent Malaysia.
"This reflects Vietnam is giving tax incentives for businesses," said the survey.
Hoang Thi Lan Anh, vice head of the General Department of Taxation's Reform and Modernisation Section, said the tax sector had reduced tax compliance time by 290 hours per year in 2014. But the government required this time to be trimmed to 171 hours, equivalent to the ASEAN-6 group (Indonesia, Malaysia, Philippines, Singapore, Thailand and Brunei) average.
Anh said the sector would continue trimming the 415.5 hours to 121.5 hours this year, while the social insurance sector would decrease the annual time spent for paying social payment by 285.5 hours to 49.5 hours.
"This would mean the 171 hours target is feasible, helping improve business performance," Anh said.
"Vietnam is making appropriate strides in administrative reform," said Joanna Nasr, a World Bank expert.
Tran Trong Binh, senior associate of French-backed law firm Audier & Partners, told VIR that this firm had been helping some firms from France, Hong Kong and Malaysia to do business in Vietnam.
By Thanh Thu (VIR)
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