Vietnam - Foreign businesses struggle with complicated admin procedures

VietNamNet Bridge – Customs procedures were still so cumbersome that businesses had to waste much of their time, said a representative from Canon Viet Nam, which has been operating in the country for more than 10 years.

He was attending a conference in Ha Noi on Tuesday, which also heard that complicated administrative procedures, especially in tax and customs, inadequate infrastructure, lack of a high quality workforce and undeveloped support industries are problems facing foreign-invested companies.

Despite efforts from authorities to simplify, the firms still had to fulfill many customs procedures, the representative said.

Tran Minh Tuan from LG Viet Nam said inconsistent customs mechanisms from place to place had created difficulties when his firm wanted to re-export goods below standard.

In some cases, his firm had to petition for permission from the Ministry of Industry and Trade to re-export the products as customs authorities in one locality approved while others did not.

Tuan emphasised the importance of slashing unnecessary customs procedures for firms with good export performances.

The general director of Doosan Heavy Industries, Hang Ha Ryu, said the company had to import 80-90 per cent of its raw materials. He suggested the Government extend the period for tax payments from 275 to 365 days as contracts took from one to three years to fulfill.

Many foreign enterprises at the conference said more incentives were also needed to attract foreign investment into support industries.

They said the poor development of support industries cost the firms large amounts of money as they had to import raw materials from overseas.

We really wanted to purchase made-in-Viet Nam components and parts to save costs, the Canon representative said.

The general director of Samsung Vina, Cho Seok Hee, said his company hoped authorities would maintain the number of labourers for its factories by improving housing and providing facilities.

Foreign-invested enterprises played an important role in the country's exports, making key goods such as computers, electronic products and parts, and machinery, according to the Ministry of Industry and Trade.

Viet Nam was on its way to becoming a market economy, so despite great efforts from the Government to improve policies and regulations over past years, some of them remained irrational, said Deputy Minister of Industry and Trade Le Duong Quang.

Cumbersome administrative procedures caused many difficulties for businesses, Quang said.

Each business had experienced different difficulties, so the Ministry of Industry and Trade and other relevant ministries would accept the firms' recommendations and make the necessary changes to make it easier for enterprises, especially foreign-invested firms, he said.

Regarding the proposal to extend the grace period for tax payment from 275 to 365 days, a representative from the General Department of Customs said the department would petition the Ministry of Finance to consider making modifications suitable with current conditions.

According to deputy head of the ministry's Export-Import Agency Tran Thanh Hai, Viet Nam is now home to 14,522 projects with investment from 100 countries and territories totally worth US$210.5 billion in registered capital.

The processing industry accounts for 50.3 per cent of the total registered capital, followed by the property market with 23.6 per cent, and hotel and restaurant services with 5 per cent, Hai said.

Japan is the largest source of foreign investment with $28.6 billion. It is followed by Taiwan, Singapore and South Korea.

Last year, the foreign-invested sector accounted for about 56 per cent of total export turnover with $64.05 billion, a surge of 34 per cent year-on-year.

Source: VNS

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