Improved business operations lay foundation for optimism
Tuesday, 2017-04-04 11:44:27
NDO – According to the Agency of Business Registration under the Ministry of Planning and Investment, in 2016, for the first time ever, the number of newly registered enterprises reached more than 110,100 with over 90% coming into operation with taxation activities in practice. This means the number of ghost enterprises (fake companies) sharply reduced and capital is increasing rapidly.
Statistics from the General Statistics Office show that the first quarter in 2017 continued to record an increase in the number of newly registered enterprises, an increased flow of supplemental capital and number of businesses returning to operation at regional and branch scale. In more detail, there are more than 35,700 newly registered companies and those resuming operation in the whole country, of which 26,478 are newly registered ones with a total registered capital of VND271.2 trillion, up 11.4% in the number of enterprises and 45.8% in registered capital compared with the same period of 2016. At the same time, the number of businesses temporarily suspending operation or waiting for bankruptcy announcements reduced by 11%.
The optimistic trend among enterprises has been confirmed, as 75% of respondents stated that their orders and business situation in the first quarter this year were stable or better than the previous quarter. In addition, as many as 90% of businesses said that Q2 will tend to be stable or better compared to Q1 this year.
Furthermore, according to the State Bank of Vietnam, credit growth in the first quarter of 2017 reached 2.81%, the strongest in the last six years, also showing an improvement in the capital absorption capacity of enterprises and banks’ income.
FDI companies in the first quarter of 2017 also recorded a boom, with a total registered capital of new FDI projects, additional capital and investment in the form of capital contribution and purchasing of shares reaching over US$7.7 trillion, up 77.6% over the same period last year, with 74.7% of newly registered FDI projects investing in the manufacturing and processing sector.
In addition, exports of some key industrial and agricultural commodities in Q1 increased sharply over the same period last year. In particular, for the first time in the economic history of Vietnam’s Doi Moi, there is a spectacular change with exports of vegetables and fruits in QI (valued at US$671 million, up 24.3% against last year’s same period) surpassing crude oil export turnover (US$650 million, up 29.7%) - the traditional key export product with the largest contribution to the State budget.
Experts from the World Bank predicted that in 2017 Vietnam's economy would grow from 6.5- 6.7% of GDP, but they also warned that some traditional growth drivers, such as low-cost labour or export-based advantages will not last forever.
For that reason, Vietnam needs to create a foundation for new growth drivers, on the basis of facilitating development for the private sector, exploring opportunities when joining free trade agreements, and introducing more competitive business rules and better mechanisms to create favourable conditions for the business community, as well as improving the export structure with an increasing share of hi-tech exports that Vietnam has outsourced and manufactured.
The reality also shows that the business environment in Vietnam needs and will continue to improve, along with efforts in the improved responsibility, capacity, awareness and consensus of the Party, the State, the people and the business community on promoting anti-corruption and building a supportive government to accompany and support businesses and serve the people.