Regulations needed to support household businesses

Organized by the Vietnam Chamber of Commerce and Industry (VCCI), the conference aimed to collect opinions about plans to amend the Law on Investment and the Law on Enterprise being compiled by the Ministry of Planning and Investment.

VCCI’s Chairman Vu Tien Loc said it was critical to create the legal framework for business households to promote their development.

Loc cited statistics showing there were nearly five millions business households in Vietnam who contributed more than 30% of the country’s gross domestic product (GDP). However, the existing policy framework for business households is inadequate and there was a lack of equalities between business households and official enterprises.

Loc added that many existing policies made business households reluctant to transform into enterprises.

“The amendments to the Law on Enterprise should take into account effective solutions to transform business households into enterprises in an effort to promote the development of the private sector,” Loc stressed.

“Why are business households which use hundreds of workers each not regarded as enterprises? Their nature is enterprise, in fact. Not recognizing business households as enterprises could be the largest bottleneck of Vietnam’s business legal system,” Loc said.

Loc said the amendments to the law should regulate business households to be a type of enterprise while creating favorable conditions, especially in tax and accounting policies for small and micro businesses at the same time.

Deputy Minister of Planning and Investment Vu Dai Thang said the ministry would take into account VCCI’s recommendations, admitting that the current policies of encouraging businesses households to transform into enterprises did not bring about expected results.

According to lawyer Le Van Ha from Pathlaw law firm said it was necessary to recognize their legal status and develop a policy framework for their development.

Lộc also said that the procedure for registering a business needed to be simplified further, adding that Vietnam’s ranking in market entry by the World Bank remained low.

Regarding the Law on Investment, Loc said the amendments should focus on effectively deregulating business prerequisites.

Nguyen Van Toan, Deputy Chairman of the Vietnam Association of Foreign-Invested Enterprises, said that investment regulations needed a breakthrough to attract investors who owned high technology companies and promote the links between domestic firms and foreign-invested companies.

The Ministry of Planning and Investment recently published the draft amendments on its e-portal for public comments.

It said that the goal of amending the two aforesaid laws was to create advantageous, transparent, fair, safe and friendly investment and business environment for every citizens, enterprises and at the same time improve the State management efficiency on doing business activities.