Vietnam says it is determined to cut bureaucracy to attract more foreign companies.
Deputy Minister of Science and Technology Bui The Duy told “Nikkei Asia” that the government, for example, would reduce the approval time for some business applications from ten to five days. In another example, he said authorities are prohibited from requiring businesses to submit physical forms if they can be completed online.
According to the minister, the government intends to reduce by 30% the excessive bureaucracy which makes it difficult for foreign investors to operate.
“With digital transformation, we already have many documents digitized,” he said in an interview. “We therefore no longer require the presentation of physical documents.”
Digitalization can reduce processing times and opportunities for direct corruption. The percentage of businesses making “informal payments” has fluctuated since 2021, according to the Provincial Competitiveness Index.
“On the one hand, there is a resurgence in the prevalence of informal costs in a number of areas, including inspections, business licensing and land administrative procedures,” the PCI 2024 report states. “On the other hand, the overall financial burden of these costs on businesses, as a percentage of their revenue, continues to decline steadily.”
Duy said his mission this month was to “simplify all procedures” to help achieve the 30% reduction target, citing the Digital Transformation Act. The National Assembly on Thursday approved the law that penalizes public officials who request paper documents instead of virtual filing, state broadcaster Voice of Vietnam reported.
Vietnam is also undertaking a drastic restructuring that includes reducing the number of provinces and cities from 63 to 34. This measure aims to increase efficiency, but has resulted in a slowdown of some bureaucratic processes in the short term. Some businesses have reported that it now takes three weeks to sign up, instead of three days previously.
Duy said the law provides for the simplification of all bureaucratic procedures. “Regulatory complexity” is the challenge most frequently cited by businesses, said Emma McDonald, Australia’s trade and investment commissioner for Vietnam and Cambodia.
“This may include issues such as obtaining licenses, for example, or purchasing decisions, which may involve many levels and multiple parties,” she said at the Australia-Vietnam Alumni Business Forum held in Ho Chi Minh City on Friday. “It may not be clear who is responsible for the decision and how long it will take. »
Most economic projections for 2026 are below Vietnam’s 10% growth target, including the Asian Development Bank’s 6.4% forecast. Devastating storms have hit Vietnam and neighboring countries in recent weeks, disrupting food production and other activities. U.S. tariffs, in turn, reduced Vietnamese exports such as shoes, even as overall trade increased.
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