Prime Minister Nguyen Xuan Phuc meets business community in HCM City yesterday. — VNA/VNS Photo Thong Nhat

HCM CITY (Biz Hub) — The business community faces a lot of difficulties and challenges and the Government would like to hear about and resolve them, Prime Minister Nguyen Xuan Phuc told a seminar in HCM City yesterday where he met with top business executives.

In his opening speech, he said, "Vietnamese enterprises create jobs and increase the GDP for the country. They should get the most favourable conditions.

"The Government would like to protect, support and create the most favourable conditions for enterprises to develop and enter the international market. All hurdles caused by the administrative system must be eradicated," Prime Minister Phuc said.

Vu Tien Loc, chairman of the Viet Nam Chamber of Commerce and Industry, said 45.5 per cent out of the 941,000 companies incorporated in the last 15 years have shut down, and only 42 per cent of existing ones profited.

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"It is unusual that less than half the enterprises in an economy make profits," he said.

He called for the next five years to be considered a national "start-up period" and said the Government should do all it can to ensure businesses development.

Loc urged the Government to set up a national action programme to develop businesses through its five-year term of office and made two other demands: strengthening the business community's faith in the Government and restoring its flagging "spirit".

He said there are two urgent tasks: firm administrative and policy action to eliminate risks and bribery and completing the transformation into a market economy.

All 6,000 conditions for doing business in Viet Nam should be widely and publicly announced for would-be entrepreneurs to familiarise themselves with before embarking on business ventures, he said.

Limited access to capital, tax and customs policy uncertainties and the high frequency of raids were other hot issues discussed at the meeting.

Only 60 per cent of small businesses can borrow from banks since the remainder do not have assets to mortgage, and the number plummets to 38 per cent in the case of tiny businesses.

The attendees reserved their biggest criticism for taxation and customs.

Many complained about "unofficial expenses", a euphemism for bribes, saying they account for 10 per cent of a business's total costs.

Speaking about raids of businesses by authorities, many complained that the bigger the company, the more frequently they are raided by various authorities.

Representatives from the Viet Nam Small and Medium Sized Enterprises Association said the Government should soon table the SMEs Support Law in the National Assembly, set up an SME Support Committee, reduce corporate taxes, subsidise bank loans and create conditions that enable SMEs to enter the global supply chain.

"To reduce interest rates on bank loans of enterprises, the State Bank of Viet Nam should reduce bank's statutory reserve to 1 per cent for the dong and 3 per cent for foreign currencies," Tran Bac Ha, chairman of the Bank of Investment and Development of Viet Nam, said.

Tran Ba Duong of Truong Hai Auto Corporation (THACO) said the Government should crack down on tax evasion by companies.

Mai Kieu Lien of Vinamilk said authorities should not think their task is just to supervise companies but instead should support them.

Diep Dung, the chairman of Saigon Co.op, which owns the Coopmart supermarket chain, said the Government should quickly implement measures to protect the local retail market in line with what Viet Nam has agreed in its FTAs and develop a national retail strategy for 2020 –30.

The Japanese Business Association to Viet Nam would like to boost co-operation in software and IT services with Viet Nam, a representative of the business group said.

The American Chamber of Commerce in Viet Nam expressed hope that the National Assembly would approve the TPP in July.

US companies would like to co-operate with Viet Nam in developing human resources, combating climate change, and producing renewable energy.

The European Chamber of Commerce in Viet Nam sought co-operation in renewable energy, pharmaceutical products, automobile and copyright protection.

The Korean Business Association in Viet Nam asked the Government for a flexible policy on foreign workers.

Four deputy Primer Ministers, seven ministers and many representatives from HCM City and Ha Noi authorities took part in the conference titled "Vietnamese enterprises – driving force to develop national economy."

There were executives from 300 local private firms and 100 foreign enterprises attending the event.

Resolutions discussed

Prime Minister Phuc held a special meeting with Cabinet members to discuss proposals and recommendations mentioned in the conference. — VNA/VNS Photo Thong Nhat

Later that same day, Prime Minister Phuc held a special meeting with Cabinet members to discuss proposals and recommendations mentioned in the conference, as well as the construction of a draft Government resolution on business development.

Cabinet members put forward solutions for businesses' proposals, focusing on big issues such as business registration, market participation, credit and loan access, taxes, customs and investment attraction in agriculture and rural areas.

Relevant ministries and sectors committed to become fellow travellers of businesses and promptly deal with businesses' recommendations with the aim of creating the most favourable conditions for businesses to operate.

They agreed to have specific programmes to support and tackle difficulties for businesses.

Participants stressed the need to build a draft Government resolution on business development with the target of having at least one million businesses in Viet Nam by 2020.

They said the resolution should represent the Government's determination in ensuring transparency and publicity, as well as creating policies, mechanisms and legal corridors that make enterprises feel secure in their production and operations.

Phuc asked the heads of relevant ministries, agencies and localities to actively handle difficulties that hinder production and business activities of enterprises.

He also asked them to help build rural and agricultural development policies to create a breakthrough in building new rural areas.

The leader said he wants the business community to elevate their social responsibilities and business ethics and actively work to overcome difficulties on their own with Government support. — VNS