Business confidence is expected to improve in 2017, following the Government’s hastened reform efforts aiming to create momentum for firms and boost start-up entrepreneurship.

After a year of record firm foundations, which is considered a silver lining although the country failed to meet its growth target, the Government signaled ongoing determination to improve the business climate and national competitiveness this year.

“I believe that business confidence will strengthen and help boost economic growth,” said Tran Thi Hong Minh, Director of the Business Registration Department under the Ministry of Planning and Investment.

Convenience in setting up firms - such as free online business registration from the beginning of this year - will promote private investments into the economy, Minh said.

According to the General Statistics Office, 8,990 new firms were founded in January with a total registered capital of VND90.3 trillion (US$4.01 billion), representing increases by 8.1 per cent and 52.3 per cent, respectively, over the same month of last year. Registered capital averaged VND10 billion, a whopping rise of 40.9 per cent.

Existing firms registered to increase capital by a total of VND114.6 trillion in January, statistics showed. In addition, over 5,560 firms resumed operation, up by 14.2 per cent.

The reform effort is being geared up across many sectors. Minister of Finance Dinh Tien Dung said that finance-related policies will continue to promote private investment and business foundation, especially start-ups.

Dung added that the ministry will focus on issuing policies which will encourage the application of technologies to create high-added value products.

The number of new firms hit a record of more than 110,000 in 2016, two years since the amended laws on Enterprise and Investment came into force.

The ministry’s statistics showed that it now took an average of only 2.9 days to handle procedures for setting up a firm. All business registration status were now updated on a national information system.

However, new firms are mainly of small and medium sizes with the average registered capital of around VND8 billion.

“It is critical to improve the climate to create condition for businesses to grow,” Minh said.

Tran Dinh Thien, Director of the Viet Nam Institute of Economics said that the record number of 110,000 new firms in 2016 was just a number. “It is more important how to develop strong private companies in the next five years, which will become the backbone of the economy,” he said. — VNS