A large number of companies, both foreign and domestic, admit to having had to pay “unofficial fees” to do business in Vietnam.
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| Construction industry attracts corruption |
Over 21% of surveyed domestic firms confirmed that they’ve paid extra fees during the registration, approval and finalisation procedures. As many as 40% say they’ve paid “commissions” to increase the possibility of winning government contracts.
Most of the corruption occurs in fast-growth sectors such as telecom.
The ups and downs of equitisation
The Provincial Competitiveness Index of 2010, based on a survey of over 7,300 domestic firms and 1,155 international partnerships in all of Vietnam\'s 63 cities and provinces, shows that the size of the company largely decides the size of the fees.
Larger companies tend to have to pay bribes less frequently than smaller ones. When they do have to pay, however, the amount is usually much higher.
Former state-owned enterprises (SOEs) that have been equitised, or those which are headed by people who have worked at SOEs, often pay “commissions” at a rate 25% lower than other firms. But the number of such firms who pay extra fees for business registration is 27% higher.
Family businesses usually have to pay more for such things as business registration due to the lack of any connections to state agencies.
Trade agreement may minimise corruption
According to studies, it may be the Vietnam-U.S. bilateral trade agreement, and not foreign direct investment, that can help reduce corruption.
At present, international partnerships are regularly forced to pay unofficial fees when doing business in fields that are dominated by domestic firms. These fields include production and agriculture.
On the other hand, areas of business with little competition, such as mining and construction, also commonly command bribes from companies who wish to operate in them.
About 54% of international partnerships operating in service and trade industries have to pay unofficial fees for business registration. This is significantly higher than other sectors. The percentage for domestic firms is lower, at about 20%.
