Vietnam has dropped one place to rank 99th out of 185 economies in the World Bank’s Doing Business report, released on October 23.
Vietnam has failed to improve its rankings
Economist Pham Chi Lan said after a decade since joining the table, Vietnam has failed to improve its position.
Although Vietnam ranks 108th in terms of ease of starting business, 169th in terms of protecting investors, 138th in paying taxes and 155th in reliable access to electricity.
It also has quite good rankings in six other indicators including standing at 28th in dealing with construction permits, 40th in accessing credit, 44th in enforcing contracts, 48th in registering properties, 49th in resolving insolvencies and 74th in cross border trade.
Vietnam’s efforts in creating more favourable conditions for businesses starting up operations, such as letting firms print their own invoices was recognised, but it did little to improve Vietnam's ranking.
Paying taxes in Vietnam is a big problem with the time needed to prepare and pay tax up totalling 872 hours per year. In addition, firms also said they have to pay 25% more than the nominal tax rates.
Lan expressed her doubts about the construction permit ranking since this is a headache for many investors and one of the main reasons cited for slow progress.
Karim O. Belayachi, co-author of the report said it was a complicated issue so the report only focused on financial problems related to administrative procedures, and whether these problems were big enough to make investors give up on projects, or carry on the construction without permits or not.
Lan also raised her concerns about ease of access to credit and the ranking for tax payments. She said this ranking was not entirely accurate.
Because of huge bad debts, enterprises were encountering difficulties in accessing capital. Furthermore, the bad economic situation which put enterprises into debt had affected the enforcement of contracts.
Vietnam's ranking
