Vietnam's business environment 'revolution'

Just before the April 30th - May 1st holiday, the Government issued eight resolutions to reduce, decentralize, and simplify hundreds of administrative procedures and business conditions of ministries and agencies, opening up new development opportunities for businesses.

Reduce costs, increase business opportunities.

With the simultaneous issuance of resolutions, the Government has abolished a total of 184 administrative procedures, decentralized 134 procedures to local authorities, and simplified 349 procedures. Notably, 890 business conditions have been abolished and 4 conditions have been simplified.

Reducing administrative procedures will increase Vietnam's competitiveness in attracting investment capital.

PHOTO: NGOC THANG

For example, the government has eliminated the requirement to collect and update biometric information such as DNA and voice data into the national identity card database at the ministerial and provincial levels. Simultaneously, procedures for issuing electronic identity accounts, electronic identity cards, and security and order permits at various levels have been abolished or heavily decentralized to the local level. The issuance of licenses in the fields of measurement, quality control, postal services, telecommunications, and technical inspection is now delegated to the Chairman of the Provincial People's Committee, and applications are processed through the National Public Service Portal.

In the petroleum sector, the government has implemented cuts and simplifications to a range of business procedures. Some administrative procedures, such as reissuing or adjusting business eligibility certificates, are no longer mandatory in certain cases. Even the healthcare sector has seen significant reductions in administrative procedures related to licensing and the publication of operating conditions. Many services, such as vaccinations, HIV testing, medical practice training, and addiction treatment using substitute medications, no longer require specific business conditions. Simultaneously, the government has abolished requirements for beauty pageants, art performances, and individuals participating in beauty contests abroad. Furthermore, 16 procedures have been decentralized, including licensing for social media, video games, and publications.

This round of administrative procedure reductions is among the largest in recent years, particularly in highly regulated sectors such as petroleum, healthcare, and land. The implementation process is expected to reduce processing time and compliance costs for affected parties by more than 50% compared to 2024.

Previously, a number of ministries and agencies had also implemented administrative procedure reductions. From the beginning of 2026 until now, the Ministry of Construction has continuously reviewed and streamlined a series of overlapping regulations, especially in "hot" areas such as planning, housing, and construction investment. A prime example is the comprehensive digitization of application documents. Since the beginning of the year, instead of requiring hard copies, the Ministry of Construction has integrated population and land data to automatically extract information, eliminating personal identification documents and land use right certificates from permit applications.

In April alone, the Ministry of Construction issued three consecutive decisions related to amending, supplementing, repealing, and issuing new administrative procedures related to the housing sector; the transportation sector; and the maritime and inland waterway sector, focusing on "cleaning up" cumbersome procedures to align with new laws, especially the amended Housing Law and Real Estate Business Law.

For example, the construction industry has been "freed" from the appraisal process when the Ministry announced amendments to procedures related to construction permits and project management, allowing businesses to submit design documents in digital format (BIM) instead of paper drawings, significantly reducing printing and storage costs.

Similarly, in the real estate and housing sector, in mid-April, the Ministry of Construction announced a new and revised list of administrative procedures aimed at simplifying the conditions for purchasing and leasing social housing. Eliminating the step of verifying housing status for those already registered on the level 2 identification system is a significant step forward, reducing waiting times to approximately two-thirds of what they were before.

In the inspection and supervision of construction quality, two procedures related to the acceptance testing of some private projects not using state budget funds have been abolished, aiming to expedite the handover of houses. Many procedures for inspecting and accepting construction projects of level 2 and below have also been completely transferred from the Ministry to local Departments of Construction for them to proactively implement. This eliminates the situation where documents have to be flown to Hanoi, helping projects to be accepted and put into use faster.

Competition to attract investment capital.

Economist Tran Anh Tung (Ho Chi Minh City University of Economics and Finance) assessed: The 8 resolutions on cutting and simplifying administrative procedures and business conditions on a large scale are strong evidence of the Government's determination to build a transparent, convenient, and open investment and business environment to achieve high growth targets. The breakthrough in administrative procedure reform will immediately show a tangible impact by reducing institutional friction – a factor hindering the speed of capital and goods circulation and investment decisions.

Streamlined immigration procedures into Vietnam will create a positive impression on investors, thereby significantly impacting Vietnam's business environment.

PHOTO: HM

Specifically, if compliance costs and administrative processing time are reduced by approximately 50%, then for a 1 trillion VND project, simply shortening the procedures by 3-6 months could save tens of billions of VND in opportunity costs and help cash flow circulate faster. On a national scale, this effect could be equivalent to an increase of 0.5-1 percentage point in GDP growth through improved total factor productivity. The clearest example is the renewable energy sector. Previously, a wind power project had to go through many layers of approval such as planning, land, environment, grid connection, electricity pricing, etc., which could take 2-3 years. When procedures are streamlined and standardized, the time can be reduced to 12-18 months. For a 100 MW project with a total investment of approximately 3,000 - 4,000 billion VND, shortening the project timeline by one year could save investors 200 - 300 billion VND in financial costs and revenue opportunities. More importantly, the power plants would be operational sooner, contributing to solving the energy shortage problem - a "bottleneck" for growth.

Associate Professor Dr. Dinh Xuan Thao, former Director of the Institute of Legislative Research of the National Assembly Standing Committee, affirmed that the Government's drastic reduction of administrative procedures will have a strong impact on the business environment in Vietnam. This is because, recently, institutional issues have been identified as the leading bottleneck, the "bottleneck of bottlenecks," in Vietnam. Institutions encompass everything from lawmaking to subordinate legal documents, regulations, administrative procedures, operating conditions, etc. The National Assembly and the Government have devoted considerable time and resources to perfecting institutions and removing this bottleneck to create momentum for economic development in particular and the country in general.

The most recent and also the first task in the Resolution of the 14th National Congress of the Party is to focus on prioritizing the comprehensive development of institutions, promptly and decisively removing bottlenecks and obstacles, promoting innovation, ensuring synchronicity and harmony between growth and development, and perfecting institutions with key and comprehensive transformations to meet the requirements of rapid and sustainable national development in the new era.

"When the National Assembly enacted the 1990 Company Law and the 1990 Private Enterprise Law, it strongly advocated for the abolition of numerous sub-licenses and business conditions. Later, many related laws also adhered to the spirit clearly stated in the 2013 Constitution, which stipulates that citizens are allowed to do anything that the law does not prohibit. However, over time, many sectors and industries have generated more procedures and conditions, causing citizens and businesses to waste more time," Associate Professor Dr. Dinh Xuan Thao analyzed and emphasized: The government's comprehensive review of regulations in all sectors and industries to eliminate overlapping conditions and simplify procedures demonstrates the strong determination of the Party and State leaders to remove institutional bottlenecks. This will have a very strong impact on Vietnam's business environment, especially for foreign investors. Simply having a quick and efficient immigration process at the international airport will create a good impression, potentially encouraging them to return to Vietnam or support their subsequent investment decisions. If this initial step is difficult and time-consuming, they may not want to return, which will undoubtedly affect their investment decisions in Vietnam.

Creating resources for economic growth.

Creating a transparent business environment, reforming administrative procedures in particular, and removing institutional bottlenecks are considered by many economic experts to be new impetus contributing to achieving the high economic growth targets set by the Party and the Government.

This round of administrative procedure reductions is among the largest in recent years.

PHOTO: NGOC DUONG

Associate Professor Dr. Dinh Xuan Thao analyzed: In many fields, when procedures are simplified, people and businesses will find it easier to comply with the law. For example, many businesses and households are willing to pay taxes, but in the past, many procedures in this sector have remained complicated and cumbersome. This has caused some to fear or try to "evade" the law. When procedures are further simplified, the number of businesses and households paying taxes will certainly increase, significantly reducing compliance costs. Especially with promoting innovation, it is necessary to build flexible and specific institutions, while piloting mechanisms for new economic models such as artificial intelligence (AI), digital economy, green economy, and circular economy. Above all, cutting or simplifying administrative procedures not only reduces time and costs for businesses but also gradually eliminates the "request-and-grant" mechanism, creating a constructive, modern government that supports businesses. This, in turn, helps to facilitate and encourage businesses to confidently expand their operations when they have confidence in the business environment and the stability of the legal system.

Associate Professor Dr. Dinh Xuan Thao emphasized: Improving the institutional framework will create a transparent and stable business environment. More importantly, cutting down on the "request-and-grant" mechanism and changing the "if you can't manage it, ban it" mindset will create the highest level of confidence for businesses. With confidence, both domestic and foreign businesses will invest boldly, and people will participate in business in many sectors. This will enable Vietnam to mobilize all resources in the process of driving its economy to higher levels in the coming period.

According to economist Tran Anh Tung, drastically reducing administrative procedures is a very strong policy message from the Government that institutional reform cannot be delayed. In the context of a volatile global economy and rapidly shifting investment flows, if Vietnam reacts 3-6 months late, the opportunity may have gone to another country. From an economic perspective, this helps reduce the "policy lag"—the gap between identifying a problem and implementing a solution. When the lag is reduced, the economy reacts more quickly to external changes, businesses can make decisions sooner, thereby improving the efficiency of resource allocation. For example, if an FDI enterprise is considering a location for a $200 million investment, shortening the licensing time from 9 months to 4 months could be a decisive factor in keeping the project in Vietnam. But the greater impact lies in market confidence. When the government acts quickly and decisively, businesses will feel supported, thus confidently expanding investment, recruitment, and production. People will also feel secure in pursuing wealth, as institutional barriers are removed.

Once institutional bottlenecks are removed, the business environment will become more open, and Vietnam will increase its competitiveness in attracting domestic and foreign investment compared to before.

Associate Professor Dr. Dinh Xuan Thao

In economics, trust is a crucial form of intangible capital. When trust is strengthened, money flows back into the market, private investment increases, and the spillover effect can be far greater than the value of mere bureaucratic streamlining.

Economist Tran Anh Tung

Many ministries and agencies continue to cut down on administrative procedures.

Many ministries and agencies continue to propose abolishing additional business licenses in various sectors. Specifically, the Ministry of Finance is seeking feedback on a draft Government Resolution on reducing conditional investment and business sectors. In the draft, the Ministry of Finance proposes further eliminating business licenses for 58 sectors in areas such as accounting services, duty-free goods, reinsurance, insurance brokerage, casinos, and betting; eliminating licenses for rice exports; and potentially eliminating licenses for karaoke and nightclub businesses…

Similarly, the draft Resolution on reducing and simplifying administrative procedures and business conditions under the management of the Ministry of Science and Technology is also considered to demonstrate a very strong determination. Notably, the draft has eliminated 100% of unnecessary, contradictory, overlapping, or vague business conditions. Accordingly, 120 administrative procedures are expected to be abolished, 73 procedures will be decentralized, and 191 business conditions will be reduced across many fields such as telecommunications, internet, postal services, information technology, standards and quality measurement, technology transfer, and nuclear radiation safety…

Source: https://thanhnien.vn/cuoc-cach-manh-moi-truong-kinh-doanh-viet-nam-18526050221553129.htm