Red tape remains biggest obstacle to doing business in Vietnam: survey

Experts and businesses have all too often lamented that superfluous formalities and corrupt government agencies remain one of the biggest problems plaguing companies in Vietnam. It is now serious enough for a senior government official to use strong words when he disparaged the deep-seated problem.

Mai Tien Dung, Minister and Chairman of the Government Office, said at a conference in Ho Chi Minh City on Monday that despite many directives on administrative reforms, officials in Vietnam have been “slow” to change.

“Abuse of laws and arbitrary behavior in public offices are still very common,” Dung said, as cited by Tuoi Tre (Youth) newspaper.

According to a survey released at the conference, around 73 percent of businesses polled confirmed that red tape is the biggest obstacle they faced in Vietnam.

Of the 100 businesses surveyed, 64 said "authorative" agencies were frustrating, while 46 percent said they were troubled with overlapping demands, according to the survey commissioned by the Advisory Council for Administrative Procedures Reform, which consists of government officials and business association representatives. 

Dung said many government agencies do not communicate with one another, so overlapping procedures force businesses to pay multiple times for one single paper.

One company had to spend VND15 trillion ($660 million) a year on customs checks, Dung said, without naming names, to prove his point that superfluous formalities in Vietnam render its businesses uncompetitive. Most businesses in Vietnam are small and medium sized, with registered capital of up to VND100 billion.

Ha Cong Tuan, vice minister of agriculture, backed Dung's argument, saying businesses find it much harder to access government support now.

A business investing in high-tech farming will have to go through 16 doors and 40 procedures to finally win the privilege it legally deserves, Tuan said. 

In Vietnam, the practice of passing money under the table is so common many don't consider it bribery, but an inevitable part of getting things done. For years studies have confirmed what everyone in the country knows: Bribery is bad and getting worse.