100,000 businesses close in Vietnam

Reading Time: 2 minutes
Market vendors in Bac Ha, northern Vietnam
Market vendors in Bac Ha, northern Vietnam. © Justin Calderon

Around 100,000 businesses will have closed down in Vietnam by the end of 2012, a figure equal to half of the total closures over the past two decades, Vu Tien Loc, Chairman of the Vietnam Chamber of Industry and Commerce, told DTiNews, a Hanoi-based news portal.

The disagreeable business climate that has manifested is a result of incomprehensive polices, a lack of capital and transparency issues, Loc further pointed out, leaving small businesses the most vulnerable.

But a yawning gap in communication between larger businesses and SMEs is seen as the major cause for the community’s derailment.

Clunky state-run companies in Vietnam not traditionally known for their transparency have been accused of causing negative effects on the country’s business environment by leaving start-ups to guess the often-erratic shifts in regulatory policies these industry leaders follow.

In a recent survey that questioned 8,177 enterprises in Vietnam, 90 per cent said that they could not predict the changes being made in macroeconomic policies.

Concerns over the lack of transparency with regulations and plenty of red tape have also made foreign investors increasingly shy away from the Southeast Asian nation once lauded at Asia’s next great manufacturing base.

Another large detriment to business in Vietnam, says Loc, was that the business community is not proactive and often unaware of major international developments in trade.

When a large business council of major companies in Ho Chi Minh City was asked about their preparations for the free trade agreement between ASEAN and China, an area that will reduce import tariffs to 0 to 5 per cent, 42 per cent said they were unaware and another 42 per cent said that they had been informed but were unprepared.

Macroeconomic problems in the form of uncontrollable inflation, a dearth in capital and a gloomy securities market is likely to add further hurdles to Vietnamese businesses.

Loc has proposed reducing VAT for consumers and promoting additional government support in policy interpretation as possible solutions to the country’s business woes.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid

Reading Time: 2 minutes

Market vendors in Bac Ha, northern Vietnam. © Justin Calderon

Around 100,000 businesses will have closed down in Vietnam by the end of 2012, a figure equal to half of the total closures over the past two decades, Vu Tien Loc, Chairman of the Vietnam Chamber of Industry and Commerce, told DTiNews, a Hanoi-based news portal.

Reading Time: 2 minutes

Market vendors in Bac Ha, northern Vietnam
Market vendors in Bac Ha, northern Vietnam. © Justin Calderon

Around 100,000 businesses will have closed down in Vietnam by the end of 2012, a figure equal to half of the total closures over the past two decades, Vu Tien Loc, Chairman of the Vietnam Chamber of Industry and Commerce, told DTiNews, a Hanoi-based news portal.

The disagreeable business climate that has manifested is a result of incomprehensive polices, a lack of capital and transparency issues, Loc further pointed out, leaving small businesses the most vulnerable.

But a yawning gap in communication between larger businesses and SMEs is seen as the major cause for the community’s derailment.

Clunky state-run companies in Vietnam not traditionally known for their transparency have been accused of causing negative effects on the country’s business environment by leaving start-ups to guess the often-erratic shifts in regulatory policies these industry leaders follow.

In a recent survey that questioned 8,177 enterprises in Vietnam, 90 per cent said that they could not predict the changes being made in macroeconomic policies.

Concerns over the lack of transparency with regulations and plenty of red tape have also made foreign investors increasingly shy away from the Southeast Asian nation once lauded at Asia’s next great manufacturing base.

Another large detriment to business in Vietnam, says Loc, was that the business community is not proactive and often unaware of major international developments in trade.

When a large business council of major companies in Ho Chi Minh City was asked about their preparations for the free trade agreement between ASEAN and China, an area that will reduce import tariffs to 0 to 5 per cent, 42 per cent said they were unaware and another 42 per cent said that they had been informed but were unprepared.

Macroeconomic problems in the form of uncontrollable inflation, a dearth in capital and a gloomy securities market is likely to add further hurdles to Vietnamese businesses.

Loc has proposed reducing VAT for consumers and promoting additional government support in policy interpretation as possible solutions to the country’s business woes.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid