Pioneering e-registration

illustration photo source internet

Reaping high scores from users

The database system on investment procedures, which incorporates users’ opinions, was initially deployed in 2007, and has thus far undergone three implementation stages.

In this trial period, it took place in seven selected cities and provinces: Hanoi, Ho Chi Minh City, Danang, Vinh Phuc, Hai Duong, Phu Yen, and Binh Dinh.

Since its launch, the e-regulations system has proven to be a useful tool for state management agencies as well as localities in promoting investment, spurring public awareness, and improving the transparency of administrative procedures with a view to luring more foreign investment capital flow for the country’s socio-economic development.

Lawyer Phan Khac Nghiem from Minh Long law office is one of direct beneficiaries of the e-regulations system in Vietnam.

Working as a consultant in investment procedures, Nghiem said the transparency of procedures and expenses was extremely important for his lawyers when working with investors.

He said besides the general information such as procedures and processes relating to business setups or revisions to investment certificates which could be found in relevant legal documents, through the e-regulations system investors could now trace step-by-step guidelines relating to business setup procedures in the seven participating provinces.

In each locality, the investors can get the description of investment procedures into each industrial zone (IZ), hi-tech zone, or sites outside of IZs. The content is also divided into sections for those applying to existing projects, and for first-time investors.

“I just logged onto the system. The procedures are detailed following a step-by-step guide. At each step, I can contact the civil servant in charge of monitoring this step, as well as the information on the requirements, expenses, required processing times, and the legal justification of the step. If complaints exist, I just need to click the ‘Report Incorrect Information’ button. It is very convenient,” Nghiem said.

Also from a user’s point of view, Luu Quang Huy from the VCI law firm gave the Vietnam e-regulations system a high score for user-friendliness. In addition to Vietnamese and English, users can access this information in 90 other languages including Japanese, Korean, and Chinese.

“I used to work as a trade counselor in Japan, so I know what kind of information Japanese enterprises – particularly small- and medium-sized ones – are looking for. Japanese investors want to use their mother tongue as they are often not proficient in English,” Huy said.

Pressures fuel changes

As a raft of new laws came into force on July 1, 2015, including the amended laws on Enterprises and Investment, the Law on Housing and the Law on Real Estate Business, some investors have been concerned about how these new legal documents will be updated in the e-regulations system, and who to deal with if problems arise.

“Investors expect that the steps in each procedure on the system are the standard ones and they can reach their goal by following the steps,” Nghiem said.

Consultants on developing e-regulations in Vietnam have taken this into account.

Frank Gozel, senior advisor at the United Nations Conference on Trade and Development (UNCTAD) said: “When we work with the stakeholders in developing the system, they all express goodwill in providing information or when receiving complaints from investors. This means the local government truly wants to tackle irrationalities to have a competitive business environment. As such, investors will surely benefit from the process.”

Gozel has even forecast that there will be a ‘hidden’ competition among the seven participating localities. They localities have not only made efforts to publicise their business setup procedures in the system, but here the investors can also find specific steps they must follow in each locality.

For example, first-time investors leasing offices outside of IZs in Hanoi have to undergo 22 steps to finalise procedures, in Danang, the steps are reduced to 18 and in Ho Chi Minh City they will need to pass 20 steps.

“Although the steps involved have a common legal basis, differences do exist. The investors will choose the location they find most comfortable,” said Gozel.

Since each procedure shows the name, address and picture of the civil servant in charge of monitoring the process, the pressure will fall on these particular people, and not just the faceless body of the local government agency in charge.

This pressure is expected to bring changes to the thinking and conduct of civil servants in dealing with the administrative procedures on investment and business setups.

“The participating localities will need to spare no effort to ensure their system operates without a hitch; from following the steps, to meeting the required processing time, and new information updates. With seven localities in the system, investors have received seven official commitments from these localities to follow the processes in the system,” said Do Nhat Hoang, general director of the Foreign Investment Agency under the Ministry of Planning and Investment.