Hanoi (VNA) – Vietnam aims to have 1million businesses by 2020, and to reach this lofty goal, more timely solutionsare needed, according to Minister of Planning and Investment Nguyen Chi Dung.

According to the General Statistics Office(GSO), there were more than 702,700 businesses as of early July, includingnearly 2,500 State-owned firms – down 6.6 percent from 2016. There were morethan 541,700 companies in the non-State sector – up almost 11 percent and some16,170 foreign direct investment (FDI) firms – up 15 percent.

In 2017, the number of new businesses hit arecord of some 126,860, up 15.2 percent from the previous year. Theirregistered capital surpassed 1.2 trillion VND (51.6 million USD), soaring by45.4 percent, while average capital per company reached 10.2 billion VND (439,000USD), up 26.2 percent.

Total pre-tax profit of all businesses exceeded876 trillion VND (37.7 billion USD) last year, up about 23 percent from 2016.

The GSO noted between 2010 and 2017, firms withreal operations increased by 10.5 percent while the number of employees in thissector rose by 5.9 percent annually. Their capital, revenue, profit andcontribution to the State budget hiked 15.4 percent, 15.6 percent, 13.7 percentand 12.4 percent each year, respectively.

Notably, the number of new firms has climbed bymore than 100,000 annually over the last couple of years, over 110,000 in 2016and 126,000 in 2017.

The office said the State-owned sector has beendeclining in both scale and contribution to the budget. Meanwhile, the oppositehas been seen among non-State and FDI firms.

GSO General Director Nguyen Bich Lam saidVietnam’s economy is developing well with a surge in business numbers. This haspartly demonstrated the increasingly favourable investment and business climatein the country.

However, Director of the GSO’s IndustrialStatistics Department Pham Dinh Thuy said up to 96.7 percent of total companiesare non-State firms at a small scale. Although the number of enterprises isgrowing rapidly, most of them are small and medium sized and the number ofmajor ones is falling. As a result, it will be harder for them to join globalproduction chains.

Meanwhile, among the more than 5 millionindividual business households, only 103,000 are eligible to become businesses,he noted.

With current trends, it is difficult for Vietnamto reach the target of 1 million businesses by 2020, Thuy added.

Minister Nguyen Chi Dung urged overhaulingregulations, reducing business conditions that are hampering companies and businesshouseholds’ activities and stepping up administrative reform to help firms beset up and grow.

He said the 5.1 million individual businesshouseholds employ 8.7 million workers. The Government needs appropriatepolicies to encourage them to transform into businesses.

Dung added the quality of human resources alsodecides whether or not the economy is able to develop amid Fourth Industrial Revolution. Therefore, the Cabinet should also align training methods andprogrammes with Industry 4.0.

Thuy recommended the Government maintainmacro-economic stability, improve the investment climate and help companies,especially business households, cooperatives and cooperative groups, to applysci-tech advances and develop manpower.

GSO General Director Lam added in the context ofIndustry 4.0, Vietnam should also issue a tax policy that can facilitatebusinesses’ investment in technology, innovation, product quality improvementand competitiveness.

Meanwhile, Chairman of the Republic of Korea’sChamber of Business in Vietnam Ryu Hang Ha called for clear regulations sincepolicy vagaries, such as in tax policies, greatly affect businesses.-VNA