Removing Unnecessary Business Requirements Still Faces Numerous Barriers

Removing Unnecessary Business Requirements: Persistent Barriers Ahead On April 14, after speaking with reporters from Nguoi Lao Dong Newspaper, most people, businesses, and experts agreed that while efforts to cut administrative procedures have been pursued aggressively in recent times, a number of procedures and business conditions still hinder production and business activities. Bottlenecks of “unnecessary licenses” With the rice sector, for more than a year many trading firms have withdrawn from the market due to provisions in Government Decree 01/2025/ND-CP (amending and supplementing several provisions of Decree 107/2018/ND-CP on rice export) requiring an export license. A business owner specialized in exporting agricultural products in Ho Chi Minh City noted that after ST25 rice won the “World’s best rice” award in 2019, the Vietnamese expatriate community and Asian consumers had high demand for samples, creating opportunities for trading companies to participate in export. [Image captions and related visuals describe these regulatory dynamics and industry concerns] The typical export form at that time was a three-party contract (often called entrusted export) involving the importer, the trader, and the licensed rice-exporting company. Normally, the licensed exporter would supply the stock and perform processing and packaging as required; the trader would handle marketing, customer searches, contract signing, and payment collection. “My company used to export 300–400 high-end rice containers per year, but we stopped for a year. Initially, we lost credibility with partners and had to honor contracts,” the respondent said. Subsequently, this rice segment was distributed among many rivals, including foreign firms, because many Vietnamese rice exporters hold licenses but lack commercial capacity. The rationale for not issuing direct rice export licenses is that obtaining a license requires substantial investment and capital, while a firm’s current activities may not necessitate it. Based on this reality, firms urged either scrapping the export-license requirement or allowing a return to the entrusted-export mechanism as before, to exploit smaller but high-value orders. Not only rice, the seafood sector also faces institutional barriers. The Vietnam Association of Seafood Exporters and Producers (VASEP) regularly compiles the difficulties, obstacles, and compliance costs the industry encounters. Recently, in relation to marine economic development and aquaculture, VASEP issued a document outlining numerous administrative-procedure difficulties that raise compliance costs and delay implementation, affecting investment plans and production expansion by firms. Some notable issues include: the absence of a legal mechanism to flexibly change the purpose of imported seafood from production-export, processing-export to domestic consumption and vice versa, causing resource waste and not aligning with customs laws; lack of a legal framework for private investment in irrigation infrastructure and water-cupply/ drainage to serve aquaculture, stalling many private investment projects; mandatory wastewater-hookups for enterprises in industrial parks even when self-treatment meets Vietnamese standards, increasing compliance costs and not reflecting practical needs. Similarly, concerns over the Vietnamese standards for heavy metals in foods (e.g., Cd, Pb, Hg...) fail to distinguish between fresh and dried seafood, complicating the domestic sale of dried seafood. Heavier metal concentrations tend to be higher in dried products due to moisture removal; in contrast, certain markets like the EU and South Korea permit different thresholds for fresh versus dried seafood. To align with international practice and the scientific nature of the products, VASEP proposed the Health Ministry issue a legal document defining a conversion coefficient (based on drying rate) for the maximum permissible levels (MRL) of heavy metals and other contaminants in dried seafood. The Wood Industry: “Bottlenecks” in procedures and tax risks For the wood sector, Mr. Phung Quoc Man, President of the Ho Chi Minh City Association of Wood Processing and Handicrafts (HAWA), stated that exporters face many procedural hurdles proving the legal origin of wood. The process currently involves multiple agencies (forestry, customs) with overlapping steps. The business community called for cutting duplicate paperwork, streamlining lead agencies, and promoting digital traceability of raw materials. In addition, a risk-management approach should be adopted based on firms’ compliance levels, and pre-inspection should be reduced for well-performing units. Businesses also reported tax policy inconsistencies, especially VAT on semi-processed wood. Different local interpretations of VAT treatment create difficulties in determining the correct tax rate, potentially resulting in clawbacks and penalties. Delays in tax refunds and the need to repeatedly supplement documents further strain cash flow and production. According to Mr. Qui, even after firms submit tax documents, officials may later determine that certain transactions do not fall under VAT obligations, forcing firms to issue revised invoices and refund VAT to customers after payment was already made and remitted to the state budget; refunds are often difficult and slow. As a result, firms requested clear, nationwide guidance on buying, processing, and selling raw wood to reduce legal risks, support stable production, and promote sustainable business. “The priority now is not to issue more rules, but to ensure transparency, clarity, simplified procedures, and nationwide consistency,” one business representative stated. (Continued) Related reading and updates follow. (End of excerpt) Note: This is an editorial translation and synthesis of the article’s core points for English readers.