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The Provincial Competitiveness Index (PCI) in Vietnam

It has been 30 years since the first time Vietnam’s jurisdiction launched regulations on foreign investment with the Law on Foreign Investment in Vietnam 1987. Until now, the Law on Investment 2014 which contains many new and positive regulations has paved an advantageous way for investors. It might be said that foreign investment is one of the key factors encouraging our national economy and contributing to the development of our society. When investing in Vietnam, foreign investors should pay much attention to policies on investment incentives, pros and cons of Vietnam market, growing trend of it and provincial policies as well as related laws… Among them, investment environment is an aspect affecting much on investors.

In order to improve and develop investment environment of Vietnam as well as to provide investors with an subjective grounds when investing in Vietnam, the Vietnam Chamber of Commerce and Industry (VCCI) being supported by the United States Agency for International Development (USAID) introduced the Provincial Competitiveness Index (PCI). This index helps them assess and rank the economic governance of different provinces in Vietnam for the purpose of creating a favorable investment environment for development of private sectors. PCI was first introduced in 2005. After 12 years, annual reports on PCI have encouraged competitive spirits of provincial governances in simplifying administrative procedures and creating favorable conditions for investors. To give foreign investors a clearer look about PCI, Viet An Law Firm provides some main information as follows:

10 sub-indices comprised in PCI are:

  1. Entry costs;
  2. Land access and security of tenure;
  3. Transparency and access to information;
  4. Time costs and regulatory compliance;
  5. Information charges;
  6. Policy bias – New sub-index;
  7. Proactivity of provincial leadership;
  8. Business support services;
  9. Labor training;
  10. Legal institutions.

Foreign investors may find annual PCI reports, PCI ranking of provinces, of each province or of a region on website: www.pcivietnam.org of the Vietnam Chamber of Commerce and Industry.

In 2016, Da Nang still hold its championship, following by Quang Ninh, Dong Thap and Binh Duong. Those are pioneers in attracting foreign investment with many large projects such as industrial parks, export-processing zones. In the same year, some common destination of foreign capital such as Ho Chi Minh City ranked 8th, Hanoi ranked 14th, Vinh Long ranked 6th, Ba Ria Vung Tau ranked 16th, Bac Ninh ranked 17th

The sub-indices shall be scored based on the survey results of local enterprises and foreign-owned enterprises. The survey samples are published on www.pcivietnam.org. PCI provides a subjective look on investment environment of provinces as it is calculated based on actual opinions of enterprises.

PCI was recognized as a tool improving investment environment in Vietnam through Resolution No. 19 issued in 2014, 2015 and 2017 on main duties and measures for improving business environment and enhancing national competitiveness.

Legal consultancy services on enterprises and investment at Viet An Law Firm:

  • Consult about regulations and procedures related to enterprises and investment in Vietnam;
  • Consult about regulations and procedures related to Business Registration Certificate, Investment Registration Certificate, sub-licenses…;
  • Consult about regulations on conditional business sectors and detailed conditions apply to each sector;
  • Draft, submit the application and work with competent agencies when Clients grant authorization;
  • Consult about after-establishing issues such as contracts, Vietnamese labor, foreign labor working in Vietnam, commerce, commercial franchise, intellectual property…

If you are looking for legal advice about legal issues related to enterprises and investment in Vietnam, please feel free to contact Viet An Law firm for more information!

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