Hanoi strives to become national startup center

Prime Minister Nguyen Xuan Phuc (first row, third from R) hands over investment registration certificates to businesses

Impressive investment attraction

At a recent conference titled “Hanoi 2018 - Investment and Development Cooperation”, Hanoi People’s Committee Chairman Nguyen Duc Chung said the capital had maintained a rapid and steady growth rate in recent years (7.15 percent in 2016; 7.31 percent in 2017, and an estimated 7.07 percent in the first half of 2018).

Investment from the domestic private sector accounts for 51.1 percent of total investment in development. So far, Hanoi has seen 2,200 private investment projects with total capital of VND1,070 trillion. By June 15, 2018, more than 4,300 foreign direct investment (FDI) projects had been carried out in the capital with total registered capital of over US$33.3 billion. In 2016, 2017 and the first half of 2018, Hanoi attracted more than US$12.4 billion of FDI, equivalent to 59 percent of the total amount of FDI attracted in the 1986-2015 period.

Hanoi Innovative Business Incubator of Information Technology, StartupCity.vn - a startup ecosystem portal, and Hanoi business information portal have been launched. So far, creative ideas of 14 out of 27 startup teams have been accepted for development. In 2016 and 2017, 47,826 new companies were registered in Hanoi with total capital of VND472.76 trillion. Currently, the capital has more than 250,000 companies.

Hanoi has achieved these results thanks to its administrative reform efforts, which have yielded positive change in the way state officials serve businesses and people. In 2017, the capital moved up 11 places compared with 2015 to rank 13th among 63 provinces and cities nationwide on the provincial competitiveness index; it also went up seven places to second position on the public administrative reform index.

Hanoi has participated in bilateral and multilateral activities and forums with other cities and the capitals of other countries in the region and worldwide. Regional linkages and development cooperation have yielded initial results in healthcare, education, training, trade, tourism, culture and sports. The development of transport infrastructure and agricultural, industrial, trade, service and tourism value chains reflect the effectiveness of such cooperation.

At the 2016 and 2017 investment promotion conferences, the capital presented approval and investment registration certificates for 71 projects. Of these, 62 projects are in the process of site clearance, construction or operation; nine projects are in the process of preparation for investment. Notably, 23 investors have received approval for 34 fresh water supply projects with total capacity of more than 2.10 million cu.m per day, which are expected to provide fresh water access for residents in 94 percent of rural areas in the city. Hanoi is calling for investment in 135 projects. Investment procedures have been completed for 21 projects. Many investors have shown an interest in the remainder.

Addressing the conference, Prime Minister Nguyen Xuan Phuc praised Hanoi’s contributions to Vietnam’s development. “I highly appreciate Hanoi’s pioneering role in building an upright and constructive government willing to serve people and businesses, as well as in creating a favorable business environment. Hanoi has upgraded management to enhance the sense of responsibility and work behavior of state officials. The capital has accelerated e-government building and the application of information technology in administrative reform. The ratio of online business registration has reached 100 percent; electronic tax declaration 98 percent; and electronic customs declaration 100 percent,” he said.

A startup and creativity center

Despite its achievements, Hanoi is facing numerous challenges and difficulties. Economic growth is still not commensurate with potential and not sufficiently sustainable; the quality of growth and competitiveness remain low; economic restructuring is still slow.

Prime Minister Nguyen Xuan Phuc believes a long-term development strategy will help Hanoi create breakthroughs. To attract more investment, in his opinion, the capital needs to concentrate on building a constructive government willing to serve people and businesses, while at the same time creating a favorable environment for business development.

According to Hanoi People’s Committee Chairman Nguyen Duc Chung, the capital will take advantage of Industry 4.0 to increase labor productivity and develop new industries, seeking to become a national startup and creativity center and a smart city.

To achieve this goal, Hanoi continues its efforts to improve the investment and business environment, accelerate administrative reform and increase business support. The capital will make the most of resources to create breakthroughs in infrastructure development, especially transport and framework technical infrastructure. It will tighten linkages with other cities and provinces to tap the potential and advantages of each locality for mutual development.

From August 1, 2018, the entire registration process of new companies will go online. Businesses will simply have to submit their applications via the internet and wait for replies from relevant municipal authorities to be delivered by express forwarding companies, Chairman Nguyen Duc Chung said.