Nghe An supports businesses to develop and create new jobs

Pillar of the economy

According to the Business Registration Office,Department of Planning and Investment, In the first 5 months of 2022, the whole province had 906New business establishment, an increase of 28 enterprises compared to the same period last year. Up to now, the province has a total of 26,330 enterprises established.

Total investment capital of the business sector in the 2016-2020 period was 105.8 trillion VND, accounting for 33.7% of total social investment capital; attracting 625 projects with a total registered capital of over 76 trillion VND.

Entering the 2021-2025 period, although there has been no assessment and there are still many difficulties and challenges, the rate of newly established enterprises is still maintained, the scale of mobilizing and investing resources in production and business is still guaranteed.

People come to supplement documents to change business registration content. Photo: Nguyen Hai

With over 2,000 newly established enterprises each year and an average capital of 4.04 to 8.82 billion VND/enterprise, it means that capital resources of 21-23 trillion VND have been put into production and business, creating more jobs for workers, making a great contribution to the economy.

The complex of Garment Factory and Leather Shoe Production in Nghi Dien Commune (Nghi Loc) needs over 10,000 workers, but due to the impact of the Covid-19 pandemic, it has only recruited 2,000. Photo: Nguyen Hai

Up to now, the contribution rate of the business sector to the gross regional domestic product (GRDP) in 2021 has reached 38%, promoting economic restructuring in the right direction, and significantly improving the efficiency of using economic input factors.

The proportion of agriculture, forestry and fishery decreased from 26.36% in 2016 to 25% in 2021; industry, construction and services increased from 73.8% in 2016 to 75.5%; budget revenue from the business sector continuously increased over the years and accounted for an increasingly large proportion (57-67%) of the total budget revenue; large-scale enterprises in the province made an important contribution to the budget, the number of enterprises with budget revenue of over 50 billion and accounting for a high proportion of total domestic revenue increased gradually over the years.

Need more effective support policies

Although Nghe An has a large number of registered enterprises, in terms of enterprise growth rate, it is quite low, ranking 57th out of 63 provinces and cities. Of the 26,330 enterprises established, only 14,050 are actually operating (as of December 31, 2021), reaching 53.3%.

Besides, the ratio of enterprises per 1,000 working-age people in Nghe An is still modest, currently only reaching 8 enterprises/1,000 people, ranking 27th in the country (the national average is 15 enterprises/1,000 people).

In addition, according to the Enterprise White Book provided by the Ministry of Planning and Investment in 2018, although Nghe An's labor utilization rate ranked 14th out of 63 provinces and cities, the average income was only 5.5-6 million VND/person/month.

Currently, there are 34 projects in the province, of which 15 projects invest in VSIP Industrial Park and 22 projects invest in WHA Industrial Zone 1 - Nghe An, so a lot of technical workers are needed. Photo: Document

According to the representative of the Department of Employment - Labor Safety, Department of Labor - Invalids and Social Affairs, low income is a barrier in attracting,keep workers in their homelandAlthough the enterprises pay wages that do not violate the minimum wage set by the Government, the wages that enterprises pay to provincial workers are quite low, and there are no other incentives such as housing, salary increases, seniority allowances, or responsibilities, so workers are not interested.

Signing of cooperation agreement on training and providing skilled young workers between Vietnam - Korea Technical Vocational College and enterprises, Employment Service Center. Photo: Document

Speaking at the working sessions to contribute ideas to the DraftBusiness Support ProjectBy 2025, the representative of the Department of Planning and Investment affirmed that the preferential and open policies of the State have contributed to encouraging people to invest capital in business, establish enterprises, promote creative startups, thereby creating new jobs in society; on the other hand, he said that the process of production and business activities after registration is still difficult and bumpy, so the rate of enterprises "surviving" after establishment is not high.

After establishment, enterprises do not operate for many reasons but do not report to the licensing authority. The Tax Department always affirms that the number of operating enterprises that the Department knows is the real number, has opened tax code declaration and generated tax revenue through actual operations.

Nghe An provincial leaders award creative start-up prizes to a young enterprise. This is an activity to support and create a start-up ecosystem in the province. Photo: Archive

In addition to the above reality, because the Law does not limit, the content of the application for a business registration license is also quite broad. Except for industries that are in the conditional business field that require additional certificates, people can apply for a license in any field. Although this creates favorable conditions for people and businesses to easily change industries and avoid re-registration, there is also a situation where some subjects take advantage of establishing "ghost" enterprises to buy and sell invoices, or to later conjure up and legalize conditions and legal status to act as "blue team" and "red team" in auctions and bidding sessions...

These types of businesses usually only have a legal representative with a seal, without a headquarters, without a permanent staff or apparatus. The legal representative is a salaried person and is not necessarily the real owner of the company or business, and the documents proving capacity are just temporary notarized documents and papers...

Consulting, connecting and introducing jobs for young workers after vocational training. Photo: Nguyen Hai

Faced with the above shortcomings, when building the Enterprise Development Support Project, the province requested that departments and branches build a database on labor resources so that vocational training schools and localities can orient their children.

Currently, the Program and Project to Support Enterprise Development have been approved by the Party Committee of the Provincial People's Committee and the Standing Committee of the Provincial Party Committee. Along with integrating and continuing the previously deployed packages into the new project in the field of supporting training for entrepreneurs and enterprises, it is necessary to train and enhance the capacity of the team of enterprise management staff (CEO, Accountant, etc.); provide legal support for small and medium enterprises, female enterprises, support for business start-ups, etc. The allocation of resources needs to be more focused and targeted; along with initial support, the province needs to pay attention to support with policies after establishment or investment.

Along with supporting new establishment, Nghe An province and especially Vinh city regularly maintain dialogues with entrepreneurs and businesses to support and remove difficulties in production and business. Photo: Nguyen Hai

According to Mr. Hoang Vinh Truong - Deputy DirectorNghe An Investment, Trade and Tourism Promotion Center(NAPC): In the current period, supporting businesses should focus on supporting digital transformation. In fact, businesses that transform digitally in a timely and appropriate manner will turn “danger” into “safety” and small and medium-sized enterprises will have an advantage in digital transformation.

In addition, provincial authorities need to provide greater support to start-up businesses after business registration in terms of knowledge, potential, and skills before entering the current fiercely competitive market.