HÀ NỘI — A comprehensive review of conditional business sectors and tighter control over sub-legal regulations could help remove hidden compliance costs and reduce barriers for women-owned small businesses, experts and lawmakers said.

Women-owned businesses account for about 20-24 per cent of all companies in Việt Nam, with most operating as small and medium-sized enterprises (SMEs) or household businesses, according to data from the General Statistics Office and the Vietnam Chamber of Commerce and Industry (VCCI).

While these businesses contribute significantly to job creation and household incomes, they are particularly vulnerable to administrative barriers. More than half of SMEs spend substantial time and incur informal costs dealing with licensing procedures, according to the Provincial Competitiveness Index survey.

Such barriers could have a disproportionate impact on women entrepreneurs, who often combine business responsibilities with family duties and operate with more limited capital and business networks.

Lengthy procedures therefore could create higher opportunity costs and time pressures, potentially discouraging women from starting or expanding businesses.

Tackling hidden business conditions

Some women entrepreneurs in the service sector face additional requirements that emerge only after a business has been established.

Ngọc Diệp, who runs a small vocational training and consulting business in Hà Nội, said her business activity was not on the list of prohibited sectors when she registered.

During operations, however, she encountered requirements under sub-legal regulations covering classroom sizes, practical equipment, instructor qualifications and compliance inspections.

The cost of compliance and the time spent meeting hidden conditions were more expensive than the initial investment, Diệp told phunuvietnam.vn, adding that her business was often concerned about potential violations without knowing clearly how to address them.

Similar problems could arise in sectors with a high proportion of women entrepreneurs, including consulting and training, healthcare, occupational safety training and domestic services.

According to Đậu Anh Tuấn, deputy secretary-general of VCCI, Việt Nam currently has hundreds of conditional business sectors, with some regulations serving largely formal purposes while increasing market-entry costs.

This particularly affected service industries, which have traditionally attracted a large number of women entrepreneurs, Tuấn said.

Nguyễn Quang Đồng, director of the Institute for Policy Studies and Media Development, said reforms to administrative procedures should measure the actual time required to complete an application from start to finish.

In some cases, applications were recorded in administrative systems as having been processed on time, while businesses had actually been required to make multiple revisions or submit additional documents.

Such repeated procedures extended the effective processing time and increased compliance costs, creating particular difficulties for small businesses, especially women-owned, with limited financial and human resources, Đồng spoke to the online newspaper. 

Cutting conditional business sectors

The issue has attracted particular attention in the National Assembly as it considers a draft law amending and supplementing Article 6 and Appendix IV of the Investment Law.

The draft proposes removing 58 conditional investment and business sectors, equivalent to nearly 29.3 per cent of the current list.

The proposed cuts target several service sectors, including accounting, tax consultancy, occupational safety training, and some community training and care services - areas that employ a high proportion of women.

Removing these activities from the list of conditional business sectors would lower market-entry barriers and reduce the costs associated with applications and approvals. It then could also help more women move from informal economic activities into formal businesses, making it easier for them to establish legitimate businesses and gain greater control over their livelihoods, experts said. 

During National Assembly discussions, delegate Lê Hoàng Anh of the Gia Lai delegation said the key issue was not simply the number of sectors removed, but how the reform was implemented to prevent regulatory gaps and the emergence of disguised business conditions through circulars and decrees.

Delegates Nguyễn Văn Huy of the Hưng Yên delegation and Phan Thị Mỹ Dung of the Tây Ninh delegation called for a unified and objective set of criteria to comprehensively review business conditions and remove outdated barriers to market entry.

Nguyễn Thị Việt Nga, a National Assembly delegate from Hải Phòng, said that alongside the removal of business conditions, the drafting agency should issue clear transitional guidelines to prevent confusion and additional informal costs for small businesses, particularly women-owned enterprises.

Speaking from her practical experience, Thu Trang, owner of a handicraft production and export processing facility in Bắc Ninh Province, welcomed the removal of sub-licences but warned that the reform must not simply shift the compliance burden from licensing to inspections.

If we eliminated one initial licence and then had to prepare documents every month for different inter-agency inspections, the burden would become even greater, Trang said. 

For women business owners who must manage production while also taking care of their families, spending substantial time responding to repeated inspections could drain the facility’s operational resources, she said. — VNS