Hanoi has taken key measures such as developing infrastructure, streamlining administrative procedures, offering tax incentives, speeding up digital transformation, and elevating its business environment index. Together, these initiatives aim to make the city more appealing for potential investors.

Chairman of the Hanoi People's Committee Tran Sy Thanh (second from right) visits Meiko Vietnam Company. Photo: Huy Kien/The Hanoi Times

Over the years, Hanoi has consistently maintained a prominent position in the country's list of favorable investment environments.

This sustained trend has contributed to a progressive rise in confidence among both domestic and foreign investors. The city’s Provincial Competitiveness Index (PCI)  continues to improve, rising from a ranking of 51 out of 63 in 2012 to a remarkable ninth out of 63 states and cities in 2018-20.

As for  the PAPI Index (Provincial Governance and Public Administration Performance Index),  Hanoi achieved a score of 44.45 points for 2021, ranking ninth nationwide and among the top 15 provinces and cities with high composite scores.

This trend continued in 2022, with Hanoi scoring 43.9049 points, ranking among the leading  provinces and  first-tier cities in terms of high efficiency in public administration.

Sectors directly related to business, such as taxation, customs, social security, and electricity, have received support to minimize time and costs for businesses. It is worth noting that the city has reduced the process of issuing business codes for new companies to less than 30 minutes. 100% of businesses file tax returns online, and the exchange of information with businesses through e-mail channels has reached the same level. The vast majority, 99.9%, of enterprises pay social security and health insurance contributions electronically.

In addition, Hanoi prioritizes interactions, dialogues, and solutions that reduce obstacles for enterprises and investors in their production and business activities. This approach ensures a conducive environment for businesses to confidently invest in the city.

Deputy Director of the Department of Planning and Investment, Nguyen Ngoc Tu, underscored the city's commitment to supporting human resources training for small and medium-sized enterprises.

Specific efforts include improving knowledge for household businesses and providing training in start-up and management skills, he noted.

Hanoi's persistently thorny areas, such as access to land and the issuance of property certificates, have undergone substantial and favorable reforms for the benefit of businesses and the general public.

The time required to issue property deeds has been significantly reduced from 30 days to just 14 days. In the area of credit, Hanoi has executed a successful program to facilitate links between banks and businesses. The city has also proactively promoted cashless payments, especially for public services such as taxes, electricity, water, school fees, hospital fees, and social security contributions.

Promoting digitization

Enabling investment attraction and business facilitation in Hanoi depends on the strategic implementation of digital transformation. Currently, Hanoi ranks second in the country's e-commerce index ranking, about 78% of the adult population owns smartphones, and about 90% of households have broadband internet access.

In 2023, the city is poised to launch three key systems: a three-tier interconnected information system tailored for handling administrative procedures (commonly referred to as "one-stop-shop" software), document management software, and Party management software.

In early February 2023, Hanoi inaugurated its shared information and application system. Tran Sy Thanh, Chairman of the Hanoi People's Committee, emphasized the importance of the timely activation of this system, highlighting Hanoi's unwavering commitment to implementing the "National Digital Transformation Program" by 2025, with a vision to 2030, as outlined by the government.

"The deployment of this application is expected to usher in transformative changes in administrative reforms, aiming to ensure transparent, efficient, and effective government operations that provide the best service to both citizens and businesses," Thanh said.

It also serves as a powerful support tool for the city's governance system, promoting timely, unified and transparent management and administration. It also ensures a clear mandate, defined tasks, clear responsibilities, clear progress, and tangible efficiency, all supported by the use of databases and digital technology.

Focus on infrastructure development, business support

After 15 years of expanding administrative boundaries, one notable result has been the downsizing of Hanoi's bureaucratic apparatus, which has acted as a driving force for economic progress.

Dau Anh Tuan, deputy secretary general of the Vietnam Chamber of Commerce and Industry (VCCI), notes that in the long run, geographic expansion brings an additional benefit - the scope for growth in the knowledge economy.

"The expansion can therefore provide opportunities for the city to cultivate areas characterized by higher value-added, which in turn require more intellectual resources," Tuan said.

Hong Sun, chairman of the Korean Business Association in Vietnam (KORCHAM), asserts that Hanoi stands out as a highly attractive destination for investors from various countries, including Korea.

"Over the years, Hanoi has consistently remained among the top choices for investors and has maintained a leading position in attracting investment. Investment attraction policies, both at the government and Hanoi levels, are evolving to create a more conducive environment for businesses and investors," he said.

However, there are certain challenges that the capital has to surmount. Acquiring space in Hanoi has become more complicated, accompanied by increased costs for land rental and purchase, as well as labor costs.

Deputy Chairman of the Hanoi People's Committee Nguyen Manh Quyen said the city is actively formulating plans to expand industrial zones and clusters to complement the capital's overarching development strategy. It is also preparing to take over management of the Hoa Lac Hi-Tech Park from the Ministry of Science and Technology.

"The focus includes strengthening transportation infrastructure, electricity availability, and telecommunications and information networks to attract investors," Quyen said.

With a commitment to transparency, Hanoi disseminates industrial planning, zoning plans, and land use strategies in various accessible formats for businesses to learn investment-related information. Notably, the city is in the process of recalibrating its comprehensive plan to 2030, with a vision to 2045, to create new epicenters of growth, Quyen said.

Specifically, Hanoi's plan includes the north of the Red River, which includes districts such as Me Linh, Dong Anh, and Soc Son. This zone thrives on trade, services, foreign interactions and international transactions, capitalizing on the influence of Noi Bai International Airport. West Hanoi, which includes the Hoa Lac and Xuan Mai areas, is planned primarily for science, technology, education, and training. There are also plans to build a second airport to the south of the capital.

Of notable importance, the Ring Road 4 - Capital Region  project plays a pivotal role in strengthening regional connectivity and cooperation while catalyzing urban expansion. This initiative is a powerful catalyst of immense value for socio-economic progress, effectively stimulating both domestic and foreign investment.