Dr Nam Vinhaket
Business license registration for small and medium size enterprises (SMEs) has become easier as the result of good cooperation between state and private sectors to improve regulations.
Dr Nam Vinhaket
“Today only four sets or forms of documents are needed to set up a business,” Industry and Commerce Minister Dr Nam Vinhaket said on Friday. “In the past more than 10 sets were required.”
Dr Nam was speaking at the 5th ordinary meeting of the SMEs Promotion and Development Committee and National Productivity Organisation, supported by Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ) GmbH.
The improvements were part of the 2006-2010 SME strategy development implementations carried out by the two sectors.
The time taken previously for a business licence to be approved and issued was 60 to 90 days; this has now fallen to just three days. “In any case it must not take longer than 10 days. This is what we are doing to facilitate business,” Dr Nam said.
The fee for business registration has also been cut. It used to cost 100,000 to 200,000 kip, “but now it costs only 40,000 to 90,000 kip,” he said.
SME Promotion and Development Office Director, Mr Somdy Inmyxai, said the office will continue to improve regulations for registration. Other countries use a system that enables applicants to submit documents online via the internet.
“It's possible that we too will have such a system in the near future,” he said.
It also takes less time to obtain permission to export or import goods. It previously took two weeks but now takes less than 5 days. “However, this still seems to be too many days,” Dr Nam said.
In other areas, the Education Ministry has included vocational training in its curriculum, and funding access has been made easier through the Lao Development Bank (LDB) which provides loans to SMEs.
Mr Somdy said not only the LDB provides funding for SMEs, many other banks provide the same service so enterprises have a choice.
Dr Nam said “We can see that the value of credit provided to SMEs rose from 7.3 percent of GDP in 2004 to 22.3 percent in 2009.”
These changes help companies to fast track their development and adopt international standards on good management.
But more is needed to facilitate business start ups.
“Our 2011 to 2015 SME development plan aims to continue the improvement of regulations and encourage greater transparency,” Dr Nam said.
It will also include the upgrading of human resources for both existing enterprises and new ones, especially the staff at banks and consulting agencies whose operations are related to the SMEs.
The SME sector is the basis of the national economy and a backbone of economic growth, involving 99.8 percent of all businesses. For this reason, the government has sought to encourage their growth by improving the legal frameworks that regulate their establishment.