Introduction

Overview
There are differences highlight the unique characteristics and challenges faced by
Vietnam and Mexico in their respective economic development paths. Understanding
these distinctions is crucial for policymakers and investors seeking to engage with
these dynamic economies.
Task responsibility

Name Role Description

 Responsible for the content

Le Vu Hoang
“Overview of EDB” and “Overview of
Vietnam and Mexico”

 Responsible for the content “ starting

Le Thi Ha An
a business” and “ dealing with
construction permits”
 Report editing

 Responsible for the content” getting

Ho Thi Thanh Uyen
electricity” and “regestering property”

 Responsible for the content “getting

Hoang Thi Thuy
credit” and “protecting minority
Ngan
investors”

 Responsible for the content “paying

Nguyen Hong Nhu
taxes” and “trading across borders”
Y

 Responsible for the content

Hoang Tran Van
“enforcing contract” and “resolving
Thanh
insolvency”

Table of Contents
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Chapter I: Overview of EDB.............................................................................................................3
1. What is EDB?.............................................................................................................................4
2. What aspects does EDB measure?......................................................................................4
Chapter II : Overview of Vietnam and Mexico................................................................................6
Chapter III : EDBI of Vietnam and Mexico......................................................................................6
1.Starting a business...................................................................................................................6
2.Dealing with construction permits........................................................................................8
3. Ability to get electricity:..........................................................................................................9
4. Registering property:............................................................................................................10
5. Getting credit:.........................................................................................................................11
6. Protecting minority investors:............................................................................................12
7. Paying Taxes...........................................................................................................................13
8. Trading Across Borders........................................................................................................13
9. Enforcing Contracts:.............................................................................................................15
10. Resolving Insolvency:.........................................................................................................15

Content

Chapter I: Overview of EDB

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1. What is EDB?

Ease of Doing Business Index (EBDI) is an index proposed by the World Bank. This
is a composite number that includes various parameters that determine the ease of
doing business in a country. The ease of doing business index refers to an
assessment of rules that directly affect business, not directly reflecting general
conditions such as a country's proximity to a large market, infrastructure
characteristics, inflation or criminal. A high ranking indicates that the rules for
business are better, simpler, and protect property rights stronger.

2. What aspects does EDB measure?

The ease of doing business index refers to an assessment of rules that directly affect
business, not directly reflecting general conditions such as a country's proximity to a
large market, infrastructure characteristics, inflation or criminal. A country's ranking is
evaluated based on the average value of the following 10 indicators:

2.1 . Starting a business:

Starting a business is the process of an individual or group of individuals exploiting

commercial opportunities with creative ideas such as: Bringing new products and
services to market, improving existing production processes or methods. . This
process is often accomplished through a new organization (forming a company), but
can also occur within an established business that is undergoing a significant change
in product or strategy.

Measurement standards: Legal procedures, time, capital and minimum business

value according to regulations.

2.2. Register business license:

Business license (GPKD) is a common term when people refer to the conditions for
being allowed to do business. However, this name does not accurately represent the
type of certain documents involved.

Often people use “business license” to refer to the Business Registration Certificate.
A business registration license is considered a document that allows individuals and
organizations to operate business, when they fully meet the business registration
conditions according to the provisions of current law. According to the Enterprise Law
2020, for domestic businesses, registration will not be limited except for conditional
business lines.

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Mandatory requirements: legal procedures, time and cost of verification & issuance
of business license (industrial construction)

2.3. Labor costs & labor scarcity

Calculation criteria: difficulty level on labor costs and flexibility index on labor time
agreements.

2.4. Register ownership

Registering intellectual property is one of the extremely important and truly

necessary tasks for the owner to be able to protect the intellectual property he or she
creates. Registering it will always give the customer the exclusive right to use the
registered product

Mandatory requirements: procedures, time and costs when registering commercial

real estate assets as real land.

2.5. Credit deduction level

Effectiveness index of legal regulations, credit information disclosure index.

2.6. Level of protection of investors' interests:

Expressed through the scope of rights and legal responsibilities of business

managers and major shareholders.

2.6. Tax burden to pay

Taxes payable, time spent on administrative procedures in tax payment, ratio of tax
payable to total net profit.

2.8. Vertical & cross-border trade activities

Number of documents, number of signatures and time required to complete each

export or import transaction.

2.9 Level of contract enforcement:

Requirements: procedures, time & costs to enforce an outstanding loan agreement.

2.10. Termination of business: time & costs when declaring business closure or
bankruptcy

assets & tax refund levels

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 Chapter II : Overview of Vietnam and Mexico
1. About Vietnam

Vietnam,officially the Socialist Republic of Vietnam (SRV), is a country at the eastern

edge of mainland Southeast Asia, with an area of about 331,000 square kilometres
(128,000 sq mi) and a population of over 100 million, making it the world's fifteenth-
most populous country. Vietnam shares land borders with China to the north, and
Laos and Cambodia to the west. It shares maritime borders with Thailand through
the Gulf of Thailand, and the Philippines, Indonesia, and Malaysia through the South
China Sea. Its capital is Hanoi and its largest city is Ho Chi Minh City (commonly
referred to by its former name, Saigon).

2. About Mexico

Mexico, officially the United Mexican States,is a country in the southern portion of
North America. It covers 1,972,550 km2 (761,610 sq mi),making it the world's 13th-
largest country by area; with a population of almost 130 million, it is the 10th-most-
populous country and the most populous Spanish-speaking country.Mexico is
organized as a federal constitutional republic comprising 31 states and Mexico City,
its capital. It shares land borders with the United States to the north, with Guatemala
and Belize to the southeast; as well as maritime borders with the Pacific Ocean to
the west, the Caribbean Sea to the southeast, and the Gulf of Mexico to the east.

Chapter III : EDBI of Vietnam and Mexico

1.Starting a business

Starting a business in Vietnam and Mexico can be influenced by various factors,

including the ease of doing business in each country. The World Bank's "Doing
Business" report provides valuable insights into the regulatory environment and
procedures involved in starting a business. Let's explore the key steps and
differences in starting a business in Vietnam and Mexico according to the "Doing
Business" report:

Indicator Vietnam Mexico

6
Company The process of registering
Registration a new business involves
several steps. These
typically include obtaining
an investment registration
certificate, registering the
company name, notarizing
the company's seal, and
obtaining a business
registration certificate from
the Department of Planning
and Investment.
Time and Cost Taking an average of 15
days and involves a cost
equivalent to 6.2% of the
country's income per
capita.
Procedures The process may involve
multiple procedures, such
as obtaining various
permits, registering with tax
authorities, and opening a
bank account.
Online procedures Vietnam has made efforts
to streamline business
registration procedures by
introducing online
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The process of starting a
business typically
involves registering the
company with the Public
Registry of Commerce,
obtaining a tax
identification number from
the Federal Taxpayer
Registry, and registering
for social security.
Taking an average of 8
days and involves a cost
equivalent to 6.7% of the
country's income per
capita.
The process may require
multiple procedures,
including obtaining
various permits,
registering with social
security and tax
authorities, and obtaining
licenses or permits
specific to the industry.
Mexico has also
implemented online
platforms to streamline
business registration
 platforms. However, the
effectiveness and
accessibility of these
platforms may vary.
processes, although the
accessibility and
efficiency of these
platforms may vary
across regions.

Overall, while there are similarities in the steps involved in starting a business in

Vietnam and Mexico, entrepreneurs should be aware of the specific regulatory

requirements and procedures in each country to navigate the process effectively.

Additionally, consulting with local legal and business advisors can provide valuable

insights and assistance in setting up a business in either Vietnam or Mexico.

2.Dealing with construction permits

Indicator Vietnam Mexico

Procedures: According to the "Doing In Mexico, obtaining

Business" report, obtaining
construction permits in Vietnam
involves multiple procedures,
including obtaining approvals
from various authorities such as
the Department of Construction,
Fire Department, and
Environment Department.
construction permits
typically involves
obtaining approvals from
municipal authorities,
such as the Urban
Development
Department and the
Construction Regulation
Office.

Time and Cost: The process of dealing with According to the "Doing
construction permits in Vietnam Business" report, dealing
may take an average of 166 with construction permits
days, and it may cost around in Mexico may take an

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 32.9% of the project's value. average of 88 days, and
it may cost around 4.6%
of the project's value.

Regulatory Vietnam has made efforts to Mexico has implemented

Environment: improve the transparency and
efficiency of the construction
permit process by introducing
online platforms for permit
applications and approvals.
However, bureaucratic hurdles
and delays may still be
encountered in practice.
reforms to streamline the
construction permit
process and reduce
administrative burdens.
The introduction of
standardized building
codes and online
platforms for permit
applications has
contributed to improving
the regulatory
environment for
construction projects.

General, while Vietnam and Mexico both face challenges in dealing with construction

permits, Mexico generally offers a more efficient and streamlined regulatory

environment for construction projects compared to Vietnam. However, entrepreneurs

and investors should consider the specific requirements and practices in each

country when planning construction projects to ensure compliance and minimize

delays.

3. Ability to get electricity:

According to Doing Business 2020, Vietnam ranked 27/190 with a score of 88.
Meanwhile, Mexico ranked 106/190 with a score of 71,1.

Indicator Vietnam Mexico

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 Procedures (number) 4 7

Time (days) 31 100

Cost (% of income per 994,2 264,4

capita)

Reliability of supply and 7 7

transparency of tariff
index (0-8)

Through the data analysis of Doing Business, on the criteria of ability to get
electricity, it is much easier to get electricity in Vietnam than in Mexico. Vietnam
ranks 27th out of 190 countries, while Mexico ranks 106th. The procedures in
Vietnam are simpler (4 vs 7) and take much less time (31 days vs 100 days). The
cost of getting electricity in Mexico is also lower in Vietnam (994.2% of income per
capita vs 264.4% of income per capita). Both countries have relatively high reliability
of supply and transparency of tariffs (7 out of 8 for Vietnam and Mexico).

4. Registering property:

According to Doing Business 2020, Vietnam ranked 64/190 with a score of 71,1.
Meanwhile, Mexico ranked 105/190 with a score of 60,2.

Indicator Vietnam Mexico

Procedures (number) 5 8

Time (days) 53,5 39

Cost (% of value) 0,4 5,9

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 Quality of the land 14 16,3
administration index (0-
30)

Through the data analysis of Doing Business, on the criteria of registering property, it
is also easier in Vietnam than in Mexico. Vietnam ranks 64th out of 190 countries,
while Mexico ranks 105th. There are far fewer procedures to complete in Vietnam
(53.5 vs 8). It takes less time to register property in Vietnam (39 days vs unknown for
Mexico). The cost of registering property is much lower in Vietnam (0.4% of property
value vs 5.9% of property value). Transparency is slightly better in Mexico (16.3 out
of 30) than in Vietnam (14 out of 30).

5. Getting credit:

According to Doing Business 2020, Vietnam ranked 25/190 with a score of 80.
Meanwhile, Mexico ranked 11/190 with a score of 90.

Indicator Vietnam Mexico

Strength of legal rights 8 10

index (0-12)

Depth of credit 8 8
information index (0-8)

Credit registry coverage 59.4 0

(% of adults)

Credit bureau coverage 20.6 100

(5 of adults)

Through data analysis from Doing Business 2020, in the Getting Credit criteria,
Vietnam has a lower ranking than Mexico. Regarding the Strength of legal rights
index, Mexico is higher than Vietnam but not significantly. Regarding the Depth of
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Credit Information index, borrowers of the two countries have equivalent access to
their data. Meanwhile, the coverage index of the Credit Registry in Vietnam is higher
than that of Mexico. In Mexico, that index is completely 0. However, Mexico's Credit
bureau coverage index achieved a perfect score and was 5 times higher than
Vietnam's.

6. Protecting minority investors:

According to Doing Business 2020, Vietnam ranked 97/190 with a score of 54.
Meanwhile, Mexico ranked 61/190 with a score of 62.

Indicator Vietnam Mexico

Extent of disclosure index (0-10) 7 8

Extent of director liability index (0-10) 4 5

Ease of shareholder suits index (0-10) 2 5

Extent of shareholder rights index (0-6) 4 5

Extent of ownership and control index (0-7) 5 5

Extent corporate transparency index (0-7) 5 3

Through analyzing data from Doing Business 2020, it can be seen that the figures
forming the Protecting Minority Investors criteria of Vietnam are lower than those of
Mexico. The level of Extent of Disclosure indicates that the extent to which investors
are protected through the disclosure of ownership and financial information is
marginally higher in Mexico. The level of Extent of Director Liability is measured
when board members may be responsible for damages caused by transactions with
related parties and sanctions in Vietnam are lower than in Mexico but the difference
is .That difference is not much. Besides, the level of Ease of Shareholder Suits in

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Mexico is 2.5 times higher than in Vietnam. It measures shareholders' ability to sue
officers and directors for misconduct. Talking about the Extent of Shareholder Rights
index, the role of shareholders in important company decisions in Mexico is still
higher than in Vietnam. As for the Extent of Ownership and Control index, in the two
countries there are similarities in the rules governing the structure and change in
corporate control. And the Extent Corporate Transparency index level represents a
company's transparency in terms of ownership shares, compensation, auditing and
financial outlook. On this index, Vietnam is nearly 2 times higher than Mexico

7. Paying Taxes

According to Doing Business 2020, Vietnam ranked 109th in 190 countries, with a
score of 69, and in Mexico, ranked as 120/190 with a score of 65.8.

Indicator Vietnam Mexico

Payments (number per 6 6

year)

Time (hours per year) 384 241

Total tax and contribution 37,6 55,1

rate (% of profit)

Through data analysis from Doing Business 2020, in the criteria of Mexican tax
burden is lower than Vietnam, although the same number of payments in the year,
Vietnam has more time to pay taxes than Mexico 143 hours, total tax And the
contribution rate in Vietnam is 17.5%lower than Vietnam. From there, we can see the
tax burden of businesses in Vietnam market softer than the Mexico market8.Trading
Across Borders

8. Trading Across Borders

According to Doing Business 2020, the ranking of Vietnam is 104/190 with a score of
70.8 and Mexico achieved a score of 82.1 and ranked 69th in 190 countries.

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 Indicator Vietnam Mexico

Time to export: Border compliance 55 20

(hours)

Cost to export: Border compliance 290 400

(USD)

Time to export: Documentary 50 8

compliance (hours)

Cost to export: Documentary 139 60

compliance (USD)

Time to import: Border compliance 56 44

(hours)

Cost to import: Border compliance 373 450

(USD)

Time to import: Documentary 76 18

compliance (hours)

Cost to import: Documentary 183 100

compliance (USD)

Through data analysis from Doing Business, in Trading Across Borders, Mexico has
a higher rank than Vietnam. In Mexico, in the process of export, businesses only
take a total of 28 hours for relevant documents and procedures at the border, only ¼
compared to Vietnam, with the total cost for the export. The aperture is 31 USD

14
higher than Vietnam. As for the import process, in Mexico, businesses spend a total
of 68 hours for the entire process of processing documents and border procedures, 2
times faster than in Vietnam, the total cost for the import process. In the two
countries similar. From there, we can see that cross -border transactions in Mexico
will be more convenient than Vietnam in terms of time.

9. Enforcing Contracts:

According to Doing Business 2020, Vietnam ranked 68/120 (with a score of 62.1) in
terms of contract enforcement. Meanwhile, Mexico ranked 43/190 (with a score of
67.0).

Indicator Vietnam Mexico

Time (days) 400 350

Cost (% of claim value) 29.0 33.5

Quality of judicial 7.5 9.5

processes index (0-18)

Through the above data, it can be seen that Vietnam ranks 25 places lower than
Mexico in the criterion of contract enforcement. While Vietnam takes 400 days to
complete each procedure, Mexico only takes 350 days. With a shorter completion
time, Mexico's judicial quality is higher than Vietnam's. However, with the speed in
completing procedures and high judicial quality, Mexico has to pay 4.5% higher costs
of claim value than Vietnam.

10. Resolving Insolvency:

According to Doing Business 2020, in the criterion of business termination, Vietnam

ranked 122/190 (with a score of 38.0) and Mexico ranked 33/190 (with a score of
70.3).

Indicator Vietnam Mexico

15
 Recovery rate (cents on 21.3 63.9
the dollar)

Time (years) 5.0 1.8

Cost (% of estate) 14.5 18.0

Outcome (0 as 0 1
piecemeal sale and 1 as
going concern)

Strength of insolvency 8.5 11.5

framework index (0-16)

Through the above data analysis, in the criterion of business termination, Mexico is
ranked 89 levels higher than Vietnam. The debt recovery rate in Vietnam is only 1/3
of the debt recovery rate in Mexico while the debt recovery time is 2.8 times longer.
Because of its high debt recovery rate and short debt collection time, Mexico's debt
collection costs are higher than Vietnam's. There is such a significant difference in
rankings because the insolvency index in Mexico is higher than in Vietnam. From
there, it can be seen that businesses in Mexico are unlikely to go bankrupt and can
more easily recover than businesses in Vietnam.

Conclude:

From the above indicators, we can see that Mexico is a country with a good business
environment for those who intend to enter the business market. This helps attract
businesses as well as investors to Mexico to do business, making this country's
economy increasingly strengthened. Meanwhile, Vietnam is a country with a
relatively good business environment, but there are still many aspects that need to
be changed to create a business environment that attracts more investors, thereby
promoting the country's economy.

Although Vietnam's ranking is lower than Mexico's, the country's economic

environment is experiencing positive changes. The overall score in Vietnam's Doing
16
Business rankings in 2020 increased by 1.2% compared to 2019 while Mexico's
score only increased by 0.1%. This is a good sign for Vietnam, a developing country,
in the race for economic development

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