Two-tier local government: Opening new opportunities for businesses

From July 1st, 2025, the two-tiered local government model will officially be implemented nationwide, including in Hung Yen province. This is considered a breakthrough in administrative reform, expected to bring a fresh impetus to the business community, helping to remove bottlenecks, improve the investment environment, and promote stronger production and business development.

Công ty cổ phần Nippon Sanso Việt Nam chi nhánh Hưng Yên (Khu công nghiệp Thăng Long II)

Nippon Sanso Vietnam Joint Stock Company, Hung Yen Branch (Thang Long II Industrial Park)

In Hung Yen province, where tens of thousands of businesses are currently operating, the transition from a three-tiered (province - district - commune) to a two-tiered (province - commune/ward) administrative model is considered a positive sign by businesses. Streamlining the organizational structure not only reduces the time required for administrative procedures but also saves costs, improves service efficiency, and creates a more transparent and open business environment.

Sản xuất tại Công ty TNHH Giày Ngọc Tề (Khu Công nghiệp Dệt- May Phố Nối)

Manufactured by Ngoc Te Shoe Co., Ltd. (Pho Noi Textile and Garment Industrial Zone)

Mr. Tran Quang Huy, Head of External Relations at Ngoc Te Footwear Co., Ltd. (Pho Noi Textile and Garment Industrial Park), said: We have four factories in the province with nearly 10,000 employees. Implementing a two-tiered government system will make it easier for businesses to handle administrative procedures. In particular, with the additional functions and responsibilities assigned to communes and wards, businesses will have easier access to local authorities and receive timely support in resolving production and business issues.

For many years, one of the major obstacles businesses have frequently encountered is the overlapping administrative processes between different levels of government. Eliminating intermediate levels will contribute to streamlining the system, reducing procedures, and saving time and costs for businesses, especially in areas such as land, resources, sub-licenses, and business registration. These are also areas where businesses often face difficulties due to having to go through multiple levels, prolonging processing times and incurring unofficial costs.

Furthermore, reducing intermediaries will contribute to increased transparency and enhanced trust in public authorities. This is also a factor in improving the component indicators in the Provincial Competitiveness Index (PCI) such as access to land, time costs, transparency, and business support services.

Công nhân làm việc tại Nhà máy Tân Đệ 9

Workers at Tan De 9 Factory

Tan De Sports Goods Manufacturing Joint Stock Company, which operates 9 factories in Hung Yen and Thai Binh provinces with nearly 17,000 employees, also has high expectations for the new model. Ms. Nguyen Thi Thu Huong, Manager of Tan De 9 Factory, shared: "We hope that when the two levels of local government implement this model, it will shorten the time for processing administrative procedures, reduce unofficial costs, and create a more attractive investment environment for domestic and foreign investors." Assigning officials from departments and agencies to work at the commune and ward levels will help increase connectivity and streamline work processes. We expect administrative reform, coupled with digital transformation, to take place vigorously, especially in areas such as investment licensing, taxation, and land management.

The two-tiered local government model is also expected to help state management agencies be more proactive in promoting investment and encouraging businesses to cooperate in local economic development. More flexible policy implementation and a more streamlined operational apparatus will create an efficient governance system that is closer to the people and businesses.

However, many businesses believe that the model transformation process requires a reasonable transition period for localities to adapt, especially in accessing and implementing new decrees and circulars in accordance with policies, laws, and practical realities.

For the new model to be truly effective, all levels of government need to implement a comprehensive set of solutions, including training and reassigning officials, strengthening the capacity of local governments, investing in digital infrastructure, and especially building a transparent inspection and supervision mechanism. Only then will the two-tiered local government model truly become a solid foundation for the business community and investors.

Hương Giang - Dương Miền


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