Ministry of Planning and Investment Portal

Date 24/09/2016-10:33:00 AM

Review Conference of one-year implementing the Enterprise Law and Investment Law

(MPI) – A review conference on one-year enforcement of the Enterprise Law and the Investment Law of 2014 was held by the Ministry of Planning and Investment in Hanoi on September 20th 2016. The meeting was attended by Deputy Minister Dang Huy Dong, heads of relevant units under the MPI, representatives from other ministries, agencies, sectors, localities, international partners, consulting firms and the business community.

Mr. Bui Anh Tuan, Deputy Director General of the Business Registration Management Agency.
Photo: Duc Trung (MPI)

The Laws have been implemented in different aspects, said the Deputy Director General of the Business Registration Management Agency under the MPI.These include standardizing and promulgating guiding documents such as the Resolution No. 59/NQ-CP dated August 7, 2015 by the Government on the implementation of the Enterprise Law and the Investment Law and the Official letter No. 4211/BKH-DKKD dated August 26, 2015 guiding the application of regulations on business registration; upgrading the system, providing level-four online public services to the community and businesses through the National Business Registration Portal;inputting data of 17,000 FDI companies into the national business registration database;and training for nearly 600 business registration officers, setting up channels to provide instructions to companies, propagating and disseminating information on the Enterprise Law through different communication and media platforms.

The Enterprise Law and the Investment Law reaffirm the freedom in doing legal business as stated in the Constitution of 2013. By liberating the freedom in doing business, the Enterprise Law has stirred up the start-up spirit and encouraged new players to enter the market.After one year of implementation of the Law, the country has recorded as many as 106,000 newcomers joining the market, representing a year on year increase of 27.8% with a registered capital of VND768 trillion, up 42.4%. The number of companies raising their charter capital reaches 23,950, up 22.5%.Among them are 1,973 new FDI companies established with a total registered capital of VND 68,309 billion and an average capital amount of VND34.6 billion per company.

The simplification of dossiers, processes and procedures has brought about many positive results.The on-time response and first-time approval ratios of dossiers have been on a sharp increase, contributing to a reduction in market entry costs.Specifically, as much as 85.73% of dossiers and files are approved for the first time and 89% of them are responded on a timely basis. Methods used to facilitate business registration have also been diversified by increasing the proportion of online business registration.Accordingly, Hanoi has reported that 40% of new enterprises have been registered online and expects this number to reach 100% by the end of this year.Furthermore, the at-home business registration platform in Ho Chi Minh City, the “happy-time” business registration service in Ha Tinh and the on-site business registration support model in Hanoi have contributed to the diversification of business registration support approaches in these localities and helped reduce the dossier processing time.The average period of time taken to process a new business registration dossier and a registration revision dossier is 2.9 days and 2.05 days, respectively.

The improved coordination among state agencies has produced practical results.The Circular No. 127/2015/TT-BTC dated August 21, 2015 by the Ministry of Finance guiding the issuance of business ID numbers to new enterprises and assignment of tax authorities to manage newly-established companies and the Joint Circular No. 01/2016/TTLT-BKH-BTC dated February 23, 2016 by the Ministry of Planning and Investment and the Ministry of Finance guiding the exchange of business information between the National Business Registration Portal and the Tax Information System have affirmed the all-in automation process in business and tax registration, reducing the time required to issue a new business ID number from 30 hours to 30 minutes.

After one year of enforcement, the Enterprise Law has helped change the thinking in the management of seals and modification of seal making and registration procedures by requesting the publication of specimen seals and empowering companies to determine the number, form and contents of and how to manage and use their seals.The legislation has also contributed to a change in the thinking instate management by moving from pre-inspection to post-inspection, promoting the coordination in information sharing among state management agencies, improving the openness and transparency of information on the establishment and operation of companies, changing from the management-based thinking to the service-focused attitude and strengthening community-driven supervision over the operation of enterprises.

Deputy Minister Dang Huy Dong chairing the Conference,Director General of Business Registration Management AgencyTran Thi Hong Minh in the left andDeputy Director General of CIEM
Phan Duc Hieu in the right. Photo: Duc Trung (MPI)

It is fundamental to focus on clarifying some ambiguous and improper provisions and inconsistencies among relevant laws, said Phan Duc Hieu, Deputy Director of the Central Institute for Economic Management (CIEM) when presenting intended revisions to the Enterprise Law.Regarding business registration, it is required to unify business registration procedures under the Enterprise Law, irrespective of business lines or types of investors.Provisions on legal representatives should clearly specify that an enterprise shall be responsible to third parties where it has more than one legal representative and abuses its power when establishing transactions.Other proposals include the requirement that supervisors of state-owned enterprises and joint stock companies in which the State owns more than 50% of the capital shall be qualified accountants or auditors, more clearly defined rights of shareholders in accessing shareholder information and amendments of the provisions on proxies at shareholders’ general meetings.

Shortly after the effective date of the Investment Law, the Ministry has issued documents guiding its implementation to ensure that investment activities are carried out in accordance with the new law and five decrees (Decrees No. 118, 83, 84, 50) and two circulars prescribing related forms (Circulars No. 09 and 16), said Mr. Quach Ngoc Tuan, Deputy Director of the Department of Legislation when expressing his viewpoints over the one-year enforcement of the law.

Vietnam reported about 2,000 newly registered projects from July 2015 to July 2016 as compared with approximately 1,500 newly registered projects recorded in the same period last year. The newly registered capital neared US$ 20 billion as compared with nearly US$15 billion registered in the same period last year. The amount of increasedcapital totaled US$ 10 billion as compared with US$5 billion posted in the same period last year.

However, besides these achievements, Vietnam still faces a number of difficulties and challenges that prevent the consistency and uniformity of the legal system for investment and business.Many business lines are no longer required to be conditional investment and business areas or are overlapping while the provisions applicable to some others need to be modified or supplemented. The concepts of investment and business have not been clearly defined to distinguish them from other regulations, such as technical regulations and standards and conditions for social order and safety.The relations between investors, companies and projects are unclear when foreign investors establish their businesses.Investors also said that making decisions on investment and granting certificates of investment registration are two independent sets of procedures, while the Law provides that making decisions on investment is a step in the procedures for issuing certificates of investment registration.Certain provisions on land, construction, environment, real estate business, housing, technology, labor and trade are overlapping in terms of management contents as compared with the Investment Law, which hinders the enforcement of the law.This is also the basis for preparing a draft Law amending and supplementing laws on investment and business in order to solve existing problems and shortcomings./.

Ministry of Planning and Investment

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