Business Registration: No Discrimination

Business registration (now enterprise registration) is regulated in detail in the 2005 Law on Enterprises.That is absolutely correct and in line with international practice. However, for foreign investors, business registration still has many shortcomings.

Article 50 of the Investment Law stipulates: “Foreign investors investing in Vietnam for the first time must have an investment project and carry out investment registration or investment appraisal procedures at the state investment management agency to be granted an Investment Certificate. The Investment Certificate is also the Business Registration Certificate”. Article 56 of Decree No. 108/2006/ND-CP dated September 22, 2006 guiding the implementation of a number of articles of the Investment Law stipulates: “In case an investor contributes capital for investment, it must carry out investment procedures in accordance with the provisions of the law on investment”.

Under the provisions of the Investment Law, the registration of foreign investors to establish enterprises is governed by other regulations and is quite complicated by inconsistent sub-law documents and directives.

Article 9 of Decree 139/2007/ND-CP of the Government detailing the implementation of a number of articles of the Law on Enterprises stipulates: “Foreign organizations and individuals investing for the first time to establish an enterprise in Vietnam shall do as follows: In case the enterprise intended to be established has foreign investors owning no more than 49% of the charter capital, the establishment of the enterprise shall comply with the provisions of the Law on Enterprises. Investment registration in this case shall apply according to the corresponding provisions for domestic investment projects”. Decree No. 139/2007/ND-CP has been replaced by Decree No. 102/2010/ND-CP, in which this provision remains unchanged.

However, on March 18, 2009, the Ministry of Planning and Investment issued Official Dispatch No. 1752/BKH-PC guiding the procedures for establishing a joint venture in cases where the foreign party holds less than 49% of the charter capital, stipulating: When a foreign investor contributes capital with a Vietnamese investor to establish a joint venture, in which the foreign party holds no more than 49% of the charter capital, the investor must have an investment project and must complete procedures to be granted an Investment Certificate, as prescribed by the Investment Law.

Therefore, up to now, any enterprise with the participation of foreign investors, even if it only accounts for 1% of the charter capital, must have an investment project and "apply" for an Investment Certificate. More seriously, before March 18, 2009 (the date of Official Dispatch No. 1752/BKH-PC), many enterprises with foreign investors contributing capital and purchasing shares with a ratio of less than 49% of the charter capital were granted Business Registration Certificates. Up to now, enterprises with the need to change the content of business registration have not been resolved, the business registration authority requires an investment project and requests an Investment Certificate, making many enterprise owners "like chickens caught in hair"! Because, the enterprise has been established and operating since 2008, until now only moved location or increased charter capital... must "have an investment project", then who knows what to write, what to draw for the project? That is no different from... a puzzle!

Project 30 of the Government has proposed to withdraw Official Letter 1752/BKH-PC because it blatantly amended the Government's decree and caused difficulties for foreign investors, while also creating conditions for civil servants at the business registration agency to arbitrarily resolve the matter or not... it is true, negativity arises from here. However, for unknown reasons, the Ministry of Planning and Investment remains silent?

According to baocongthuong