Submit to the National Assembly to amend Article 170 of the Enterprise Law

On May 25, the National Assembly listened to the Government's Report by Minister of Planning and Investment Bui Quang Vinh, authorized by the Prime Minister, on the project to amend and supplement Article 170 of the Law on Enterprises.

Amend Article 170 of the Enterprise Law to encourage foreign-invested enterprises to expand their operations.

Clause 2, Article 170 stipulates that foreign-invested enterprises that are organized, managed, and operating under the Law on Foreign Investment in Vietnam have the right to choose to re-register to organize, manage, and operate under the provisions of the Law on Enterprises within 5 years from July 1, 2006, or not to re-register.

In case of no re-registration, the enterprise is only allowed to operate within the scope of business lines and duration stated in the Investment License.

As of July 1, 2011, the deadline for re-registration, about 3,000 out of 6,000 foreign-invested enterprises had re-registered.

The 3,000 enterprises that have not yet re-registered have a total registered capital of 18.5 billion USD and employ 446,000 people. Up to now, some of these enterprises have expired the operating period specified in their Investment License but want to re-register to continue operating; some enterprises still have the operating period stated in their Investment License but want to add and expand their business lines.

The amendment of Article 170 of the Enterprise Law aims to remove difficulties and create conditions for foreign-invested enterprises to continue to maintain their operations, especially those that have entered stable production and business, have a long-term workforce, and contribute to society and the State budget.

This amendment also aims to create a legal basis to encourage foreign-invested enterprises that have not yet re-registered to carry out new investment projects and expand investment in Vietnam.

Accordingly, the Government proposes to amend Clause 2, Article 170 of the Enterprise Law in the following direction: Abolish the re-registration deadline for foreign-invested enterprises to allow enterprises to choose not to re-register or to re-register at an appropriate time for the enterprise.

This amendment aims to ensure the autonomy of enterprises in deciding on methods of organization, management and business operations.

Examining the draft Law amending and supplementing Article 170 of the Law on Enterprises, the majority of members of the Economic Committee agreed with the amendments proposed by the Government. However, the examining agency also suggested that it is necessary to specifically review and only allow enterprises to re-register or expand their business lines if the investment activities do not violate the law (on environmental protection, tax obligations, etc.), and are consistent with the planning and foreign investment attraction policies of the Vietnamese State.

According to (Chinhphu.vn) - LT