Pardon given to non-complying FIEs

Pardon given to non-complying FIEs

Those foreign-invested enterprises (FIEs) that failed to renew their expired investment certificates before July 1, 2011 may be saved from dissolution as the Government decides to remove such a requirement.

At the recent meeting, the Government members reached an agreement on proposing the National Assembly (NA) amend Article 170 of the 2005 Enterprise Law, in which the deadline for FIE re-registration should be annulled, says the Government web portal.

Article 170 of the Enterprise Law 2005 requires FIEs with investment licenses granted before July 1, 2006 to renew their certificates, with the deadline being July 1, 2011.

However, as of end-2012, only some 3,000 FIEs had done re-registration, or half of the enterprises subject to this procedure, according to the statistics of the Ministry of Planning and Investment

In HCMC, some 800 FIEs have not renewed their investment certificates, including 27 enterprises with total chartered capital of US$634.4 million whose certificates expired in 2012.

Currently, multiple FIEs are facing the risk of dissolution as their investment certificates had expired but they failed to timely renew them. This means a large amount of capital would be withdrawn from Vietnam and thousands of workers would lose their jobs, leading to complicated social problems.

Therefore, the Government deemed it very essential and urgent to revise Article 170 of the 2005 Enterprise Law.

The Government proposed the NA annul the deadline for FIE re-registration, allowing FIEs to choose whether to re-register or not at any time convenient for them.

As per this proposal, the FIEs that have renewed their certificates and those who have not will both operate under the Enterprise Law and the Investment Law. However, unregistered FIEs will have to stick to the principles for their operations, not violating the provisions of the existing laws, says the government web portal.

If passed by the NA at the meeting this month, the amended Enterprise Law will take effect on July 1.

Still, the planning ministry suggested the 3,000 FIEs that have not done re-registration should be reviewed to find if they had frequently reported losses, committed transfer pricing and evaded tax. If so, they should be eliminated to make the investment environment healthier and improve law compliance from the business community.

vietnamnet