Law amended, FIEs escape suspended sentence
Law amended, FIEs escape suspended sentence
Thousands of foreign invested enterprises (FIEs) have escaped from their suspended sentence because they did not make the re-registration as required by the Enterprise Law, since the amended law which makes some changes to the Article No 170 was ratified by the National Assembly on June 20.
As such, the thousands of enterprises now can sigh with relief because they have suddenly become “innocent” overnight, just because of the amendment of the law. The sentence of violating the Article No. 170 of the Enterprise Law had been hung over them over the last few years. The article stipulates that if FIEs do not make the re-registration, they would have to stop operation and get dissolved.
The enterprises did not make the re-registration as requested by the law, while they would have to follow very complicated procedures to make the re-registration.
414 out of the 461 National Assembly’s Deputies agreed to the proposed amendment of the Enterprise Law. Meanwhile, they once argued violently about whether to amend the article and whether to punish the FIEs which have not made the re-registration as stipulated by the laws.
A report released in early June 2013 showed that nearly 3,000 FIEs missed the deadline for renewing their investment certificates and they may face the shutdown.
The Ministry of Planning and Investment, which insisted on the amendment of the law, warned that if the National Assembly does not agree to the amendment, this would badly affect the Vietnamese investment environment.
If such a high number of FIEs was closed, a considerable sum of capital might be withdrawn from Vietnam and thousands of workers would lose their jobs, giving numerous social problems.
However, some national Assembly’s Deputies warned that the amendment, considered as a “compromise” would even lead to better consequences, because this means that the Vietnamese laws are not abided by FIEs.
They said this would create a bad precedent in the sense of respect and observance of the laws. This would put the FIEs which have made the re-registration and respected the laws in the same category with the enterprises which have deliberately deferred the re-registration.
The problem was that the government agencies, which realized the unreasonable provisions and the low percentage of re-registered FIEs, did not make prompt action to settle the problem.
According to the Ministry of Planning and Investment, the 3,000 FIEs which have not made the re-registration as requested, have the total registered investment capital of $18.5 billion and employ 446,000 workers.
Of these, many enterprises have their operation duration finished as stipulated in their investment licenses, but they want to make the re-registration to continue operation. Some others want to register some new business fields in Vietnam.
Especially, the ministry’s report showed that a lot of FIEs began their investments right in the first years of the doi moi (renovation), initiated by the Communist Party in1980s. They made great contribution to the socio-economic development by creating jobs and paying money to the state budget. They have also expressed their willingness of doing business for a long time in Vietnam.
The decision of the government to propose the National Assembly to amend the Article No. 170 of the Enterprise Law has been hailed as a necessary move, because Vietnam, in order to attract more foreign direct investment, needs to be constructive in setting up the legal framework.
vietnamnet
