Draft amendment may open the field for enterprises
Draft amendment may open the field for enterprises
All enterprises in Vietnam will be entitled to do business in all sectors without limit under the law.
Minister of Planning and Investment (MPI) Bui Quang Vinh told the National Assembly that under the MPI-compiled draft amendments to the existing Law on Enterprises, currently under discussion by the legislature, “enterprises’ freedom in doing business will be maximised, in line with the Constitution under the idea that all people are entitled to freely engage in business in sectors and professions that are not banned by the law.”
Under the draft, investors can write any profession and sector name they choose on their certificate. However, if investors want to operate in conditional professions and sectors, such professions and sectors must be compulsorily prescribed on the certificate, and enterprises must meet all conditions of such professions and sectors before they can be granted the certificate.
“This regulation is suitable to standard practice in many countries. It will be a breakthrough in realising the public and enterprises’ right to business freedom,” Vinh stressed.
Local economist Huynh Buu Son said that it would be very good news for enterprises if the registration of business sectors and professions was removed.
“Enterprises should be allowed to do any business not banned by law. If this regulation is passed, enterprises will not face as many administrative procedures as they do now, and can save time and cash,” he said.
Under the existing Law on Enterprises promulgated in 2005, enterprises have to register business sectors and professions they want to operate within. However, if they engage in other sectors and professions not banned by law without adjusting the certificate, such business is considered to illegal. Meanwhile, the constitution states that all people are entitled to freely engage in business in sectors and professions that are not banned by law.
“Under the current regulation, many enterprises have missed many business opportunities because they have to have their business registration certificate adjusted for opportunities outside their listed field, and the process it takes to do so is often very time-consuming and complicated,” said the Central Institute for Economic Management’s head Nguyen Dinh Cung.
According to the MPI, the revised Law on Enterprise’s prime target is to maximise favourable conditions for enterprises, and therefore help Vietnam attract more foreign investors.
The World Bank calculated that in 2013, an investor would need an average of 34 days to complete an average of 10 administrative procedures for establishing a project in Vietnam. Vietnam was ranked 109th out of 189 nations and economies in terms of facilitating investors.
However Cung said that that the drafters were trying to reduce the number of procedures for enterprise establishment to only four, and the time for processing such procedures would also decrease to about 20 days.
“According to our calculation, this reduction is aimed at Vietnam’s business environment being ranked 50th by the World Bank in terms of business climate,” he said.
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