Bogus companies

MOF sent a dispatch to the Ministry of Planning and Investment (MPI), offering suggestions to the draft decree on business registration that MPI is compiling.

A business was registered with the chartered capital of VND114 trillion

Citing the report to the Prime Minister on assessing financial analyses by private businesses in 2019 and the first three months of 2020, MOF pointed out that problems exist in privately run businesses’ operations after establishment.

Over 77,000 private businesses were reported stopping operation in 2019. Of these, nearly 50,000 businesses, or 64.61 percent, were not found at the addresses they registered.

Many of the enterprises committed violations: they did not declare tax, did not finalize tax or owed taxes. Many enterprises were established just to trade invoices and pocket money.

After taxation agencies released notices that enterprises were not found at the registered addresses, businesses did procedures to change information at business registration agencies, registered temporary stopping of operation. And some legal representatives of the businesses set up new enterprises.

“When the problems were discovered, the consequences occurred and they could not be solved,” MOF said.

After local newspapers reported about the activities of businesses seeking profits illegally, the Government Office assigned MPI to join forces with relevant agencies to consider the information and draw reasonable solutions to the problems, especially the behaviors of setting up businesses to carry out illegal operations.

MOF proposed that MPI set up a new regulation to deal with these businesses in the new decree: when receiving applications for business registration, business information changing/addition, or temporary stopping of operations, the business registration agencies will, considering the legal status of businesses of not operating at the given addresses, would have the right to ask businesses to report about this and handle in accordance with the Enterprise Law.

MOF noted that there is a high percentage of businesses not operating at the registered addresses and the figure is on the rise.

Therefore, it suggested setting up more binding sanctions and restricting the ‘rights’ of the businesses to which taxation agencies issue notices about the fact that taxpayers don’t operate at registered addresses and must have to fulfill tax duties.

This means that only when taxation bodies confirm that the businesses have paid taxes will they be able to register the changes of their business information.

MOF also proposed making it mandatory for businesses to provide information about representatives and phone numbers and emails, so that taxation agencies can send information and documents after the business registration finishes. 

Tran Huong

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