VietNamNet Bridge – The Ministry of Planning and Investment (MPI) is rallying support from relevant State bodies for its initiative to create a more liberal environment for foreign-invested enterprises, especially in business start-up procedures.

Illustrative image. – File photo

In its draft amendments to the Enterprise Law, the ministry wants most red tape involving licensing procedures to be scrapped; foreign-invested enterprises would only make business registrations as domestic enterprises do. This means foreign investors would not have to go through a time-consuming approval process to obtain an investment certificate, which would be deemed as a business registration certificate as well.

The ministry will submit the draft law to the Prime Minister for consideration after consulting relevant State agencies.

Under the prevailing Investment Law, foreign firms when making their first investment in Vietnam must submit an investment project associated with the establishment of an economic entity. The investment certificate issued to the foreign investor is also regarded as the business registration certificate.

According to the ministry, the combination of the investment and business registration certificates is meant to simplify procedures for foreign investors. However, this “marriage of those papers” in reality has caused a big headache for foreign investors because these two papers are vastly different in their very legal natures.

In addition, procedures related to foreign investors’ capital contribution to and acquisition of stakes in domestic enterprises are not interpreted the same in different localities, with certain localities even insisting on separate investment certificates to be issued for such practices.

With its draft Enterprise Law, the ministry wants to create a level-playing field for both foreign and domestic enterprises.

As such, foreign investors when wanting to implement an investment project in Vietnam will only have to register with authorities to establish a business entity in line with the Enterprise Law. Upon such registrations, State agencies will inspect whether conditions are sufficient in line with Vietnam’s legal requirements and international conventions that Vietnam has signed.

After establishing a business entity in Vietnam in accordance with the Enterprise Law, foreign enterprises can implement their projects with procedures similar to those applying to domestic entities.

It can be seen that with the draft law, most procedures are the same for both foreign and domestic enterprises, except for procedures conducted by competent State agencies to see whether conditions suffice for foreign investors when doing business in Vietnam. Under the draft law, the current investment certificate will be replaced by the investment registration certificate for foreign investors.

Source: SGT