VietNamNet Bridge – Approximately 140,000 companies are said to be missing, dead or inactive, but they still exist on the database of the watchdog agencies. This shows the big problems existing in the post-licensing works.

A report of the General Statistics Office (GSO) showed that by the end of 2012, nearly 93,000 enterprises had been “unidentified”, of which 60,454 enterprises had been found as missing or running away.

The existence of “bogus companies”

It’s very easy to join the market in Vietnam, which has helped encouraged the investments, but has caused a big headache to the management agencies.

According to Le Hong Giang, Head of the Business Registration Division of the Quang Ninh provincial Planning and Investment Department, most of the registered businesses did not fulfill their commitments in the chartered capital contribution.

A lot of businesses have not submitted reports about their business performance. Many have not been found at the registered head offices. Especially, numerous enterprises which cannot meet the requirements to be able to operate in conditional business fields still have been established.

Meanwhile, the business registration units are not powerful enough to take control over all the licensed businesses. Giang said only 10 percent of the businesses suspected of violating the laws have been inspected.

The statistics provided by the tax agencies prove to be the most reliable evidences to show the actual business performance of enterprises. However, with the limited power, tax agencies cannot give the answers to all the questions.

Also according to GSO, 541,000 businesses still had been operational legally by the end of 2012. However, only 375,000 were still maintaining production and business activities, 93,000 businesses had not been found, nearly 24,000 had suspended activities and 31,000 were following the procedures for dissolution.

Investment and Enterprise Laws to be amended

John Bentley, senior legal advisor to UNIDO, said the dead enterprises have caused the hindrance to the newly set up businesses. He has suggested that Vietnam should lay down a policy which requests enterprises to submit annual reports or update their information changes with the management agencies.

The enterprises which do not submit reports annually would be considered as the dissolved businesses, from which the management agencies have to right to revoke the business registration certificates and erase their names from the book of the nation’s businesses.

A lot of suggestions have been made to help identify the dead bodies and eliminate them in the market. However, in order to do that, it would be necessary to amend the Enterprises Law and Investment Law, once again.

The Enterprise Law has been praised as a law with a progressive look. It stipulates that investors can set up businesses and make investment in the fields not prohibited by the laws. It has paved the way for the simplifying of the administrative procedures, thus making it easier for investors to join the market.

Dr. Edmund Malesky, Head of the PCI 2012 survey team, has recognized the considerable improvement in the business registration works. It takes only 7 days to register business, while only 2 percent of businesses said they had to spend 3 months to follow the procedures.

The improved administrative procedures have made a great contribution to the improvement of the business environment in Vietnam.

DDDN