The 2005 Enterprise Law, praised as making a breakthrough in creating a better business environment for enterprises by removing the discriminatory treatment on enterprises of different ownership forms and economic sectors, has shown a lot of problems.
Laws and regulations overlapping
Lawyer Truong Thanh Duc from Maritime Bank, said that there exists the overlapping between the provisions of the Enterprise Law and the specialized laws in terms of granting business registration certificates and the licenses to establish enterprises.
The Enterprise Law has been defined as the law stipulating the establishment and operation organization for all types of enterprises. However, other specific laws also stipulate specific regulations on investment licensing applied to the enterprises in specific fields. As a result, there are too many legal documents guiding the procedures for setting up business, which has made businesses get puzzled.
Sharing the same view, Le Nga, a Lawyer from Ha Viet Law Firm, also said that the overlapping of legal documents and the lack of the documents guiding the implementation of the laws, has made it difficult for law firms to give advices to their clients.
A company’s branch, which has been operating in Hanoi for the last 10 years, wants to be upgraded into a company in the plan to expand operation in Vietnam. The new legal entity wants to “inherit” all the rights and duties of the branch.
According to Nga, in this case, it is really difficult to turn a branch into a company due to the lack of the guiding legal documents. Meanwhile, it would be unreasonable to ask the branch to get dissolved to set up a new legal entity.
Nga went on to say that the overlapping of legal documents and the lack of guidance from management agencies have neutralized the Enterprise Law in some specific fields.
Dead businesses cannot be buried
The representative from IMC Vietnam Joint Stock Company pointed out that the lack of the differentiation between the committed contributed capital and the actual contributed capital into limited companies with two and more members has caused misleading treatments.
The 2005 Enterprise Law stipulates that the contributed capital in limited companies with two and more members means the capital that the members commit to contribute. The members have to take responsibility for the committed contribution capital and they can enjoy the benefits in accordance with the committed contribution.
The problem here is that even when a member still has not contributed the capital sum he committed to contribute, he still can enjoy the profits from the committed capital.
He also pointed out that there has been no regulation that mentions the capital contribution in the first establishment period or in the operation period. As a result, in many cases, the Article No 30 of the Enterprise Law cannot be used. “Why do we have to set up regulations, if the regulations do not exist in reality?” he questioned.
According to Phan Vu Anh from the Vietnam Construction and Import-Export Corporation Vinaconex, in business practice in Vietnam, stamps are always considered the important things which can create confidence among involved parties in making transactions. Meanwhile, the regulations regarding the use of the stamps are really unclear in the law and the legal documents guiding the implementation of the law.
Nga from Ha Viet Law Firm said that with the current enterprise law, it is really difficult not only to “register a birth” for businesses, but also to “register a death”.
Under the current procedures, in order to obtain death certificates, enterprises have to complete the tax finalization with tax bodies, then pay back the stamps to the police agencies, and finally, file for bankruptcy to state management agencies.
In general, according to Nga, it takes enterprises 6-9 months to follow the procedures, a too long period for the businesses which no longer exist in reality. “This is like the dead bodies which cannot be buried,” she said.
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