The new Law on Enterprises (2014) was passed by the National
Assembly in November 2014 and shall be effective as of 1st July
2015. New and existing foreign investors in Vietnam may be curious to have a
look at what’s new in the Law and how the regulatory changes shall affect their
business operations in Vietnam. A news article from VCCI has noted major legal
updates to come into effect in the next few months.
The new law is said to provide just a general frame
governing the operations of enterprises; meanwhile it seems to let enterprises
to decide many details of how to organize themselves and operate accordingly.
The new
Law seems to make room for information technology to take a much bigger role in
the business life; the National Business
Registration Portal (currently at http://dangkykinhdoanh.gov.vn),
for instance, is assigned to be place where enterprises must publicize their
business establishment announcement or their dissolution decision. Another
example is the legal recognition of electronic, audio minutes of meeting
instead of requiring minute book as the sole recognized form. According to the law, general meeting of
shareholders can be organized under the form of video conference (involving
many locations, and the place of the meeting chairperson shall be recorded as
the meeting’s location) and shareholders may cast their electronic or email
votes legitimately.
The format of business registration certificate is regulated
to incorporate only 4 items, namely (1) the name and code of an enterprise, (2)
its location, (3) information about the legal representative and (3) charter
capital instead of 10 items as regulated in the past law (scope of business,
list of founding shareholders, name of representative office, branch, business
location have been removed from the format).
Enterprises’ operations shall be no longer restricted within certain
scopes of business indicated in the business registration certificate as before,
so companies seem to able to do whatever businesses which are not prohibited under the National Constitution.
Under the new regulations, enterprises may
determine the format, the quantity and the indicated information of their seal
at their discretion (but the seal must at least indicate the name and code of
company) enterprises shall only be required to report their seal’s shape to the
business registration office for the purpose of publicizing the seal shape in
national business registration portal. This approach was of much debate during
the law drafting process and treated with contradictory opinions among the
lawmakers. But eventually the new law regulates a flexible approach to the
matters relating to company seal. According to the past regulations,
Vietnamese enterprise seals was in a standard shape regulated by Ministry of
Public Security (Police) and “being stamped” was widely recognized as the condition for
a document issued by the enterprises to be valid and effective, even it was
signed by the legal representative.
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| Enterprises may determine the format, the quantity and the indicated information of their seal at their discretion |
In coherence with the Investment Law 2014, the new
enterprise law also officially abolishes the past regulation defining that an Investment
Certificate served also as the Business Registration Certificate (2 in 1) for
the case of companies established by foreign investors. Thereby, under the new
legal regime, the foreign investors wishing to establish enterprises in Vietnam
must obtain an investment certificate for their project first in accordance
with Investment Law 2014 and after that shall register to establish their
enterprise under the provisions of the Law on Enterprises 2014.
Compiled by I4G
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