Enterprise registration in Vietnam – New rules issued for more international integration and national systemization

28 - 06 - 2010
By Bui Ngoc Hong and Truong Hoai Nam*

On 15 April 2010, the Vietnamese Government issued Decree No. 43/2010/ND-CP on enterprise registration (Decree 43) replacing Decree No. 88/2006/ND-CP dated 29 August 2006. Decree 43 provides a more investor-friendly enterprise registration procedure, supplements the rules for naming companies, and lays the foundations for a business registration database that will be accessible and consistent nationwide.

Decree 43 halves the turnaround time from receipt of application to issuance of a business registration certificate to five business days.  This time gain comes from the elimination of separate procedures to obtain a tax code number as the business registration number will serve simultaneously as the tax code number.

Decree 43 allows the use of the letters F, J, Z, and W for company names, four letters not found in the Vietnamese alphabet. The use of these letters for company names was not permitted under Decree 88. Decree 43 provides that company name must be writable using Vietnamese alphabetical letters and those four non-Vietnamese alphabetical letters. Thus, foreign investors will no longer have to change a preferred name for their corporate baby only to fit into the tight shirt of the Vietnamese alphabet.

The new decree offers glimpses of a more efficient and accessible business registration process through technology. It contains provisions for a national enterprise registration information system, comprising of the national enterprise registration information portal and the national database on enterprise registration. Via a national enterprise registration information portal, investors will be able to conduct business registration online. From the national database on enterprise registration, for a fee, enterprise registration information will also be obtainable (a helpful feature for due diligence).

With the birth of the national enterprise registration information system, however, investors will also soon be required to search nationwide to avoid repetitive enterprise names, rather than the previous province-level search requirement. As of 1 January 2011, any proposed name identical to, or similar enough to cause confusion with, an already registered enterprise name anywhere in Vietnam will be rejected.  To avoid disputes on enterprise names, from now, investors had better have their proposed name checked carefully before applying for registration.

Decree 43 becomes effective on 1 June 2010.  It remains to be seen how Decree 43 will be implemented.  However, one can say by this new legislation Vietnam is trying to adapt to more investor-friendly standards in business registration, to make the country more attractive and convenient to investors.  Less paper but more transparency and accessibility to business registration can be expected.

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