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The Ministry of Planning and Investment in Vietnam has recently drafted a new Decree on business registration, set to replace Decree No. 01/2021/ND-CP.
This proposed legislation introduces several significant changes aimed at streamlining business registration processes and improving transparency in the business environment.
Key changes in the Draft Decree include:
Abolition of Business Household Registration
The draft proposes to eliminate regulations on business household registration currently found in Decree No. 01/2021/ND-CP. It also aims to standardize the entire system of forms used in business registration, which are currently regulated by Circular No. 01/2021/TT-BKHDT. This change is intended to align with regulations on the authority to promulgate administrative procedures and to refine the legal framework for business registration.
Use of Personal Identification Numbers
In line with Resolution No. 136/NQ-CP, which aims to simplify administrative procedures, the draft introduces the use of personal identification numbers in business registration procedures. This change is expected to reduce the amount of personal information required, as it will allow for data retrieval from the national population database. This measure is also intended to minimize document falsification in business registration by relying on verified information from the Ministry of Public Security.
Legal Status of Business Entities
The draft introduces new regulations on the legal status of branches, representative offices, and business locations. It outlines six possible statuses:
- temporary suspension of business;
- not operating at the registered address;
- revoked due to tax enforcement;
- undergoing termination procedures;
- ceased operations, or;
- active.
This change aims to improve transparency and ensure consistency in statistical data between business registration and tax agencies.
Removal of Business Registration for Credit Institutions
Following the passage of the Law on Credit Institutions 2024, the draft removes regulations on business registration for credit institutions. Under the new law, the State Bank will have the authority to grant, amend, and revoke licenses for credit institutions, which will serve as their business registration certificates.
Implications and Objectives
These proposed changes reflect Vietnam’s efforts to modernize its business registration system and reduce administrative burdens. By leveraging digital identification and streamlining processes, the government aims to create a more efficient and transparent business environment.
The draft also demonstrates an attempt to harmonize regulations across different sectors, as seen in the alignment with the new Law on Credit Institutions.
The Ministry of Planning and Investment is currently seeking public comments on the draft Decree. Businesses, especially those in the process of registration or considering expansion, should closely monitor these developments as they may significantly impact registration procedures and requirements.
As Vietnam continues to refine its business regulations, these changes are likely to contribute to the country’s ongoing efforts to improve its business environment and attract both domestic and foreign investment.
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