Ministry throws lifeline to unregistered FDI firms

Under the Enterprise Law and Investment Law, foreign-invested companies established under the Foreign Investment Law that did not register by July 1 of last year were supposed to have ceased operations and not be allowed to extend their expired licences.

The ministry has submitted two solutions to the Government. First, the Government would propose the National Assembly pass a resolution to remove the clause in the Enterprise Law issued in 2005 that requires foreign-invested enterprises to renew their licenses.

However, despite the Enterprise Law taking effect on July 1, 2006, the National Assembly has adjusted the article twice to extend the time for re-registration to five years, as requested by foreign-invested enterprises.

Secondly, the ministry asked the Standing Committee of the National Assembly to allow these businesses continue to renew their registration before amending the Enterprise Law.

Director of the ministry’s Foreign Investment Agency Do Nhat Hoang said the proposal could be considered as one of the measures to support foreign-invested firms in a difficult economic situation.

Hoang said a survey by the ministry showed that several foreign-invested companies were finding it difficult to ensure output and wanted to shift into new business lines. However, they failed to renew their business licenses due to overly complicated regulations, that could result in the closure of their plants.

He said the ministry has supported the first solution, meaning that regulations asking foreign-invested firms to re-register to continue operations in Vietnam after the deadline would be removed.

Twenty-seven out of 672 foreign-invested enterprises with total registered capital of US$634.4 million in HCM City face closing down by the end of this year as they have only one month left for re-registration.

In addition, more than 700 foreign-invested firms in the city have not re-registered according to the regulation. However, the businesses had a longer business license.

The director added that business licenses for several businesses had expired as they were granted licenses since 1990s.

He said the ministry has received re-registration applications from only 3,000 out of 6,000 foreign-invested businesses.

He said foreign-invested firms did not want to re-register because they lacked staff that could work through the complicated regulations.