Amendments of provisions on enterprise registration - Mazars Legal Alert

In July and August 2018, the Government has promulgated two new legal documents to replace, amend and supplement a number of provisions relating to enterprise registration, including Decision No. 27/2018/QD-TTg dated 6th July 2018 of the Prime Minister issuing the Vietnam Standard Industrial Classification (to replace Decision No. 10/2007/QD-TTg dated 23rd January 2007 of the Prime Minister) and Decree No. 108/2018/ND-CP date 23rd August 2018 amending and supplementing a number of articles of Decree No. 78/2015/ND-CP dated 14th September 2015 of the Government on enterprise registration.

We would like to summarize below some note-worthy points of such new documents:

NEW VIETNAM STANDARD INDUSTRIAL CLASSIFICATION

-          In comparison with Decision 10, Vietnam Standard Industrial Classification under Decision 27 still has 5 levels; however, some business lines at Level 4 and Level 5 have been supplemented, specifically:

  • Level 1 comprises of 21 business lines coded by the letters of the alphabet in alphabetical order from A to U;
  • Level 2 comprises of 88 business lines; each business line is coded by two numbers in accordance with its corresponding business line at Level 1;
  • Level 3 comprises of 242 business lines; each business line is coded by three numbers in accordance with its corresponding business line at Level 2;
  • Level 4 comprises of 486 business lines; each business line is coded by four numbers in accordance with its corresponding business line at Level 3 (49 new business lines in comparison with 437 business lines as stipulated in Decision No. 10). Some new business lines at such Level: 0231 (Exploiting forest product other than wood), 0232 (Collecting forest product other than wood), etc.;
  • Level 5 comprises of 734 business lines; each business line is coded by five numbers in accordance with its corresponding business line at Level 4 (92 new business lines in comparison with 642 business lines as stipulated in Decision No. 10). Some new business lines at such Level: 01191 (Growing annual spice plants), 01192 (Growing annual medicinal plants and condiment plants), etc.

 

-          Decision 27 came into full force and effect from 20th August 2018. The Ministry of Planning and Investment has also promulgated Official Letter No. 234/DKKD-NV dated 20th August 2018 guiding the implementation of Decision 27. According to which, an enterprise or its affiliates which were issued with Enterprise Registration Certificate, Affiliate Registration Certificate before 20th August 2018 do not have to update their business lines in accordance with the new Standard Industrial Classification. The enterprise shall update such information upon its discretion or when having changes of business lines or when applying for the conversion into Enterprise Registration Certificate. In case where the application dossiers for establishment, changes of business lines, or request for conversion into Enterprise Registration Certificate of an enterprises or its affiliates were submitted and received before 20th August 2018 and names or codes of the business lines declared therein are different from the ones stated under the new Standard Industrial Classification, such application dossiers shall have to be amended and/or supplemented in accordance with the guidelines stated in this Official Letter.

 

-          The notification of updating business lines is made in the form stipulated in Annex II-5 of Circular No. 20/2015/TT-BKHDT dated 1st December 2015 of the Ministry of Planning and Investment providing guidelines on enterprise registration.

 

NEW REGULATIONS ON PROCEDURES FOR AND DOSSIER OF ENTERPRISE REGISTRATION

In comparison with Decree 78, Decree 108 has some new notable provisions as follows:

  • The provision: “An enterprise may only establish its business locations within the provinces in which its headquarters or branches are located” is annulled. Accordingly, enterprises can now establish business locations in other provinces without the need to set up branch as previously stipulated.

 

  • Enterprises are not obliged to affix the company seal on the request for enterprise registration, notification of change of enterprise registration information, resolution, decision, meeting minutes which are included in the enterprise registration dossiers.

 

  • The letter of authorization for an individual to implement procedures related to enterprise registration is not required to be notarized.

 

  • Charter or an equivalent document of the company’s owner if the company’s owner is an organization” is no longer included in the registration dossier for establishment of a one member limited liability company.

 

  • In case of registering the decrease in charter capital, enterprises do not have to submit its latest financial statement.

 

  • Enterprises may register to convert the enterprise form simultaneously with changes of other enterprise registration information, except for change of legal representative.  

 

  • Supplementing new provisions on procedures for registering enterprise on the basis of conversion from household business.

 

  • Request for announcement of enterprise registration is carried out at the time of submitting the enterprise registration dossier (not after as per the previous procedure).

Decree 108 shall come into full force and effect on 10th October 2018.

Our support

We do trust the above points are notable and sufficient, but should you have any question or need a deeper discussion on this issue, please do not hesitate to contact us.

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