VietNamNet Bridge – Nearly 3,000 foreign-invested enterprises (FIEs) missing the deadline for renewing their investment certificates may escape shutdown as a proposal to annul the re-registration requirement for FIEs has gathered support.

Most deputies of the National Assembly (NA) at a group discussion this Tuesday agreed with the Government proposal for amendments to Article 170 of the Enterprise Law, according to the Government web portal.

Article 170 requires all those FIEs established before July 1, 2006 to renew their investment certificates no later than July 1, 2011. If failing to do so, their operations will be confined to what is stated in their old certificates.

A majority of NA deputies deemed it urgent to revise this rule in order to remove this bottleneck and make life easy for investors, especially foreign investors.

If this regulation were not changed, 41 FIEs would have to end their operations late this month. An additional 142 FIEs would be forced to be disbanded in 2014 and 269 others in 2015.

The number will rise further thereafter since 2,916 FIEs among the total of 6,000 established prior to July 1, 2006 have not made re-registrations as required.

The fact that multiple FIEs have failed to timely renew their investment certificates has caused a negative impact on the investment environment. With a lot of FIEs to be closed, a considerable sum of capital might be withdrawn from Vietnam and thousands of workers would lose their jobs, giving rise to social problems.

In HCMC, about 800 FIEs have not reregistered their businesses as requested. Twenty seven of them, with combined capital of US$634.4 million, reached their expiration dates in 2012 and are now seeking approval to extend their operational durations.

NA deputies suggested FIEs should not be compelled to renew their certificates. Without such a requirement, FIEs can do business as usual and Vietnam’s investment environment may remain attractive and competitive.

Though deeming it necessary to revise Article 170 to save FIEs, some deputies said there should be provisions to eliminate poorly-performing FIEs and facilitate those fulfilling their obligations.

A deputy said if there were other provisions in the Enterprise Law that needed amending, they should be amended right away. Otherwise, State management agencies, enterprises, organizations and individuals will have trouble complying with the law.

Source: SGT