On November 26, 2014, the same promulgation day of Investment Law 2014, the National Assembly of Vietnam promulgated a new enterprise law with many positive new regulations and meaningful reforms (Enterprise Law 2014), which will take effect from July 1, 2015 and replace the current Enterprise Law 2005. Through this new law, the policy-makers are expecting to boost the freedom of businesses and alleviate many of the remaining stumbling blocks in the economy. Below are some highlights and comments on various key changes under Enterprise Law 2014.
A declaration of the freedom to conduct business
To work hand-in-hand with Enterprise Law 2014 for attracting investment in Vietnam, the list of prohibited business lines and conditional business lines is also significantly decreased under Investment Law 2014 (to be effective from July 1, 2015), which will include only six prohibited business lines and 267 conditional business lines, instead of 51 and 386 respectively under the current regulations.
Separation of enterprise registration and investment project registration
Under Investment Law 2014, an investment registration certificate is only required for a project invested in by a foreign investor or Vietnam-based company involved with 51 percent foreign capital, and may be obtained within 15 days (or just five working days for mega-projects which have obtained an investment policy decision as required by the law).
Reduction of majority vote in a joint stock company (JSC)
Also under Enterprise Law 2014, a company can assign more than one person to be the representative-at-law of the company. The company charter shall regulate the specific number, management title, rights, duties and obligations of the business legal representative.
With a lot of significant changes and reforms, it is expected that Enterprise Law 2014, along with Investment Law 2014, will bring radical improvements to the Vietnam business environment and mobilise more capital and resources for production and business activities in the coming years.
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