The Government of Vietnam attempted to simplify procedures for registering the establishment of companies by a new Decree No. 43/2010/NĐ-CP dated 15 April 2010 (“Decree 43”) to replace the Decree No. 88/2006/NĐ-CP date 29 August 2006 on business registration (“Decree 88”). Decree 43 also covers the provisions and procedures on company conversion, merger, dissolution, change business registration contents. Although businesses expected many to fill the loopholes in legal guidelines, compared with the Decree 88, the Decree 43 does not make any significant change.

Naming a company

Decree 88 prohibited a company which has an identical name with another within a province or city. Now, it is more difficult to give a name when the Decree 43 requires the distinguishment for the whole country. An already established company which happened to have the name identical to another shall not be forced to change their name though the new Decree encourages the involved companies to negotiate. Another new point is that the Decree 43 allows enterprise’s name to include such letters as F, J, Z, W, although it was not possible previously. Those letters are not existent in Vietnamese alphabets.

Businesses may be happy to learn that the Decree 43 explicitly prohibits naming a company using a protected trade name, trademark and geographic instruction without consent of the owner. This provision is expected to provide a clean intellectual property environment. However, it raises another concern as to how the business registrars shall be connected to the database of the national industrial property office for checking, or it will cause another burdensome procedure to applicants for company establishment.

Enterprise Code

Formerly, a company in Vietnam has a company establishment number stated in its establishment certificate issued by business registrar. It also has another tax code number stated in tax code registration which should be issued by tax authority. Businesses did not see a rationale why there should be two different numbers and two different procedures while registering a company. Now, a company shall be granted with a single enterprise code two serve both purposes by a single procedure. This new provision is meaningful in term of reducing the administrative burden for enterprises. Established companies shall not be forced to change to a single code system. However, when one applies for a change to its registered business contents, a single enterprises code shall be automatically given to it.

Online registration

The most notable change under the Decree 43 is a mechanism for enterprise registration through the Internet. In spite of application dossier on paper and long-time queuing up at the one-gate registrar, now applicants can save time by online registration procedure through the National Enterprises Registration Information Gate which takes the same effect as procedure on paper. For sure this will be welcome but businesses are eager to see how the business registrars shall deal with the low IT infrastructure here and with the inaccuracy of information to be submitted online.

Shorten timeframes

The duration for issuing a new business registration certificate for enterprises is shortened from 10 to 05 working days from the date of business registrar’s receipt of the qualified application files from applicants. This stamps the strong ambition to reform administrative procedures, but again it is interesting to see how the authority shall deal with bunches of increasing number of applications while the number of qualified officers at state authorities being moved out to work for private sectors.