Binh Dinh Invest

FIE re-registration lags behind expectations

26 November 2007

As the July 2008 deadline approaches, only 78 of the 6,000 plus foreign-invested enterprises (FIEs) have made re-registration to reap benefits from new business laws, as reported at a meeting in HCMC last Thursday.

Organized by HSBC and Mekong Securities, the meeting aimed to provide FIEs with information about the re-registration process to help them benefit from Vietnam's legislation.

Under the new law, foreign investors can establish projects nationwide without having to undertake the formalities of registering those with the foreign investment authorities.

Re-registration also allows FIEs to expand their business lines and become shareholding companies who can mobilize capital from Vietnam's stock market.

FIEs that do not re-register will continue to operate within the scope of their issued investment licenses.

Tran Thi Thu, head of the Policy Department of the Foreign Investment Agency under the Ministry of Planning and Investment, said that only a small portion of the businesses granted licenses before July of last year had re-registered with provincial agencies.

Although it may be the enterprises' decisions, the potential benefits of the new laws will not apply to them if they do not re-register on time, she added.

Thu also said that the Foreign Investment Agency had proposed to extend the deadline, but the Government rejected the plan.

Dao Nguyen, managing partner of the law firm Johnson Stokes & Master in Vietnam, said that some foreign enterprises think that by re-registering, they may lose the incentives they currently have.

Thu believes that additional reasons for enterprises not re-registering include those with no intention of expanding and those that have not followed the issue closely.

Scott Brewer, business development manager of Odyssey Resources Limited, said that he was unaware of the issue because he has only been in Vietnam for five months.

He plans on discussing the re-registration issue with his CEO because the company may expand operations in Vietnam and mobilize investment capital in the future.

Source: VietnamNet