Lawyers fear administrative reform may cause difficulties for businesses

VietNamNet Bridge - The Ministry of Planning and Investment (MPI) plans to simplify the procedures on business registration but lawyers say this may do more harm than good.

Vietnam, administration reform, MPI

The MPI’s draft decree on business registration procedures, which is now open for public opinion, says businesses will only have to declare their business fields, and will not have to encode the names of the fields.

Encoding takes time because businesses have to check the list of codes to identify what suits their registered business fields.

The compilers of the 2014 Enterprise Law, which is expected to take effect on July 1, 2015, were asked to remove the encoding requirement. 

Experts said the encoding must be done by state officials who have deep understanding about laws and regulations.

Therefore, MPI believes that it would be better not to request businesses to encode their business fields in order to simplify the administration procedures. 

It will be the business registration agencies which should rewrite the names of businesses fields in codes. 

However, a lawyer noted that it would not take investors much time to write their business fields’ code in registration form. Under the current regulations, business codes are just a combination of four or five numerals.

The problem, according to a lawyer, is that businesses don’t know what codes their business fields should be matched with. In many cases, investors register unfamiliar business fields which cannot be found in the list of codes. 

Therefore, what MPI should do is to maintain the current regulation on declaring business fields under the name codes and stipulate that businesses can consult with state agencies’ officials in specific cases.

A state official, when asked what he would prefer – requesting businesses to declare their business fields’ codes or not – said the second option would “do more harm than good”.

He said there are two possible scenarios. First, state officials may assign the wrong codes to the business fields registered by investors. If so, businesses would be asked to provide more documents and give more information. Second, investors could declare one thing but state officials understand another. As a result, the officials could assign the wrong codes to business fields.

A lawyer noted that in both cases, businesses will have to spend much time to complete business registration. If so, the MPI’s “good-will” would not help ease administrative procedures.

He said that he cannot understand why experts and policymakers need to argue about this simple issue. 

“In principle, the encoding must be assigned to… computers,” he said. “Data needs to be entered into computers which will help automatically assign codes to business fields to be named by businesses.” 


Vietnam, administration reform, MPI