Thousands of foreign-invested enterprises are in jeopardy because of missing a crucial investment certification re-registration deadline.
Ho Chi Minh City People’s Committee has just sent a proposal to the prime minister asking for permission for investors, who gained investment licenses before July 1, 2006, to re-register for investment certificates to extend their projects.
The proposal was sent in the context that there are 784 foreign-invested enterprises (FIEs) in the city missed the re-registration deadline on July 1. 2011 and now face having to stop operating once their investment licenses expire. Some 27 FIEs must stop operating in 2012 and 174 others will share the problem in 2013 and 2014.
According to the municipal people’s committee, some typical cases in point are Taiwan-based Saigon Joubo Textile Co. Ltd, Sweden-based FKS Vietnam and Australian-backed RMIT University Vietnam.
Le Manh Ha, vice chairman of the committee, said this was a big issue because most FIEs wanted to continue doing business in Vietnam.
Tran Hao Hung, head of the Ministry of Planning and Investment’s Department of Legislation, told VIR thousands of FIEs nationwide were in similar trouble.
According to the Law on Enterprises issued in 2005, foreign investors, who do not have their investment licenses re-registered, will have to stop operation of their licensed projects once their investment licenses expire without extension.
Hung said that actually, foreign investors had four years for re-registration, from 2007 to 2011, but many ignored this regulation.
“I don’t know exactly why they did not re-register their investment licenses even though the government extended time for re-registration from 2009 to 2011. But now many foreign investors are seeing the consequences of missing re-registration deadline,” said Hung.
Leaders from Hanoi and Haiphong’s departments of planning and investment also told VIR they were worried about this issue. “We have received lots of feedback from FIEs about this. Many of them are worrying whether they can keep on doing business as the expiry of operations is coming,” said Le Thanh Son, director of Haiphong Department of Planning and Investment.
Ho Chi Minh City People’s Committee, in its proposal to the prime minister, suggested two options. FIEs could receive certificates of operation extension or they be granted new investment certificates with new corporate names and copy all operating content of the previous certificates.
“I think this regulation of re-registration should be revised to help FIEs. The better business climate we create for foreign investors, the more the economy benefits," said Nguyen Van Tu, deputy director of Hanois Department of Planning and Investment.