One of salient features of the Law on Investment 2014 is the innovation applied to procedures of establishment of enterprises owned by foreign investors in the direction of separating the Certificate of investment project (IRC) and enterprise (ERC) which were previously recorded in the same IC. According to this innovation, after obtaining the IRC, the establishment of entreprise owned by foreign investors will be treated as the same as domestic enterprises at the Business Registration Division. However, the foregoing procedures have practically caused many difficulties for foreign investors, such as the extension of procedures, increase of implementation cost. To resolve these inadequacies, as of June 15th 2017, the Circular No. 02/2017/TT-BKHTT on guiding the connected mechanism in processing of applications for investment registration and enterprise registration submitted by foreign investors has officially came into effect, in which the "Connected mechanism" is highly expected.
(BOD of Vietthink Law Firm is consulting a number of Japanese Investors about investment activities in Vietnam).
The regulation detailing the "Connected mechanism" provides with transparent ground for the connection between the following investment and business registration state agencies during the procedures: Department of Planning and Investment, Management Boards of Industrial Zones, Export Processing Zones, Hi-Tech Parks and Economic Zones as stipulated in Article 28 of Decree No. 118/2015/ND-CP and provincial-level Business Registration Division according to the provisions at Point a, Clause 1, Article 13 of Decree No. 78/2015/ND-CP.
The connected-mechanism as stipulated in Article 4 of this Circular will be applied to the following cases:
• Foreign investor establishes a business organization as specified in Article 22 of Law on Investment.
• Foreign investor contributes capital or purchases shares or stakes as defined in Article 26.1 of Law on Investment.
• Foreign investor adjusts enterprise and investment registration information.
According to current regulations, in order to establish an enterprise, the investors have to submit an application dossier for investment registration before submitting the application for establishment of the enterprise. The above mentioned process takes at least 18 working days to be completed. The application requires many duplicates documents such as personal identification card (ID card, The Decision on establishment or the Enterprise Registration Certificate or papers with the same value...), hence, take times and efforts away from investors .
Differently from the aforementioned, the procedures for investment and enterprise registration are stipulated in Circular No. 02/2017/TT-BKHTT as follows:
• Step 1: The investor submits Application dossier at Receiving Division of Investment Registration Agency.
• Step 2: Such Receiving Division shall connect to Business Registration Division, together, to consider the validity of the application.
• Step 3: The information of issuance of the IRC will be internally sent to the Business Registration Division.
• Step 4: The Business Registration Division issues the ERC and provides with relevant information to the Receiving Division of Investment Registration Agency.
• Step 5: The Receiving Division of Investment Registration Agency hands over the IRC and ERC to the investor.
Such mechanism is expected to facilitate and shorten those procedures of investment and enterprise registration.
Circular No. 02/2017/TT-BKHĐT was effective from June 15th 2017.
LLM., Lawyer Luong Ngoc Quang./.